Shipment Forecasting

Case Study

Shipment Forecasting Solution to Enable Accurate Trade & Inventory Planning

Business Objective

Our client is a global healthcare company, headquartered in the US. Their Trade S&OP team needed to accurately forecast shipments that would help them in effective inventory management.This was required to be done for their diabetes care unit, specifically for high-selling glucose monitoring devices and test strips.

Challenges

  • Identifying and treating outliers in historical shipments (purchase deals among wholesalers/retailers)
  • Accounting for retailer-level differences in shipment frequencies in arriving at an overall plan
  • Aligning model based forecasting results with quarterly financial targets for tie-outs

Solution Methodology

We built a trade forecasting tool that helps the planning manager accurately forecast at a product SKU, wholesaler/retailer customer level, rolled up to net shipment units and dollars among other inventory management related metrics.

Key Analytics Delivered

  • Detailed month-on-month shipment forecasts by each customer, at a product SKU level
  • A ‘Forecast Manager’ view – that empowers and enables planning managers to:
    • Align model forecasts with quarterly financial planning
    • Simulate what-if scenarios – create, save and publish multiple forecasting scenarios, based on different days-on-hand and inventory target criteria
  • Seamless monthly system refresh with updated forecast numbers based on latest actual numbers
  • Customized BI/visualization reports which can be published to multiple users, sent as email notifications, etc.

Business Impact

  • The shipments forecasting tool delivered an integrated forecasting solution with a monthly forecast error rate within +/-5% for power SKUs across customers, for the past year.
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