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Agribusiness

Rooting Out Waste: How a Global Agricultural Distributor Cut Inventory Write-Downs by 50%

When you have to order crop seed a full year in advance, relying on lagging indicators and legacy spreadsheets is a recipe for high costs and aging inventory. Discover how this massive family-owned agribusiness, operating across 350 branches, partnered with o9 Solutions to implement automated ML forecasting. By shifting to an integrated platform powered by leading indicators, they drastically improved forecast accuracy, optimized their supply chain, and significantly reduced seasonal product waste.

This large agricultural distributor with 350 branches experienced inventory issues due to inaccurate forecasting, which resulted in high costs and an aging inventory.

Sustainability impact

Reduction of product waste and reduction of inventory.

challenges

Complexity to Clarity

Challenge

For each season, the company needed to place a product order (eg, seeds for crops) one year in advance, which was forecast poorly due to reliance on lagging indicators to predict demand. This resulted in a large write-off of seasonal inventory.

Solution

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.

Value Delivery

Systems Replaced

  • Homegrown solutions
  • Excel

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.

Customer Benefits

success factors

  • o9’s highly differentiated Enterprise Knowledge Graph, bringing all key functions together on one platform, enabling the 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.

KPI Impacted

  • Inventory optimization with about 50% reduction in write-downs.
  • Improved response time to suppliers.
  • Significant improvement in operational efficiency for demand planning.
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