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What it is
Demand planning optimizer is an end-to-end approach to develop the analytical engine, redesign the demand planning process and support implementation. It improves demand forecast accuracy and bias through advanced analytical methods and optimizes product segmentation for demand planning.
Granular forecast on customer and SKU level to enable supply chain and inventory optimization
Analytics-driven demand forecast with high accuracy that utilizes relevant influencing factors
Upfront planning of activities and fed into model to assess excepted activity impact and shape prediction
Full transparency on gaps to financial targets and analytical validation of gap closure activities to eliminate bias
Integrated demand planning tools
Single way of working enabled by standardized tools
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Forecasting is core to supply chain planning and impacts service, cost and inventories along all downstream processes; Demand planning optimizer enables significant impact in terms of forecast error by machine learning approach
How it works
Prepare
Ensure pre-requisites in place to fully launch project
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Modeling
Develop high quality data model with relevant features
Diagnose current state demand planning processes
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Design solution
Build model that achieves desired forecast accuracy improvements
Safeguard adoption of model through process design and change management
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Implement
Industrialize model and roll-out processes to be adopted across business
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Typical approach for redesigning end-to-end demand planning process by leveraging machine learning
Create end-to-end work plan
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Collect internal and external factors for developing machine learning model
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Improve the model accuracy by testing various input data
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Verify the accuracy improvements in planning and forecasting
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Redefine planning process by embedding machine learning models
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What the output looks like
Process design: Monthly process with machine learning has greater focus on upfront capture of inputs
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McKinsey proprietary demand planning/visualization tool (MVP)
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Demand planning tool was designed to enable an efficient and collaborative planning process
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Here are some client examples
A leading CPG player transforms its E2E demand planning process and improve forecast accuracy by 13ppt
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Global beverages player uses automated feature discovery and forecasting engineer to improve performance across full value chain
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A Europe-based perishable Fast Moving Consumer Goods client achieved a MAPE improvement of over 37%
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A South-East Asian heavy vehicles manufacturer achieved a forecast accuracy of 83%
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By working with us, you will have access to
Experts
Our industry and functional experts will be on the ground where and when you need them.
Helpdesk
Our helpdesk will keep doors open and commit to addressing your concerns efficiently and effectively.
Training
We offer coaching and build capabilities for your teams to deliver sustained improvements.
Implementation
We partner with you and co-create a firm path to implementation as part of the project.