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Case Studies

Demand Forecasting


One of the world's largest food and beverage companies had reached an accuracy plateau using their market leading Advanced Planning System technology. They were interested in more sophisticated statistical analysis, and based on prior successes in other companies owned by this parent, enlisted Prognos to combine CPG industry knowledge with advanced statistical techniques to produce a superior statistical forecast. The Prognos solution provided a number of functional improvements to that forecast.

The two most significant improvements were dynamic aggregation and incorporation of planner insight. Prognos had developed a solution where planner insight could easily be recorded and incorporated into the statistical forecast. This streamlined the communication process between the planners and statistical analysts. These insights as well as other demand drivers were then incorporated into the statistical forecast. The historical data was aggregated at multiple levels for forecast generation and then disaggregated down to the data level desired for downstream planning systems. The aggregations and statistical techniques were defined in such a way as to maximize the final forecast accuracy metric. Prognos also developed ‘Forecast Diagnostics’ to constantly monitor ongoing performance of the models within the forecasting solution. The solution was implemented in multiple business units throughout the organization, and in each case reduced forecast error by at least 15%.

Optimizing Offers to Loyalty Customers


A leading grocer wanted to introduce their most optimal offers to its loyalty card customers through statement inserts. The challenge was to find unique coupon combinations for each customer where vendor deals were maximized without cannibalizing private label sales. They also wanted to keep the promotions relevant to the customer’s buying preferences. Our solution to this problem included grouping customers by vendor criteria, building relevancy scores of each customer against each offer, and then allocating the most relevant coupon combinations using mathematical optimization. The Prognos solution produced substantial improvements in response and coupon redemption rates. Since the introduction of this capability the grocer has extended it’s use for other direct marketing campaigns as well.

Analytical Improvement for Pricing Optimization


A leading footwear and apparel brand manufacturer with exclusive outlet stores turned to Prognos to help them with their markdown pricing initiative. Prognos worked with the retailer to overhaul their analytical infrastructure. The models were reconfigured to suit the merchandise type, lifecycle and seasonality. Prognos also developed an ‘analytical cockpit’ to constantly monitor health of the models within the pricing solution. The client has produced a significant improvement in sell-through of its clearance merchandise and department margin enhancement through increased sales of regular priced merchandise. Prognos now works with the client on an annuity model to maintain its analytical infrastructure.

Customer Insight Driven Merchandise Planning Enablement


Prognos worked with one of the largest small format retailers to optimally allocate space across categories. Prognos aided in the assortment planning process by grouping stores at the category level and then profiling the groups to provide customer insight. The Prognos Merchandise Planning Enablement solution led to astounding financial results from increased comp store sales, increased inventory turns and reduced out-of-stocks.