Kronoscope Makes Demand Sensing And Inventory Planning So Easy! You’ll Never Want To Go Back To Spreadsheets

So you are a demand planner at a leading CPG, retail, or a Q-commerce company, responsible for maintaining adequate stock levels for a mix of SKUs through the supply chain. You are the brains behind the business, ensuring timely procurement and replenishment of products at the shelf/store. You painstakingly consolidate data from multiple teams, often working in silos, to get critical information like sales activity, promotion information, supplier fill rates, and lead times to identify demand patterns as accurately as possible.?

You have created the demand plan you know will generate impressive results when implemented. But Alas! You receive multiple reports of stockouts for some key SKUs from various stores and warehouses. The worst part is that they blame you; for excess inventory and poor on-shelf availability, and management tells you to bring solutions to them and not the problems.

Demand prediction for thousands of SKUs over hundreds of warehouses and stores is a really challenging job, and accurately predicting demand is even more so. Most demand planners like you may be scouring through hundreds of excel sheets, running into thousands of rows, even with missing data, to manually calculate demand predictions and develop replenishment plans.?

Much like Doctor Strange, you are willing to travel the multiverse in search of the book of Vishanti - your magic spell to overcome the madness of accurate demand prediction and replenishment plans.?

Don't worry! We will not show you fourteen million six hundred and five ways to make this happen but only one. Kronoscope!

Kronoscope?is an all-capable, modern AI-powered Demand Sensing and Inventory Planning cloud-based software that can save you from out-of-stock losses and waste, ensuring that you are optimally stocked through all points in your supply chain. Let's look at the four ways Kronsope can be your best friend, as the Cloak of Levitation is to Dr. Strange.

Demand Sensing

Kronoscope allows you to achieve unmatched?demand prediction?accuracy by incorporating the impact of over nine influencing parameters to develop a baseline prediction that is further enhanced by factor-adjusted predictions and Similarity Adjusted Demand Predictions. Let's have a look at the parameters used by Kronsocope:

Baseline Demand Prediction:?

Baseline predictions deal with SKU, Channel, and Store level demand predictions by factoring in the following variables.

• Historical Trends: Kronoscope’s AI engine analyzes historical sales data to identify growth or decline trends in all the SKUs as per different attributes like geography and time.
• Seasonal Effects: Kronoscope’s algorithms also identify, with the help of date attributes, the effect of seasonality on a particular SKU. Kronoscope establishes a relation of sales data with long time frame seasonal influences like winter, spring, summer, and autumn. Thus, factoring in seasonality or future predictions.
• Cyclicity: Kronoscope in a similar approach predicts the cyclicity of a particular SKU, i.e., the effect of a short time frame on the sales of SKUs. These may be the first day of the week effect, the last day of the month, or workdays vs. weekends and training the predictive engine to factor demand patterns in future predictions.
• Outlier Corrections: Kronoscope identifies any anomalies in the Historical data to reduce the error percentage while predicting demand.

Factor Adjusted Demand Prediction:?

The next level to demand sensing in Kronoscope gives demand planners to predict accurate demand depending on changes in product pricing and promotional offers.

• Changes in Pricing: Kronoscope seamlessly factors price changes, wastages, and availability to predict demand accurately.
• Marketing/Promotional Campaigns: Kronoscope can also incorporate liquidation offers, promotional calendar, marketing spends by channels, and website metrics to accurately predict demand
• Holiday/Weather: Kronoscope is a powerful product to predict the demand for products that have irregular demand cycles. It factors in regional data like events, holidays, weather, geography, etc.

Similarity Adjusted Demand Prediction:?

A unique capability of Kronosope is to accurately sense demand for new product launches or even new store launches.

• Product Similarity & Attributes: Demand Sensing for new product launches intelligently associating similar or existing product assortments.
• Store Similarity & Attributes: Demand Sensing for new store launches intelligently associating similar or existing stores and factoring related SKU demands in those stores.

Pricing and Promotions Planning

Marketers constantly pursue higher sales figures, employing various price manipulations, promotional strategies, and events. An essential approach to maintaining relevancy and competitive advantage-?Price changes and promotional events?can become the stuff of nightmares for demand planners like you. Let's look at how Kronoscope simplifies this for best demand predictions.

Price Sensitivity:

Kronoscope can calculate price sensitivity at the most granular levels and forecast future demand based on such changes. A price sensitivity curve is established for each SKU, and geography combination is used to determine the impact of price change.?

Price Optimization:

Based on a company’s wallet share/revenue targets and margin constraints, Kronoscope can calculate and recommend price points to maximize objective function and meet revenue targets. Demand planners can then freeze the calculations and pull the updated demand numbers into the purchase and replenishment planning modules.

Capturing Promotions Data & Understanding Its Impact:

Kronoscope allows demand planners to add individually or upload in bulk events plans, capturing data on impact SKU segment, event type, event treatment, and date range. Thus, simplifying the process of collating various promotional events and data separately.?

Moreover, Kronoscope’s AI engine utilizes advanced algorithms to factor in historical events data and future events calendars to find similar types of events and then predict the demand uplift in the event period. Kronoscope undertakes real-time calculations to provide planners with the best possible demand pattern suggestions. Moreover, it gives demand planners the capability to edit and refine plans and, once frozen, generate inventory plans.

