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Patrick Smith
General Manager, North America
ToolsGroup
Psmith@toolsgroup.com
617-600-7255
www.Toolsgroup.com
2015
M AT E R I A L H A N D L I N G
&
L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
Abstract
Supply Chain is the highway and demand forecasting controls the
traffic. However, many supply chains find their speed and flow
impeded by unseen weakness in forecasts. Demand modeling and
machine learning identify these weaknesses and removes them as
obstacles to supply chain growth. At the heart of demand modeling
and machine learning is an algorithm that "learns" from data
building ever more accurate predictors of demand to drive supply
chain planning. This game-changing topic may be the secret to
reduce costs and chaos.
2015
M AT E R I A L H A N D L I N G
&
L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
Agenda
Supply Chain Trends
How Forecasting has Evolved
Forecastings Role in the Supply Chain Process
Approaches to Modeling Demand
What is Machine Learning?
Machine Learning Case Studies:
- Danone
- Lennox
- Wayfair
Key Takeaways
Conference Cloud
Questions
|
2015
M AT E R I A L H A N D L I N G
&
L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
ToolsGroup
2015
M AT E R I A L H A N D L I N G
&
L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
2015
M AT E R I A L H A N D L I N G
&
L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
of Niches
Key
Trends: Exploding Omni-Channel
Driving Supply Chain Complexity
2015
M AT E R I A L H A N D L I N G
&
L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
of Niches
Key
Trends: Requirement for Higher
Customer Service Levels
2015
M AT E R I A L H A N D L I N G
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L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
of Niches
Key
Trends: Evolving Business Models
2015
M AT E R I A L H A N D L I N G
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L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
Sales Volumes
Shrinking
Growing
Closer to customer
Promotional Activity
Product Variety
Sku Count
2015
M AT E R I A L H A N D L I N G
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L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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2015
M AT E R I A L H A N D L I N G
&
L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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2015
M AT E R I A L H A N D L I N G
&
L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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Your Network
Market Channels
2015
M AT E R I A L H A N D L I N G
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L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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Risk to
Service
2015
M AT E R I A L H A N D L I N G
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L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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Demand Modeling:
Slower Moving Item Long Tail Demand
2015
M AT E R I A L H A N D L I N G
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L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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Forecast is
relatively low
2015
But demand
is 2X the
forecast
M AT E R I A L H A N D L I N G
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L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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2015
M AT E R I A L H A N D L I N G
Red Line =
Past and future
forecast
&
Orange Bars =
Future probability of
orders/POS demand
occurring (day and
quantity)
L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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2015
M AT E R I A L H A N D L I N G
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L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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Automatic
Model
Construction
Creating boolean,
human intelligible
rules
2015
M AT E R I A L H A N D L I N G
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L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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Promotions
Media
Promo
Variables
Media
Variables
Web
Web
Indicator
Consumer
s
Attributes
NPI
Variables
Market Model
New Products
Statistical
Promotional
Lift
Halo Effect
Segment
Specific Lift
NPI Launch
Profiles
Seasonality
Web Lift
Base-Line
Processing
Demand
Modeling
Uplift
Projection
Historical Demand
Market, Product,
and Demand
Datasets
2015
M AT E R I A L H A N D L I N G
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L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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2015
M AT E R I A L H A N D L I N G
&
L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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2015
M AT E R I A L H A N D L I N G
&
L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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350%
100%
80%
250%
60%
150%
40%
50%
20%
-50%
2012
Program Growth
2013
Stock Out
2012 - BEFORE
Inventory Turns
10
0%
5%
4%
3%
2%
1%
2013 - AFTER
Unhealthy Inventory
0%
2012 - BEFORE
2013 - AFTER
2012 - BEFORE
2013 - AFTER
2015
M AT E R I A L H A N D L I N G
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L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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Your Network
Market Channels
2015
M AT E R I A L H A N D L I N G
&
L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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Key Takeaways
The long tail of demand is a real issue that requires a different
demandit just doesnt work. Model demand dont just forecast it.
Cognitive learning is the future.there is signal in big data that
2015
M AT E R I A L H A N D L I N G
&
L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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Conference Cloud
Additional Resources
Title
Type
Link
Article
bit.ly/15gI6iT
ToolsGroup Blog
bit.ly/1z3tRGd
ToolsGroup Blog
bit.ly/1CPjIRR
ToolsGroup Blog
bit.ly/1B5dQU5
Case Study
bit.ly/1AAeabT
Infographic
bit.ly/1MaORDu
2015
M AT E R I A L H A N D L I N G
&
L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
bit.ly/1wjHbp4
MHLC. COM
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Questions
27
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2015
M AT E R I A L H A N D L I N G
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L O G I S T I C S C O N F E R E N C E S P O N S O R E D B Y D E M AT I C
MHLC. COM
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