Bjorn Nedergaard Jensen
Senior Business Analyst, Sales and Marketing
Extra! Extra! Berlingske Media balances production, demand
Berlingske Media, Denmark's largest news publishing group, publishes nearly 15 national, regional, daily and weekly newspapers. While providing balanced news coverage to Danish readers, Berlingske uses SAS® Forecast Server to strike the right balance between the amount of papers it produces and consumer demand -- helping the media giant decrease production costs, reduce stock-outs and surplus, minimize lost sales, and increase its margins.
Automation reduces manual processes and corrections regarding delivery .... Five years ago we made many manual changes, but 80-90 percent of the changes lost us money.
Bjorn Nedergaard Jensen
The need for better forecasting
Limitations of the old forecasting system allowed for tracking sales only – not demand. Berlingske couldn't factor in seasonality and other variables, and discovering trends was a manual process.
The media company needed a flexible forecasting solution that could consolidate aggregated data at the top level – and at the retailer level – to determine its production and delivery numbers.
In-depth analysis, accurate reports
Today, Berlingske runs 15,000 time-series analyses related to its combined products and retailers to forecast demand for the week ahead. Applying three years of sales data, SAS identifies the best model to apply to the data to make discoveries such as seasonality effects.
SAS harnesses SAP data on retailers, publications and sales to better forecast production and delivery. Berlingske can recalculate models each week based on sales numbers to forecast future delivery requirements.
As its usage evolves, Berlingske expects to factor in data from campaigns, such as bundling newspaper sales with other retailer products and TV advertising, to better understand the effect of the campaigns and the variations in sales.
In a short time, Berlingske Media reduced its paper returns with little impact on sales and has realized improved margins. Delivery was reduced by 12 percent in a four-month period, with only a slight decrease in sales. Compared to the same period in the previous year, returns fell by 3 percent, with lost sales unchanged.
The company says the savings in delivery are considerably higher than the value of lost sales. Each percentage point saved in returns reduces costs by DKK 1 million (about US$174,000) per year, assuming lost sales decrease or stay the same. Payback on the solution is estimated at under one year.
Consolidate data to determine demand and sales trends, in an effort to increase its margins.
Reduced delivery volume, maintained sales and achieved higher margins, and saw a payback on the solution within the first year.