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.
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 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
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
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