This large agriculture distributor with 350 branches experienced inventory issues due to inaccurate forecasting, which resulted in high costs and an aging inventory.
o9 Digital Brain for Agribusiness
One of the largest family- owned companies in the world, providing farmers the essentials for the world to thrive. The company markets and distributes products to the agricultural industry, including crop seed, animal feed, specialty chemicals and ingredients.
Reduction of product waste and reduction of inventory.
Business Scope Challenges
For each season, the company needed to place a product order (eg. seeds for crops) one year in advance, which was forecasted poorly, due to reliance on lagging indicators to predict demand. This resulted in a large write-off of seasonal inventory.
With o9, the company was able to implement automated forecasting on products with high and low variability using ML and statistical modeling. The forecast for high variability products used active forecasting to ensure quicker responses to market changes.
The company was unable to control total inventory costs due to poor planning and sub-par scenario modeling.
With o9, the company was able to perform capacity optimization planning for warehousing and logistics to help minimize their total inventory costs and improve scenario modeling accuracy. This includes automated replenishment and procurement forecasting, which feeds back into the ERP system to assist with auto PO creation.
The company lacked planning knowledge. Key decision-making processes were disconnected due to multiple sources of data, disconnected analyses and an immature planning system.
With o9, the company was able to mature its planning capabilities and expertise. o9 supported through training, as well as a single integrated platform to connect functions and running processes.
Key Functionalities Implemented
The company used the o9 Enterprise Knowledge Graph to build market, demand, and supply-knowledge models. This allowed them to run all key planning processes for all product lines and countries, across all time horizons in a single integrated platform. Moreover, o9 provided education for the planning teams to build up planning competence.
Homegrown solutions and Excel.
Success Factors — 3 reasons why o9 was selected
- o9’s highly differentiated Enterprise Knowledge Graph, bringing all key functions together on one platform, enabling incorporation of leading indicators of demand to develop more accurate forecasts.
- o9’s expertise and thought leadership across the agriculture industry.
- The ability to use a flexible and extensible tool with an intuitive user interface, allowing for high user adoption.
- Inventory optimization with about 50% reduction in write-downs.
- Improved response time to suppliers.
- Significant improvement in operational efficiency for demand planning.