History Cleansing After the Unexpected Disrupts Data

The global pandemic is affecting many companies’ sales, inventories, forecasts, and ultimately their entire supply chains, but it doesn’t stop there. Not only are their current plans affected in the short-term, but in the long-term, their future forecasts will need to be adjusted. Plantensive had previously worked with a client on a very similar data disruption due to a natural disaster and were able to make changes to future reports so their forecasting wouldn’t be impacted by unreliable data. Continue reading to see how we partnered with this grocery chain to solve their sales and inventory forecasts along with step-by-step solution instructions.

Challenge

Our client, a Texas-based grocery chain in operation for 100+ years is one of the largest independently owned retailers generating over $28 billion in annual sales.  Operating more than 400 stores in the state of Texas and northeast Mexico, with over 120,000 employees.  This grocery chain operates in five different retail formats.  One of the formats has an expanded focus on non-food categories such as baby, card and party, cosmetics, entertainment, housewares, and toys. 

In August of 2017, Hurricane Harvey made landfall on the Texas coastline with nearly 100 of this grocer’s brick and mortar locations in its path. This resulted in 83 of the stores closing due to damage caused by the hurricane. For the remaining open stores, the sales increased for the grocery categories including bread, milk, eggs, water, and toilet paper.  In general merchandise, sales increased in emergency categories such as batteries, flashlights, and candles.  In the first week alone, candles increased by 175% in sales from the previous year. 

Retail forecasting can be considered a mix of both art and science.  Forecast too much, and you’ll have excess inventory that increases overhead cost.  Forecast too little, and you may miss sales opportunities as well as diminish the customer experience.  The optimal forecast requires statistical data that is accurate to provide a baseline for future merchandise plans.  The challenge is establishing a baseline with data that has been disrupted by a natural disaster causing store closures and sales spikes in certain categories.

Our Solution

Plantensive worked with the grocery chain on a solution that developed a combined baseline to seed the future merchandise plan. The last year’s data was used to seed the present year plan with an established Sales and Inventory curve for all categories and all weeks.  For those categories impacted by the hurricane, Sales and Inventory was re-seeded with data from two years previous, and only for impacted weeks.

The Process:
  1. Create reports that identified the specific weeks and categories affected by the hurricane.
  2. Seed the future merchandise plan with last year’s data for all weeks and categories to establish a curve for Sales and Inventory.
  3. Build an automated process that overlays Sales and Inventory with data from two years ago. Only the categories and weeks impacted by the hurricane were overlaid with this data.
  4. Using the combined data as a baseline and start planning the forecast.

In Conclusion

Although it is typical to use historical data when building a forecast, a natural disaster or pandemic can disrupt data, making it difficult to make informed decisions and predictions.  There are solutions for providing a more accurate baseline.  Partner with Plantensive and let us help you through this difficult period.

Plantensive is a supply chain and retail planning solutions provider to many of the fortune 500 and mid-market companies across the CPG, distribution, manufacturing, and retail industries. We provide end to end supply chain solutions and proven tools to accelerate value. We build, implement and optimize dynamic, reliable supply chain solutions aligned with your business strategy so you can meet demand efficiently and build network resiliency to adapt to business challenges, new regulations, and potential disruptions. From building strategy to implementing it, we’ve got you covered. Plantensive’s global supply chain services meet you wherever you are in your journey – from your suppliers to your customers.

In addition, Plantensive offers a professional planning concierge service that provides staff augmentation and strategic staffing for any type of work within the value chain. To learn more about this service, contact us today.

We have worked with thousands of clients across a diverse set of industries.
Share:
Share on facebook
Share on twitter
Share on linkedin

Plantensive is becoming

part of MorganFranklin Consulting
plantensive logo