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ProCogia’s custom demand-planning engine for US specialty retailer results in estimated annual savings of $30m to $50m.

A leading US specialty retailer engaged ProCogia to correct stock-out and over-stock problems caused by the inadequacies of its existing forecasting and replenishment systems. ProCogia implemented a customized forecasting engine and an ordering tool with a 3-tier architecture.

Results included an Improved forecast accuracy for 20-25% of SKUs, and an estimated annual savings between $30m to $50m.

THE CHALLENGE:

One of the leading specialty retailers in the US was facing inventory stock-out and over-stocking problems because of exponential business growth and highly variable demand.

  • The existing forecasting and replenishment systems were primitive and not able to capture the supply and demand-side variability.
  • The company engaged ProCogia to implement a forecasting engine and ordering tool that would optimize the inventory levels while maintaining desired service levels.

PROCOGIA’S APPROACH:

ProCogia collaborated with the company’s leadership to implement:

  • A cross-functional team with accountability for marketing, product, supply, market intelligence, sales, and finance
  • A standardized statistical demand-forecast process across categories
  • Timely incorporation of trade inputs from external sources
  • A revamped Dates and Gates process for new team initiatives

THE RESULTS:

ProCogia’s customized forecasting and ordering solutions:

  • Improved forecast accuracy for 20-25% of SKUs
  • Yielded estimated savings $230,776 for 170 POC SKU’s
  • Yielded estimated annualized savings (considering all SKUs) in the range of $30m to $50m
  • Forecast under (45)/over (55) delivery % is shown below.
  • Non-‐productive inventory reduced in more than 50% of SKUs
  • Lost sales savings = $103,800
  • Over stock savings = $126,976
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Data Sciences

 
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OPTIMIZE: THE PROCOGIA IDOP FRAMEWORK IN ACTION

This project exemplifies the Optimize component of the ProCogia IDOP framework. a holistic methodology that applies business, technical and mathematical expertise to your company’s various data elements. Learn more