INDUSTRY: Wholesale Distribution
Optimization Software and Predictive Analytics for the Wholesale Distribution Industry
Many food manufacturers and distributors have seen input costs increase at a significantly faster pace than previously experienced. With vast product lines and large customer rosters, it is difficult to accurately assess product and customer margin contribution. The volatility in commodity costs creates large risks in forward margins. SignalDemand's Predictive Analytics and Optimization software enables food distributors to gain margin by reducing procurement costs for food commodities and by stopping margin leaks in their pricing processes.
Food distributors, including Sysco, Ventura Foods and National Frozen Foods, use SignalDemand software to gain new levels of transparency in the pricing processes.
Cost Forecasting
- Develop a deep understanding of the commodity food markets through accurate market price forecasts delivered through a forecasting workbench
- Determine the costs for internal items that take into account the yields, internal costs, formulas and other price differentials
- Forecast the impact of changing costs on the pricing of finished products
Risk Management
- Estimate dollarized risk in your procurement plans given the volatility in the market prices
- Minimize the risk in your buy and sell decisions through accurate cost forecasts
- Determine the portfolio of risk management strategies (such as grain futures, short or long term trade) that produce the highest profit at an acceptable level of risk
Price Management
- Segment market into price and demand groups and identify the historical price laggards in each group
- Determine true costs and profitability of each deal/contract
- Implement strategy to grow margin on price laggards and grow volume on price leaders
