Predictive Inventory Management for QSRs

Business Problem Statement

• For Quick Service Restaurants (QSRs), there is an impending need to continuously and effectively monitor current inventory status of key ingredients to take pre-emptive & corrective decisions on stock management in stores and timely inventory transfers in the supply chain.
• Several factors inhibit the efficient handling of in-store inventory including inaccurate demand forecasting, stock visibility, and lead time variability.
• Inaccurate forecasts can lead to stockouts or excess inventory, both of which negatively impact customer satisfaction and increase costs.

Solution Overview

• The solution leverages Pega Customer Decision Hub to predict near-term sales for all SKUs and ingredients at each store and offers next-best decisions such as Intra-Store Allocation, Store-to-Store Transfer, Returns Disposition etc. based on Over/Under Inventory calculations.
• The solution factors in the variability of key predictors influencing sales such as seasonality, promotions, store location, weather etc.
• The solution will help in:
  
  • Identify profitable stock transfer opportunities.
  • Minimize out-of-stock and subsequent lost sales by capitalizing on revenue opportunities.
  • Rebuild product assortment across your business.
  • Recalibrate promotions leading to improvised product planning.

Solution Architecture

Business Benefits

• Reduction of Inventory carrying costs while maintaining healthy in-stock levels across stores.
• Improved Cash Conversion cycles with timely replenishments and identification of intra-store transfers.
• Improved revenue due to minimised lost sales and stockouts.
• Optimized Promotion Recalibrations like BOGO, Percent Off, Dollar Off etc. based on Under/Over Inventory calculations.
• Intelligent Returns Disposition for timely disposal, reduced inventory waste and reduced overhead costs.
• Re-Build Product Assortment: Avoid being left with fringe quantities and inventory distortion across your stores & channels.