DemandView™ Information ServicesDemandView™ Forcasting | Balance-on-Hand Inventory
DemandView™ Information Services (DVIS) provides the next generation information to run businesses more effectively, especially in the area of store level execution. DVIS illuminates the "last mile" of the supply chain - from the Distribution Center to the store shelf - that has heretofore been invisible to both the manufacturer and the retailer.
This invisible "Last Mile" exists despite billions of dollars being spent on enterprise software solutions in both the upstream supply chain and at point of sale. For example, a cereal manufacturer knows how much wheat has been purchased, knows how much was processed, knows how many cases of product was produced, knows how much was shipped from their warehouse and knows how much finished goods are ready to be shipped. A retailer knows what is in their Distribution Center and knows how many SKU's moved through the cash register. Neither party knows what the balance on hand is at the store and how much product needs to be shipped today to meet tomorrow's demand.
DVIS models and maintains a demand forecast based on how a particular item behaves in a particular store. These models are updated daily using that day's data. The algoritms also model Balance-on-Hand (BOH) inventory and include warehouse withdrawls from the DC so that replenishment systems can work as they were intended - to do a better job of maintaining customer service while optimizing store level inventory.
Market6 employs several innovative, breakthrough technologies in deployment of DemandView™ information services and applications. These technological achievements enable Market6 to deliver the most accurate operational forecasts in Fast Moving Consumer Goods with unprecedented speed. The result is that DemandView™ becomes a platform for "last mile" solutions that solve some of the most vexing problems in Fast Moving Consumer Goods, such as Out-of-Stocks and Shrink.
DemandView™ Forecasting has three characteristics that set it apart and above all other forecasting technologies:
1. Automated Algorithm assignment and calibration
DemandView automatically evaluates input data to assign the best fit forecasting algorithm. Further, each algorithm coefficients are automatically determined and calibrated. This means that every item in every store has a unique algorithm that best fits that item's movement in each store For example, 50,000 warehouse items in 1,000 stores will have 50 million unique algorithms.
2. Calculation of a True Baseline™ and Turn Forecast™
DemandView™ estimates demand in three separate components: True Baseline™, Turn Forecast™ and incremental volume from promotion. For the first time ever on a large scale forecast, incremental volume from non-promoted activity such as weather and sporting events is identified and reported as Turn Forecast™. With both incremental volume from in-store and out-of-store activity identified, a True Baseline™ forecast is calculated.
3. Daily updates
The key to DemandView™ inventory accuracy is daily updates using that day's data. Every day, every algorithm in the DemandView™ database is updated and recalculated using the freshest demand signals for the next 31 days. This breakthrough technology enables tremendous processing capacity. For example, in a hypothetical 1,000 store chain with 50,000 items, four forecasts (True Baseline™, Turn Forecast™, incremental volume from promotion and total volume) are updated each night with that day's data for each of the next 31 days, requiring 6.2 billion individual forecast calculations. At a rate of 2.6 million forecasts per second, these calculations are completed in 40 minutes.
Maintaining accurate Balance-on-Hand information at the store level has proven to be nearly impossible, until the advent of Market6's inventory anomaly detection calculations. Market6 calculates the probability that the Balance-on-Hand estimate is incorrect. With this calculation, Market6 can then direct store personnel about which items need to be audited or counted in a particular store on that day. Using this technology and methodology, Market6 has proven at scale to be able to accurately estimate and manage Balance-on-Hand inventory in the store.