Visual Correlation Between The Impact Of Promotions And Demand

Kronoscope’s bottoms-up approach toward demand sensing helps it quickly adjust to changes in demand. It provides insights on a granular scale, and once the historical event data and future promotions calendar is captured into Kronoscope, demand planners get a promotional uplift chart that showcases a baseline and forecasted demand for a particular SKU for an upcoming event. They also have an option to use their business know-how and judgment to refine the system's suggested recommendations.?

Purchase & Replenishment Planning

Kronoscope, with its sophisticated AI engine, helps demand planners by automatically creating purchase plans, factoring in lead times, fill rates, shelf life, current inventory levels, open orders, and dynamic safety stock levels. Dynamic safety levels are assigned based on demand variability, service levels, plan coverage days, and supplier fill rates.?

Demand planners have three modes of?replenishment planning?in Kronoscope:

Fixed Duration Replenishment Plan:

A fixed duration replenishment plan offers maximum flexibility to users to define the replenishment period and offset. Demand planners can set the replenishment duration and offset to generate order recommendations. Nevertheless, users have to review this before the end of the plan period of the replenishment cycle and develop transfer recommendations for the next order cycle.

Fixed Schedule Replenishment Plan:

A fixed schedule replenishment plan follows a set schedule for replenishment. Kronoscope generates transfer recommendations for specific SKU-branch combinations on a particular date. The replenishment schedule is fed into Kronoscope on the backend and can be defined at the SKU/location/Category level.

Dynamic Replenishment Plan

No user input is required in a dynamic replenishment plan as replenishment norms, including duration, cover, and frequency, are suggested directly by Kronoscope’s AI engine based on the SKU shelf life, current inventory runway, and safety stock required. Allowing the system the complete flexibility to recommend how stock should move between higher to lower nodes in the network to avoid/minimize loss of sales and prevent overstocking.

Usually a complex process, kronoscope simplifies purchase planning, where teams can automate purchase operations in just a few clicks, enabling faster procurements.?Moreover, Kronoscope’s supplier scoring mechanism can help procurement teams to choose the best vendor for a particular SKU in a specific region based on their lead time, fill rate, and prices. Thus, giving extra insights while negotiating with the vendors.

Similar to replenishment planning, demand planners have three modes of?procurement planning:?

Fixed Duration Purchase Plan:?

In this mode, demand planners can define the inventory coverage period manually in this plan. SKU order recommendations are based on the period selected. They can choose the start and end dates of the plan to generate order recommendations. With no set schedule or review calendar, demand planners must keep supplier lead time in mind.

Fixed Schedule Purchase Plan:

The ordering schedule is fed into Kronoscope on the backend and can be defined at SKU/location/Category/Supplier level. This schedule will tell Kronoscope that for location X, every Monday, purchases should be recommended for all SKUs procured from Suppliers A and B. Demand Planners can come to the UI every day and generate plans for the vendors/SKUs that they want to order for that day. All other constraints/criteria are handled by Kronoscope or can be predefined in the system.

Dynamic Purchase Plan:?

Kronoscope can suggest and optimize the location-SKU level norms (days on hand/DOH and schedule) automatically; when demand planners have no constraint on ordering programs and want to rely on the system. Demand planners can generate the dynamic purchase plan for only those SKUs nearing the lower limit of the ideal inventory norm or because demand is expected to shoot up in the near future.

Sales & Operations Planning?

Kronoscope brings unparalleled intuition and automation to your business. You’ll have a near-seamless operation at your fingertips with your expertise when powered by Kronoscope. Kronoscope also allows seamless collaborations for teams that otherwise would generally function in independent silos. You can now get fast & laser-sharp demand and inventory plans for sales, marketing and operations teams to collaborate and be in perfect synchrony.

Let's look at the ways Kronoscope simplifies the entire?sales and operations planning?process:

Optimizing Service Levels

Kronoscope allows you to maintain adequate service levels by classifying the entire SKU group into ABC classifications. Class A products bring in the most revenue, and 95% of service levels are maintained. In Class B, the service level suggested by the system is 80%-90%, and for class C service level is 75%-80%.

Dynamic Safety Levels

Kronoscope, with its dynamic demand sensing and inventory planning capability, allows you to maintain flexibility in safety levels to manage cash flows and working capital. High dynamic safety levels are maintained for high-selling products with high demand variability.

Accurate Inventory Pile-Up Prediction

Kronoscope can help you optimize the working capital and reduce the complexity of managing extensive inventories. It can Identify SKUs ideal for liquidation by proactively monitoring SKUs piling up (getting overstocked) at any level in the supply chain and helps avoid wasted procurement/replenishment time, unnecessary expenses, and opportunity costs.

Accurate Stock-out Prediction

Kronoscope can help businesses optimize their working capital by accurately predicting stock-outs and suggesting appropriate safety threshold levels. Kronoscope prevents out-of-stock losses by proactively identifying SKUs that are at risk of getting stocked out at various levels in the supply chain.

So here you go; now that you know Kronoscope’s stellar new approach to demand sensing and inventory planning, you would never want to open those boring excel sheets ever again!