Highlights of the Case Study:
|Client||A leading manufacturer from the food and beverage industry was facing issues with revenue generation which in turn was impacting its margins.|
|Business Challenge||To reign in overspending on inventory, streamline production with the help of effective sales forecasting.|
|Impact||Enabled to effectively forecast future sales activities which in turn led to efficient demand and capacity planning.|
Game-changing Solutions for Food & Beverage Retailing:
It is a well-accepted and frequently proven fact that food and beverage manufacturers can significantly improve their bottom-lines with the help of analytics. The use of analytic solutions can help derive insights that can lead to informed business decisions leading to an improvement in sales and thus profit margins of a company. The food and beverage industry generates a large volume of data which can be used to help business managers estimate the number of products their consumers would consume in the forthcoming period which will lead to better inventory management and optimized production processes. These are potentially easy wins that can be attained using sales analytics and can lead to phenomenal growth.
The Challenges of the F&B Client :
Sales forecasting is essential for companies operating in the F&B industry. Identifying a scientific methodology to accurately predict future food and beverage sales volumes is a very challenging task yet it is necessary for Food and Beverage manufacturers. It is only when manufacturers have a steady grasp over sales projections that they can put a strategy in place which will set the pace for all the different aspects of their business leading to higher revenue and improved bottom-lines. A clear understanding of future sales will determine important decisions about financing, hiring, product research and development, and production planning.
Our client, a leading manufacturer in the F&B industry was facing certain problems with respect to accurately forecasting food and beverage sales volumes because of the complexity, volatility as well as dynamic nature of the business. The client was facing challenges related to overspending on the inventory, labor, production process, etc. This resulted in poor inventory management and sub-optimal production. This was hampering the revenue growth of the client which in turn led to shrinking margins. To tackle these challenges, our client approached Quantzig to optimize their production planning process as well as to implement effective sales forecasting.
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Sales Analytics Approach- Forecasting Food & Beverage Sales:
The predictive sales analytics solution from Quantzig helped the client with a better understanding of the market. It also helped to identify upcoming risks and design appropriate risk mitigation strategies. Quantzig developed a robust predictive sales forecasting model through aggregation as well as statistical analysis of present and historic sales data. Quantzig experts also made use of the clients’ internal data such as marketing performance, trade promotions, and pricing strategies, as well as their external data such as leads, customers, and competitors to recognize the correct triggers that move customers from one step in the sales process to the next. Quantzig’s demand analytics solutions were then used to help the client estimate the number of products that their consumers would consume over a period, which could then be used for effective inventory and production management.
Sales forecasting steps followed by Quantzig
The sales analytics solutions provided by Quantzig helped this food and beverage manufacturer to improve sales force effectiveness, reduce costs, and mitigate risks to outperform competitors. Our tailor-made solutions cater to the organization’s goals of forecasting food and beverage sales. With the use of artificial intelligence, machine learning, and advanced analytical tools we offered the best, data-backed insights which helped the company to achieve its short and long-term goals.
Impact Analysis of Sales Data Analytics Solution:
With access to macro-variables along with transactional data and weather data, our engagement helped our partner get an accurate forecast for the next 3, 5, as well as 10 years. This helped our partner in:
- Budget planning – Set their budget for the next one year, which they could utilize for their marketing, promotions CAPEX
- Inventory/demand planning – Set targets for the demand planner as per CAGR and YoY
- Market evolution – CAGR predicts how the overall industry is spanning, which helped our partner to evaluate themselves in terms of market share
- Important drivers contributing to their forecast
- Scalable models that can be replicated for multiple geographies
The predictive sales analytics solutions provided by Quantzig enabled the client to forecast their future sales activities by identifying potential customers, and by making demand as well as capacity planning more efficient. Also, Quantzig helped the client analyze their previous data to derive an estimate of upcoming demand that was crucial for appraising their future sales. This process also enabled the client to identify gaps in their existing system, monitor missed opportunities, and formulate efficient ways to optimize their current sales process.
Broad Perspective on Sales Analytics in the F&B Industry:
The food and beverage industry is a highly competitive industry which makes it absolutely essential for key players to continuously explore ways to stay ahead of the competition. However, this is an enormous task as the industry is beset with a variety of challenges in the form of disparate data across various facilities, varied product lines and multiple stakeholders. Understanding the business dynamics and creating a winning strategy is possible by following a systematic approach.
The information captured through sales analytics can be used to optimize plant operations and efficiently cater to the demands of the customers by providing what they need and when they may need it, without missed opportunities and wasteful inventory.
Key Take-Aways of effective forecasting of sales:
- Improved supply chain management
- Improved inventory projections and capacity planning
- Mitigated risk and reduced unnecessary expenditures
- Reduced customer acquisition cost by 10%
- Reduced labor cost owing to efficient staff planning by 15%
- Increased margins
- Identified the key events and causal factors that impact sales
- Improved decision making through structured scenario analysis
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