Pricing plays a crucial role in the cargo industry, directly influencing profitability, market competitiveness, and customer satisfaction. Effective cargo pricing strategies are essential for optimizing revenue generation while maintaining a balance between customer demands and operational costs. In this article, we will explore the strategies and approaches that can empower cargo carriers to succeed in this dynamic and challenging landscape, with help from DoubleBlaze.

The Importance of Cargo Price Optimization

Optimizing cargo pricing is a multifaceted approach that requires a deep understanding of industry dynamics, market conditions, and the intricacies of cost structures. For cargo carriers seeking to thrive, achieving the right balance is essential. DoubleBlaze Consulting is poised to provide the guidance and strategies necessary to strike that balance effectively.

Pricing Objectives and Considerations

Studies have consistently highlighted the significance of aligning cargo pricing strategies with specific objectives. Whether it’s revenue maximization, market share expansion, or cost recovery, DoubleBlaze Consulting can help you implement pricing strategies that precisely meet these objectives, offering cargo carriers a roadmap to profitability.

Accurate cost estimation is equally crucial. Underpricing or overpricing can have detrimental consequences. DoubleBlaze Consulting excels in employing advanced methodologies, including activity-based costing, to ensure that pricing accurately reflects the costs associated with cargo services.

Market-Based Pricing Excellence

Market-based pricing strategies have proven to be pivotal in capturing customer value while considering competitive offerings. DoubleBlaze Consulting’s team of experts understands market dynamics, demand elasticity, and competition, enabling them to create pricing strategies that are not only competitive but also aligned with customer value.

Optimizing Revenue with DoubleBlaze Consulting

A significant advantage that DoubleBlaze Consulting brings to the table is its expertise in revenue management. Cargo carriers often employ revenue management strategies borrowed from the airline industry to optimize pricing and capacity allocation. Dynamic pricing models, such as yield management and capacity-controlled pricing, allow carriers to adjust prices based on real-time demand information. This ensures optimal utilization of available capacity and maximizes revenue, a feature that can significantly enhance cargo carriers’ profitability.

Enhancing Customer Satisfaction and Loyalty

The use of bundling and packaging strategies to enhance cargo pricing effectiveness is another domain where DoubleBlaze Consulting shines. By combining different services or offering value-added packages, carriers can create price differentiation and attract customers with varying needs. These strategies not only help increase customer satisfaction and loyalty but also contribute to optimizing revenue streams.

Navigating Complex Pricing Scenarios

For cargo carriers involved in intermodal transportation, where multiple modes of transportation, such as air, sea, road, and rail, are utilized, pricing decisions can be particularly complex due to diverse cost structures and service characteristics across modes. DoubleBlaze Consulting suggests coordinated pricing models that consider intermodal connectivity, cost-sharing arrangements, and service integration. These considerations are essential for ensuring profitability and competitiveness in intermodal cargo transportation.

E-Commerce Logistics Pricing Strategies

The growth of e-commerce has introduced unique pricing challenges for cargo carriers, particularly in the context of last-mile delivery and returns management. DoubleBlaze Consulting tailors pricing strategies to meet these specific challenges, exploring dynamic pricing, surcharging, zone-based pricing, and other techniques specifically tailored to e-commerce logistics. These approaches aim to address cost inefficiencies and provide competitive pricing options while meeting customer expectations for quick and reliable deliveries.

Conclusion

Cargo pricing strategies are vital to the success and sustainability in cargo operations. DoubleBlaze Consulting, with its in-depth knowledge and expertise, is your ideal partner in this endeavor. By understanding the nuances of cost structures, demand, competition, and customer preferences, DoubleBlaze Consulting can assist cargo carriers in making informed pricing decisions that optimize revenue generation, maintain competitiveness, and meet customer expectations in the dynamic cargo industry.

The dynamic nature of the cargo industry necessitates ongoing research and adaptation. Further exploration of emerging pricing models, in response to evolving market dynamics and technological advancements, is a task that DoubleBlaze Consulting is well-equipped to undertake on behalf of its clients.

Unlock the full potential of your cargo pricing strategies with DoubleBlaze Consulting as your trusted partner. Contact us today to embark on a journey toward optimized revenue, profitability, and customer satisfaction.

