Plantensive partners with a national distributor to implement and customize the Amazon Forecast predictive analytics tool, improving their supply chain responsiveness and demand forecasting models.
Client
A national distributor of long lead time products
Services
Consulting
Area of Expertise
Supply chain management
Industry
Retail distribution
Challenge
A national distributor of long lead time products struggled to line up production timelines with the fluctuating demands of the market. The new advanced planning system implemented at the onset of the COVID-19 pandemic proved unreliable for a volatile market due to its reliance on past data and inability to account for increased external factors. A growing portfolio of competitors led to an overabundance of supply for the shifting marketplace, leading to significant revenue loss and outdated product lines.
Solution
Our use of artificial intelligence (AI) and machine learning in demand forecasting and inventory management proved to be the ideal solution for the distributor, improving their strategic supply chain journey mapping. Working with a data scientist and a support team, we supplemented the planning engine and implemented, then customized, the Amazon Forecast predictive analytics tool. This allowed the organization to proactively account for and directly incorporate economic and seasonal market factors, competitor offerings, and social trends. With a focus on internal data cleanliness and appropriate data aggregation for optimal statistical models, we used predictive analytics to propel long-term forecasting. As a result, the company could adjust inventory levels proactively, reducing revenue loss, and meeting customer demand.
Impact
After the implementation and customization of Amazon Forecast leveraging predictive analytics, the organization experienced a 20% improvement in forecasting accuracy across all markets. Doing so lined up its business strategies with external market factors. Improved forecasts led to optimized product development timelines, revenue growth in underperforming and untapped markets, and significant reductions in wasted inventory.
The predictive analytics market was valued at $14.71 billion in 2023, with projections increasing from $18.02 billion in 2024 to $95.3 billion in 2032. (Source: Fortune Business Insights)
