Improve the accuracy of Fishin’ Co’s internal sales predictions
The Fishin’ Company’s advanced forecasting methods have been integral to catapulting its growth into an industry leader. For years, its internal demand planning team has averaged monthly SKU-level accuracy levels (~74%) that consistently best industry averages.
As demand for Fishin’ Co.’s products continue to skyrocket, so too have costs and liabilities across their supply chain—especially related to inventory. To reduce costs and stay ahead of the competition, Fishin’ Co. approached Unioncrate and asked them to provide consumption-driven demand forecasts that significantly improve upon its own internal predictions, and help significantly reduce inventory management costs.
Artificial intelligence that transforms data into supply chain efficiencies
Unioncrate’s consumption-driven models are designed with a deep understanding of the complexities and ever-evolving dynamics of the CPG industry, and our benchmarks/insights give weight to top-selling SKUs. Our Demand Planning AI analyzes Fishin’ Co’s internal sales data—as well as all relevant external variables that impact demand, including POS data—and finds dynamic, multi-layered relationships between these datasets.
We transform these insights into action by providing strategic recommendations, such as where Fishin’ Co. can immediately realize supply chain efficiencies, avoid risks, seize sales opportunities, cut costs across the business, among other KPIs.
Unioncrate’s Demand Planning AI achieves 82% monthly forecast accuracy
In 2019 alone, our Demand Planning AI averaged 82% (WMAPE) forecast accuracy at the SKU level (with 5.83% standard deviation), achieving a peak accuracy of 91.6% (Aug. ‘19).
During the same period, our Demand Planning AI averaged 94.93% forecast accuracy at the total company level.
In 2020, Unioncrate’s forecast accuracy was an improvement of nearly 8% versus Fishin’ Co.‘s internal prediction accuracy
Year-to-date, our Demand Planning AI improved on Fishin’ Co.’s internal forecast accuracy by a monthly average of 7.64%. (Note: This graphical analysis shows a 6-month period because Fishin’ Co. supplied 6 months of predictions for the comparison.)
Unioncrate significantly reduces Fishin’ Co’s yearly inventory carrying costs
The cross-functional benefits of accurate SKU-level forecasts include working capital improvements, such as optimizing safety stock positions, improving service levels, and reducing transfer costs.
Based on a summation of industry benchmarks, inventory investments are typically tied up in a variety of carrying costs, including: inventory service fees, capital costs, handling costs (clerical and cycle counting), warehousing and storage, general risks, and other tax write-offs.
Even though Fishin’ Co.’s inventory carrying costs were already optimized at 16% of total inventory costs, Unioncrate was able to generate savings by improving the forecast accuracy by about 8%.
This improvement in forecast accuracy directly translates into a reduction of inventory levels equal to 1.3% of total inventory costs. If assuming inventory worth $10M, that's a scalable yearly savings of more than $1M!
Fishin’ Co. absorbs Unioncrate into its internal S&OP process
Our team has become a reliable part of Fishin’ Co.’s S&OP process. Our forecasts have become the basis of our client’s internal demand planning meetings, including during the first peak of Covid-19, when the stakes were at their highest.