Before diving into AI/ML implementation, your company will need to conduct an initial assessment. This phase involves identifying specific business challenges, opportunities, and goals that AI/ML can address. DoubleBlaze Consulting specializes in this step by using their industry templates to tailor solutions to your unique needs.

Data Preparation: ML/AI relies on data to uncover hidden patterns and insights. Expect to invest time and effort in data preparation. This may involve data cleansing, integration, and ensuring data quality. The better your data, the more effective your AI/ML implementation will be.

Visualization and Interpretability:  AI/ML models developed by DoubleBlaze Consulting prioritize decision support over black-box recommendations. Expect to have tools and visualizations that allow you to understand and interpret the AI/ML insights. This transparency is essential for building trust and confidence in the recommendations.

Focused Problem Solving: ML/AI should be applied to well-defined and understood business problems. Avoid the temptation to use AI for everything; it’s not a silver bullet. Instead, focus on problems that can benefit the most from AI/ML optimization. DoubleBlaze’s industry templates can help identify these areas.

Pilot Projects: Expect the implementation to start with a pilot project. This is a small-scale test of the AI/ML solution using a limited dataset and specific business goals. It allows your team to understand the practical implications and value of AI/ML in a controlled environment.

Customized Solutions: DoubleBlaze Consulting offers industry-specific templates to tailor AI/ML solutions to your needs. Expect these templates to be customized to your business’s unique challenges and goals. The goal is to provide you with a solution that fits your business like a glove.

Incremental Improvements: Don’t expect immediate, dramatic changes. AI/ML implementation is an iterative process. Over time, you can expect incremental improvements as you fine-tune the algorithms and models to your business environment.

Long-Term Value: AI/ML is not a one-time project but an ongoing process. You should expect long-term value from your investment. As you gather more data and refine your AI/ML models, the benefits should continue to grow.

Business Transformation:  As you implement AI/ML solutions, expect a transformation in your business processes. It may lead to changes in pricing strategies, inventory management, customer engagement, and more. Be prepared for organizational changes to fully realize the value of AI/ML.

Data Security and Privacy: Implementing AI/ML also comes with data security and privacy considerations. Expect to invest in data protection measures to ensure that customer data and business information are safeguarded.

User Training: Your team may need training to make the most of the AI/ML tools and insights. Be prepared to invest in training programs to ensure your employees can use these tools effectively.

Measuring Success: Define key performance indicators (KPIs) and expect to continually measure the success of your AI/ML implementation. Adjust your strategy as needed to achieve the desired outcomes.

By setting these expectations, your readers will have a clear understanding of what to anticipate when implementing AI/ML solutions in the retail industry and how DoubleBlaze Consulting’s services can help them navigate this transformative journey.

Staying ahead of the curve is imperative with today’s competitive market. Retailers recognize the potential of harnessing Artificial Intelligence (AI) and Machine Learning (ML) to redefine their strategies, but many find the journey fraught with challenges. Traditional approaches, such as costly enterprise software solutions and hiring data scientists who may not grasp the nuances of your business, often fall short of delivering the desired value.

Enter DoubleBlaze Consulting. With a wealth of industry experience and a deep-rooted understanding of data science, we’ve crafted industry-specific templates that pave the way for harnessing the power of AI and ML, making it accessible to businesses with a modest initial investment and rapid returns. Our retail analysis offering is Enterprise Pricing, an innovative set of templates designed to optimize your pricing strategies. But how does it work, and what can you expect from our services?

The Blueprint for Retail Transformation: DoubleBlaze’s Services

At DoubleBlaze Consulting, one of our missions is to help retailers transform their operations using AI and ML, and we offer a range of services to achieve this goal. Here is the value each template can bring to your retail business:

1. Broad Analysis of Items:

To embark on your AI/ML journey, we begin with a comprehensive analysis of your product catalog. This involves determining Key Value Items (KVIs), the cornerstone of our approach. KVIs represent the top X% of items that yield the most significant returns. However, we don’t stop at KVIs alone; we have the flexibility to expand the analysis to include other categories such as Slow Movers, Background items, and Foreground items. These category definitions may vary from one business to another with many businesses already having some idea of KVIs.  However, this categorization is often based on legacy knowledge or subjective opinions.

