Machine learning improves sales forecast by 30% for orthopaedics supplier
Profile
PE-backed orthopaedics and healthcare product supplier serving hospitals in a range of international markets.
Situation
A PE-backed prosthetics company wanted more accurate forecasts to improve the performance of their supply chain. They business wanted to leverage historic performance trends to improve forecasting accuracy of future sales on automated basis.
Action
Our approach to generating the forecasts was founded on developing a deep understanding of sales patterns historically through exploratory analysis of the business’s data. We were able to establish strong underlying seasonal patterns that were unique to each market and product that the business had not previously been aware of. Utilising these insights, we then progressed to utilise a seasonality-based forecasting approach. A machine learning algorithm was utilised to decompose historic sales into seasonal patterns, growth trends, and a ‘randomness’ value. These could then be extrapolated to predict the likely future sales up to 18 months in advance. We also deployed a simulation methodology to generate confidence intervals for the forecasts.
Once the model was developed, we consolidated the logic into a user-friendly, robust, and lightweight tool that could easily be handed over the client for on-going use.
Tools and techniques used in this work
Python
Machine Learning Forecast Algorithms
Impact
The model displayed significantly improved performance compared to the business’s existing forecasts, reducing the absolute error by 31% and providing a much longer-term forecasting view with minimal effort required to generate.
So what?
Our focus on understanding the business dynamics as a priority allowed us to unearth new insights that could be utilised to drive value for the business. Improved forecast accuracy ensured that stock levels were optimised with minimal wastage, and that team members did not have to dedicate high levels of resource to forecast generation.
To discuss how we deploy Advanced Analytics to support Value Creation, contact us.
Get in touch
Are you looking for a team with deep expertise in building advanced analytics and modelling to support value creation and process optimisation? We can support you.
Related areas of QuantSpark expertise
Similar Case Studies
