Predictive Analytics

Prof. Dinesh Kumar

Analytics in Manufacturing
DK_PA_W01_C08

Dinesh: Let us also hear from an expert from manufacturing sector, how it is used in manufacturing.

Ashok: So, I would like to quote one of the example that when I was in sales and marketing. When I
moved from manufacturing and did a project in the sales and marketing. One of the problem that
the retail industry is currently facing is, the consumer pattern of the consumption, right? You always
see in retail industry, what happens is, the sales is not linear? When I mean the sales is not linear,
what it is, right. In a given four week or a five week period, the sales is not 20%, 20%, or 25% into
four, right? So, in my organization, what was happening is the sales was always queued to the week
four, yeah? When I say the primary sales, it was the sales, I mean the products that we were
shipping it to the channel partners. The value stream was the product was moved from the
manufacturing to warehouse, and then warehouse to the end customer. So, we were always pushing
these sales in the fourth week, third and the fourth week which was contributing about 75% of the
sales. Now, the channel partners used to always come back to us and say that there is tremendous
pressure on the cash flow, and I mean it is a huge burden to take so much of sales in the week four
and week three. And, we were not able to understand the problem at that point in time. The reason
being we were not seeing how the sales pattern was moving from the channel partner to the end
customer. So, to solve this problem, what we did is, we wanted to understand the consumer
behavior from the end customers. So, what we did is, we implemented a system called DMS, which
is called Distributor Management System. So, what we started doing is, we started tracking the sales
pattern that was moving from the channel partner to the retail outlets and from the retail outlets to
the end consumer. So, the sales that we call from channel partner to the retail outlets is secondary
sales and from retail outlet to the end consumer is the tertiary. So, the moment we started
understanding the pattern of the secondary sales and the tertiary sales which were not as queued as
the primary sales we were able to tell, "Okay, the secondary sales and the tertiary sales is not
queued. So, why my primary sales is queued." So, once we understood that pattern, we were able to
crack this problem and ensure that the sales that is going from the organization to the channel
partner were even. How did this benefit us? The channel partner were able to rotate their money
and the cash flow better, and they were able to buy more products from us. In turn, we were able to
make more revenue for the organization. So, this is where the data helped, the usage of data, and
collection of data helped us to solve one of the chronic retail industry problem. Thank you.

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