2. Basket and Cross Sell Analysis:

Understanding customer behavior is pivotal in retail. Our basket and cross sell analysis dives deep into the correlation between items, shedding light on what your customers typically purchase together. For example, if a customer buys peanut butter, there might be a 75% chance they’ll also purchase jelly (an illustrative example). Or in apparel if the customer buys a particular blouse there could be a higher chance they would buy an accessory. The real value lies in uncovering more subtle connections that might be overlooked in traditional basket and cross sell analysis. By understanding the composition of your customers’ intended purchases, you can plan cross-product promotions, bundles, pricing adjustments, and more intelligently enhance your customer experience.

3. Elasticity Study:

Price changes can significantly impact your sales and profitability. Our elasticity study aims to provide insights into which products are more sensitive to price changes and which are not. It connects this analysis with your KVIs and cross sell analysis, resulting in a concept we call “basket elasticity” or for apparel, “cross sell elasticity.” In essence, if a KVI item is both a purchase driver and highly responsive to price changes, altering its price can have a substantial impact on complementary items. This understanding allows for smarter decisions on pricing, promotions, and assortment planning.

4. Recommendations:

Ultimately, our goal is to provide you with a tool that can recommend optimal prices, incorporating elasticity and ML insights into the decision-making process. While this is a work in progress, the vision is to create an analysis template that can seamlessly integrate with your pricing tool, acting as an “add-on.” This add-on can optimize your top KVIs or other strategically important items, which drive a significant portion of your revenue and profits. It can potentially function as a stand-alone tool or work alongside your existing pricing solutions, depending on your business’s unique needs.

In conclusion, DoubleBlaze Consulting is not just another service provider. We are your partner in retail transformation, offering a suite of services that empower your business with the intelligence and insights needed to thrive in a dynamic marketplace. By embracing AI and ML, you can navigate the challenges of the modern retail world and unlock new opportunities for growth, efficiency, and customer satisfaction. Your journey with DoubleBlaze starts here, and the possibilities are boundless. This is how to get started.

In today’s rapidly evolving retail landscape, it’s no secret that Artificial Intelligence (AI) and Machine Learning (ML) are set to revolutionize the way companies plan and strategize. Retailers understand that the future lies in harnessing the potential of AI and ML, but the path to realizing its full value has challenges. Traditional enterprise software solutions are often too costly and time-consuming to implement, and they only excel in specific scenarios. Alternatively, hiring in-house data scientists can be problematic as they often lack the nuanced understanding of the retail business domain, requiring extensive subject matter training to become truly effective.

This is where DoubleBlaze Consulting steps in, offering a smarter way forward. Drawing upon our extensive industry experience and data science expertise, we’ve devised specialized industry templates that enable your retail company to harness the power of AI and ML without the massive upfront investment and protracted timelines. One of our core solutions, Enterprise Pricing, exemplifies the potential these technologies hold for your business.

Demystifying AI/ML for Retail: How It Works

The keys to realizing the benefits of AI/ML within Enterprise Pricing can be broken down into several essential elements:

1. Data: The Fuel for AI/ML

AI and ML success or failure is completely reliant on data. The tools excel at uncovering concealed patterns and relationships within large datasets. While these technologies can work with incomplete data, their true potential shines when fed with well-managed, high-quality data. Expect the initial stage of your AI/ML journey to involve data preparation and cleansing, ensuring your data is in optimal shape for analysis.

2. Visualization: Transparency and Clarity

One of the hallmarks of our approach is providing decision support rather than black-box recommendations. Transparency is key. Our solutions come with visualization tools that enable you to understand and interpret the insights generated by AI and ML. This empowers your team to make informed decisions based on clear, comprehensible data.

3. Focused Problem Solving: Tailored Solutions

The crux of AI/ML implementation is to apply these technologies to well-defined and understood business problems. Avoid the temptation of using AI for everything; instead, focus on areas where it can make the most significant impact. Our industry templates are designed to pinpoint these problem areas, ensuring that the resources you invest in AI/ML are maximized for tangible results.

Piloting Your AI/ML Journey

Embarking on your AI/ML journey typically begins with a pilot project, a small-scale test of the technology’s capabilities using a limited dataset and specific business objectives. This stage serves as a stepping stone, offering a glimpse of what’s possible and how AI/ML can directly benefit your retail company.

