By – KRD Pravin

© 2014 KRD Pravin

Introduction to Analytics

Source of case studies - https://www.informs.org/Sites/Getting-Started-With-Analytics/Analytics-Success-Stories

© KRD Pravin 2014

+Usage of analytics

+Example

CONTENTS

+What is?

+Why analytics

What and Why

How example & impact

2 3 1 Intro

© KRD Pravin 2014

What is Analytics

A scientific process

Utilizes Mathematics & Statistics

Transforms data into insight

Discovers meaningful patterns

Two types – reporting & Analysis

Predicting - What happenED? What WILL happen

© KRD Pravin 2014

Analytics – “Evolution”

B

u

s

i

n

e

s

s

V

a

l

u

e

HIGH

LOW

A

B

C

D

D – Prediction – What will happen? Modeling, Data mining, Statistics

1980 1990 2000 2010

What are reporting and what are analytics phases of these evolution?

A – Reporting – What happened? Static & interactive reports

B - Analysis – Why did it happen? OLAP, SQL

C – Monitoring – What is happening? Dashboards / Scorecards

Decade

© KRD Pravin 2014

Companies utilizing analytics outperform peers

Lower cost

Higher Revenue

“I (company) will make an offer you (customer) cant resist”

Optimization

Impulse purchase

Brand perception, Revenue increase and improved User Experience

Fact Based Decision making

Why Analytics

© KRD Pravin 2014

+Usage of analytics

+Example

CONTENTS

+What is?

+Why analytics

What and Why

How example & impact

2 3 1 Intro

© KRD Pravin 2014

How, example & impact (in Retail)

Business Decisions

• Strategy planning

• Operations, Marketing, HR & others

• Localization and Clustering

• Real Estate Optimization

Marketing & Customer analytics

• Customer-Driven Marketing

• Marketing Mix Modeling

• Pricing Optimization

• Product Recommendation

• Test and Learn

Inventory and Operations

• Supply Chain Analytics

• Forecasting

• Workforce Analytics

In-store

• Assortment Optimization

• Shelf Space Allocation

• Fraud Detection and Prevention

© KRD Pravin 2014

Opportunity

• world's largest healthcare services company – McKesson

• revenues over $120 billion

• Its supply chain, serves all pharmaceutical manufacturers and 25,000+ clients

• Opportunity in Operations and Supply chain

Proposition

• Scenario Modeler analytical engines

• distribution network

• inventory policies

• supply flows

• vehicle routes

• sustainability, financial & operational metrics

• creation of new supply chain

• updating pricing models

• service improvements

• profit opportunities

Impact

• Application • 60,000 active items

• 30 distribution centers

• shipping 2M pieces/day

• 25,000 customer locations

Example – Supply Chain

© KRD Pravin 2014 Source of case studies - https://www.informs.org/

Opportunity

• Dell from Direct Sales to Channels

• Different channel different customer needs

• Developing the right product offerings

• Challenge • determine the best

possible configurations

Proposition

• Demand cluster analysis • identify naturally

occurring patterns

• Maximize the conversion rate

• competitive benchmarking

Impact

• Retail Margin Maximizer • Demand sensing

• Promotion uplift model

• Inventory risk management

• Margin improvement Promos

• Pricing Intelligence

• Network Optimization

• Marketing Investment Optimization

• Support affinity analysis

Example – Business Strategy & inventory Management

© KRD Pravin 2014 Source of case studies - https://www.informs.org/

Example – Strategy & Decision Making Opportunity

• Kroger

• 2,422 supermarkets

• 339,000 associates

• 1,950 in-store pharmacies

• Objective • reduce the overall cost

• Pain point • pharmacy inventory

management

• predict pharmacy demand

• reduce out-of-stock

Proposition

• Model empirical distributions, visualize inventory results • development of

inventory simulation & optimization model

• built fast optimization algorithms

• visualization of the modeling

Impact

• reduced out-of-stock 1.5M

• additional revenue of $80M

• inventory costs reduction $120+M

• labor cost reduction ~$10M

• YEARLY

© KRD Pravin 2014 Source of case studies - https://www.informs.org/

Open forum - Discussion

Discussion what we can do

Question & answers

Action points Please volunteer for taking notes?

© KRD Pravin 2014

THANK YOU!

KRD Pravin Twitter - @krdpravin

© KRD Pravin 2014