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
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n
e
s
s
V
a
l
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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