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CUSTOMER STORIES

High tech manufacturer forecasts demand for specialized products

A Tier II supplier for some of the world’s largest manufacturers mastered supply and demand with predictive demand forecasting.

THE RESULTS

15%

labor cost
savings

25%

inventory cost 
savings

20%

reduction in machine

change over time

The challenge

Legacy forecasting led to demand and supply mismatch

The customer used non-scientific forecasting methods for their manufacturing and inventory planning projections. Forecast inaccuracy made it very difficult to determine the proper quantities of subcomponents they needed to manufacture across many of their products. The demand/supply mismatch led to the understock of certain subcomponents which elongated the manufacturing lead time while overstock of some subcomponents resulted in high inventory levels, and wasted labor costs.

The SOLUTION

14 days to a fully-trained, highly accurate demand forecast model

Using the Pecan platform, the client was able to automatically connect to and unify data from their CRM, various marketing data sources, raw data from their ERP system, and external data enrichment. 

Pecan transformed this raw data into a fully trained and highly accurate demand forecast model in less than 14 days. They were also able to forecast demand along multiple time horizons from 6-12 months.

Each prediction had an individualized confidence level to allow for tailored treatment. The client saw accuracy of 75-85%, with higher accuracy for their top-selling products. 

The SUCCESS

15% labor cost savings and 25% inventory cost savings

The demand forecast model was able to provide the customer with a 3 and 6 month, highly accurate forecast of the quantities required to manufacture.

By knowing the right sales and order quantities, they were able to optimize batch sizes, reduce the effective supply lead time, and increase sales due to better product availability—all while reducing labor-related expenses.

This resulted in a labor cost savings of 15% and an inventory cost savings of over 25%.

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