What to Expect from Our Industry Templates

Our industry templates offer tailored solutions for your unique challenges. Here’s a glimpse of what you can anticipate:

Identifying and Correcting “Insult Pricing” and “Give-Away” Pricing: Detect and rectify pricing strategies that may harm your business by underestimating or over-discounting your products.

KVI Optimization Template: Ensure your pricing strategy doesn’t leave potential profits on the table by optimizing key value items (KVIs).

Pricing Zone Template: Boost your margins by fine-tuning your price zones to reflect the market’s demands and customer preferences.

ML/AI Basket Analysis & Cross Sell Analysis: For businesses with mature processes, this tool identifies hidden relationships in item purchases and uses elasticity to increase margins on groups of items commonly purchased together.

In summary, embracing AI and ML in your retail business is an opportunity to gain a competitive edge, but it requires the right approach. DoubleBlaze Consulting offers a clear roadmap, combining industry expertise and advanced data science to help your business unlock the true potential of AI and ML in a cost-effective and time-efficient manner. Your journey starts with understanding the data, gaining transparency through visualization, and focusing on specific business problems, all of which will be facilitated by our industry templates. Expect a gradual transformation that promises long-term value and a brighter future for your retail enterprise. Click here for more on our retail industry templates and here on how to get started.

In today’s ever-changing manufacturing landscape, pricing specialists face unique challenges in maximizing revenue for their products. DoubleBlaze, a leading pricing specialist with a proven track record, can empower you to understand which strategies are working, which ones need adjustment, and which ones require an overhaul. Below, we will discuss how DoubleBlaze can help answer these questions for you and assist you in taking control of your pricing strategies.

Comprehensive Analytics Solutions for Manufacturers

Manufacturers recognize the importance of data-driven decision-making. DoubleBlaze specializes in providing comprehensive analytics solutions tailored for manufacturers, bridging the gap left by traditional data sources. Our team can empower your business users with advanced analytics capabilities, including competitive price indexes, price comparisons with competitors, customer segment analysis, demographic analysis, rebates, contracts, and other relevant information.

Modern Infrastructure Implementation

Whether you are working with an existing infrastructure or starting from scratch, DoubleBlaze has you covered. Our experts can seamlessly integrate a data pipeline framework, establishing a robust data lake. Utilizing cutting-edge tools like DataBricks and DBT, we create bronze, silver, and gold data transformations, providing you with unparalleled access to insightful data.

Visualizing your data is crucial for making informed decisions. Top-tier reporting platforms like Tableau, PowerBI, and Looker enable a powerful reporting infrastructure that offers clear, actionable insights for your business. We can implement these tools in conjunction with the data pipeline or on their own to provide your analysts with the tools they need to make better decisions.

Track Record of Success

Here are some of the tools we can implement to empower your analytics team as manufacturers:

Advanced Sales Analytics

Leverage modern technologies to unlock the full potential of your sales data.

Tailored implementations allow for in-depth analyses of sales history and competitive price indexes for your products.

Custom analysis options effectively address specific manufacturing challenges.

Customized Infrastructure

Flexibility is key in data management. We can adapt our services to your existing infrastructure and provide cutting-edge data pipeline frameworks when you are looking to revamp your systems.

We transform data into bronze, silver, and gold data levels using tools like DataBricks and DBT for maximum efficiency.

Actionable Insights through Analysis

We help manufacturers establish robust analysis infrastructures using platforms like Tableau, PowerBI, and Looker.

Comprehensive data visualization leads to informed decisions that fuel business growth.

Manufacturing Revenue Analytics Approach

Our approach to manufacturing performance analytics is a step-by-step process that ensures success:

Data Lake Ingestion

The process begins with the establishment of a robust data lake, capturing a comprehensive range of data, including sales figures, forecasts, product prices, discounts, promotions, rebates, credits, and competitive revenue data.

Collaboration with clients is essential for defining specific data points that align with unique analytics needs.

Data Transformation

Meticulous data refinement into more structured formats makes it easier to analyze and extract valuable insights. We transform data into bronze, silver, and gold levels for further analysis.

Advanced Statistics

Integration of advanced statistical techniques, such as product elasticity and variance from forecasts, provides a richer understanding of revenue strategies.

