Client is a FMCG D2C brand which sells low shelf life (perishable) products to customers via retailers. They want to predict weekly demand of their products at the most granular level (Store-SKU Level). Additionally, they’ve faced challenges due to their 7-day replacement policy, leading to high replacement rates and significant losses. Their objective is to not only optimise their replacement rates but also enhance their inventory planning by utilising accurate demand predictions.
TrueGradient’s Demand Forecasting module to predict demand was pivotal in achieving high accuracy. By incorporating holiday data, they tackled demand seasonality effectively.
For optimising replacement rates and understanding SKU sales elasticity, the Inventory Optimisation module was utilised.
TrueGradient’s inherent clusters, formed from sales and time series data, facilitated demand planning for retailers with sporadic sales and minimised forecast bias for high-value retailers. This clustering approach provided a foundation for strategic retailer segmentation, enabling the creation of tailored strategies for each segment.
The successful implementation of TrueGradient’s demand forecasting marked a significant milestone for the client’s business, streamlining their operations with data-driven insights. The resulting Inventory Optimisation strategies showcased a commendable 10% reduction in replacement rate, reflecting the immediate impact of their revamped approach. By utilising TrueGradient’s cluster creation as a valuable tactical tool, the client not only refined retailer ranking but also fine-tuned their strategies, aligning replacement rate thresholds with the specific needs of each retailer group. This multi-layered approach not only improved their bottom line but also fostered a more tailored and effective operational framework.