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$14B CPG company uses to tackle demand and supply volatility

XAI / AI for Supply Chains
XAI / Challenge

Forecasts Failing When They Are Needed Most

Facing increased volatility in their supply chain, our customer wanted better demand and supply predictions—primarily to help them improve service levels in the North American market.

Ch. 01

Also, our customer’s bias towards carrying too much inventory was impacting margins by driving up inventory holding costs, working capital and product obsolescence costs. recommended that I reduce production for my product. I acted two weeks earlier than I would have with our traditional planning tool, which allowed me to eliminate planned production, and saved us $760K, all due to that single recommendation.
Integrated Planning Supply Planner
Quick action was paramount: the demand volatility at the onset of the pandemic had rendered their existing demand forecasting system so inaccurate that they had essentially turned it off.
XAI / Solution

Turn the Forecasts Back On

To improve fill rate, reduce inventory holding costs, and reduce obsolescence for our customer, deployed three modules of the Inventory Flow Application from the Athena Supply Chain AI Suite.

Ch. 02

Inventory Flow - Sentinel

In May 2020, Inventory Flow went live to 45 planners covering approximately 2,000 high-profile SKUs in the North American market. Designed to help companies quickly get started with supply chain AI, Inventory Sentinel leverages AI to sense emerging supply-demand imbalances in your network, recommending changes to the production schedule to better match inventory with demand.

Inventory Flow - Sentinel, Precog, Pathfinder

In July 2020, we deployed the remaining Inventory Flow XAI modules. Inventory Precog leverages sophisticated AI inference engines that have been trained on thousands of supply chain variables to predict SKU/DC-level risks such as lost sales and inventory overages. Inventory Pathfinder recommends shipment-level allocation and deployment actions. The XAI modules all sit on the same AI-ready infrastructure, with each incremental module providing more robust, value-add functionality.

XAI / Results

Value at Risk

Each of's risk predictions is tied to a dollar value, what we call our Value at Risk (VAR) metric. Not only does VAR enable planners to prioritize their work, it also provides managers and executives with a clearer picture of the total financial risk facing a brand, region, or business unit.

Inventory Flow provides planners with precise, action-ready recommendations to most efficiently mitigate the risks, such as how much (and when) to increase/decrease production, how much inventory to deploy across their DCs, and when (or when not to) expedite shipments.

Ch. 03
In under 2 months, we improved fill rates by 3% for targeted North American SKUs.
In the first 4 months, we reduced COGS by $16M through recommended non-production of inventory for targeted North American SKUs.

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