Machine Learning Integration

With a solid framework in place, DoubleBlaze introduces machine learning techniques to uncover hidden patterns and further optimize revenue strategies.

Summary

In the competitive world of manufacturing, DoubleBlaze stands as a trusted partner in revolutionizing pricing and revenue strategies. Our comprehensive analytics solutions, modern infrastructure implementation, and robust reporting infrastructure have consistently delivered actionable insights and unprecedented success for manufacturers. Don’t miss the opportunity to elevate your manufacturing business to new heights—connect with DoubleBlaze today and embark on a journey towards unparalleled success in the realm of pricing strategies and revenue optimization.

In the dynamic world of holiday package pricing for travel and hospitality companies, revenue management poses a significant challenge. Traditional demand forecasting models often fall short, struggling to reflect competitive price differences and adapt to rapidly changing market conditions. In this blog post, we’ll explore the complexities of revenue management in the context of tour package pricing and how innovative solutions are reshaping the industry.

Challenges in Existing Demand Forecasting Models

1. Ineffectiveness: Traditional models fail to provide accurate forecasts, especially for package products with multiple components.
2. Competitive Price Differentials: They often overlook the critical factor of competitive pricing differences, which can significantly impact demand.
3. Complexity: The conflicting demand for each component within a package further complicates forecasting.
4. Slowness to Adapt: These models are slow to respond to changes in the competitive landscape or market situations, resulting in missed opportunities.
5. Challenging Assumptions: The assumption that price increases close to the arrival date is always effective is not always accurate.

The Goals: Automated Recommendation Processing

To tackle these challenges, the goal is to enable automated recommendation processing in revenue management. This approach aims to:

1. Quantify Strategic Objectives: Provide a framework to quantify strategic objectives and apply them consistently.
2. Define Rules: Define rules for various scenarios, eliminating the need to review each recommendation manually.
3. Empower Revenue Management: Shift the focus from micro-management to strategy development.

Tour Package Pricing Overview

A successful revenue management solution consists of several key components:

1. Representative Package Model: Selects essential packages to optimize markup/margin by flight, property-key room type, and room night.
2. Price Response Model: Develops a ‘win’ probability curve based on price and price differentials compared to key competitors.
3. Component Optimization Model: Utilizes Mixed Integer Optimization (MIP) to generate optimal price recommendations for flight and hotel components. It simulates how these changes impact representative packages.
4. Aggregate Markup Maximization: The best component prices are determined by maximizing the expected probability of winning customers over competitors, leading to aggregate markup optimization.

What Do We Optimize?

The solution optimizes a combination of flight and hotel mark-ups to achieve the overall optimal price. Factors to consider include:

1. Cross-Network Effects: Increasing flight mark-up affects all packages at a destination, while hotel mark-up impacts all points of origin for the same destination.
2. Length of Stay: Flight and hotel markup effects may vary based on the length of stay, which competitor pricing is not linearly dependent upon.
3. Balancing Act: Recommendations must balance between increasing margins and the impact on different package components.

Example of Post-Optimization Rules

To fine-tune recommendations, post-optimization rules are applied:

1. Volume and Profitability: Rules are defined to index responses to deviations from target volume or profitability.
2. Margin Adjustments: Pricers apply rules to adjust margins up or down from the optimized value to achieve volume or profitability objectives.
3. Special Cases: Rules may also apply for bulk overrides, promotions, room type variations, and controlling distribution channel availability.

Solution Benefits

The implementation of this automated solution brings significant benefits to hoteliers, resort operators, and package tour providers:

1. Demand Flexibility: It caters to industries with challenging demand forecasting and less dependence on days to arrival.
2. Dynamic Competitor Pricing: Rapid pricing responses are enabled, considering competitor pricing dynamics.
3. Tailored Strategies: Different product lines can be managed with unique strategies, addressing risk and non-risk inventory effectively.
4. Consistency: Maintains consistent decision-making and reduces the reliance on specific revenue management skills.

Conclusion

The challenges of revenue management in the tour package industry are met with innovative solutions that prioritize automation, data-driven decision-making, and optimization. By leveraging technology and advanced modeling, businesses can not only navigate the complexities of demand forecasting but also thrive in a competitive landscape. The transformation of revenue management is reshaping the industry, empowering businesses to achieve their strategic objectives and maximize profitability.

