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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%.