In the ever-evolving world of travel and hospitality, pricing specialists face unique challenges in optimizing revenue for holiday packages. While airlines allocate a significant portion of their technology budget to airfare, holiday specialists often find themselves in need of tailored solutions. Enter DoubleBlaze, a leading pricing specialist with a proven track record in empowering businesses to achieve unprecedented success in their pricing and revenue strategies. In this blog post, we’ll explore how DoubleBlaze can help you take control of your pricing strategies and elevate your sales performance in the world of travel and hospitality.

Comprehensive Analytics Solutions

We understand the importance of data-driven decision-making. That’s why we specialize in providing comprehensive analytics solutions tailored for holiday specialists. Our team can bridge the gap left by traditional airline data, empowering your business users with advanced analytics capabilities. This includes price competitive indexes, competitive price shopping on packages, website data collection for conversion rates, website demographics, and other relevant information.

Modern Infrastructure Implementation

Whether you’re working with an existing infrastructure or starting from scratch, DoubleBlaze has you covered. Our experts can seamlessly integrate a data pipeline framework, establishing a robust data lake. With bronze, silver, and gold data transformations utilizing cutting-edge tools like DataBricks and DBT, you’ll have unparalleled access to insightful data.

Visualizing your data is key to making informed decisions. Top-tier reporting platforms like Tableau, PowerBI, and Looker enables a powerful reporting infrastructure that provides clear, actionable insights for your business. We can implement these tools in conjunction with the data pipeline or on its own to give your analysts the tools they need to make better decisions.

Track Record

Here are some of the tools we can implement to power your analytics team:

Advanced Sales Analytics

• Leveraging modern technologies, DoubleBlaze can allow you to unlock the full potential of your sales data
• Tailored implementations allow for in-depth analyses of sales history and competitive price indexes for holiday packages
• Custom analysis options address specific business challenges effectively

Customized Infrastructure

• Flexibility is key in data management. We can adapt our services to your existing infrastructure and provide cutting-edge data pipeline frameworks when you’re looking to revamp your systems
• We transform data into bronze, silver, and gold data levels with tools like DataBicks and DBT for maximum efficiency

Actionable Insights through Analysis

• We help companies establish robust analysis infrastructures using platforms like Tableau, PowerBI, and Looker
• Visualizing data comprehensively leads to informed decisions that fuel business growth

Holiday and Vacation Revenue Analytics Approach

Our approach to holiday and vacation performance analytics is a step-by-step process that ensures success:

Data Lake Ingestion:

The process begins with the establishment of a robust data lake, capturing a comprehensive range of data, including sales figures, forecasts, offered prices, accepted prices, discounts, promotions, rebates, credits, and competitive revenue.

Collaboration with clients is key to defining specific data points that align with unique analytics needs.

Data Transformation:

Meticulous data refinement into more structured formats makes it easier to analyze and extract valuable insights. We transform data into bronze, silver, and gold level for further analysis.

Advanced Statistics:

Integration of advanced statistical techniques, such as revenue elasticity and variance off forecast, provides a richer understanding of revenue strategies.

Machine Learning Integration:

With a solid framework in place, DoubleBlaze introduces machine learning techniques to uncover hidden patterns and further optimize revenue strategies.

Conclusion

In the competitive world of holiday and vacation packages, DoubleBlaze stands as a trusted partner in revolutionizing pricing and revenue strategies. Our comprehensive analytics solutions, modern infrastructure implementation, and robust reporting infrastructure have consistently delivered actionable insights and unprecedented success. Don’t miss the opportunity to elevate your business to new heights—connect with DoubleBlaze today and embark on a journey towards unparalleled success in the realm of holiday packages.

At DoubleBlaze, our BlueYonder consultants started out deploying their pricing solutions over 12 years ago and are the BlueYonder premier partner for implementing their pricing solutions. We frequently work with retailers to help solve pricing problems, offering advice, building case studies, and architecting the best path forward. While retail price optimization and price list management software are strong suits in our practice, we also focus on their other solutions for retailers including demand planning, category management, and warehouse management.

BlueYonder Demand Planning

BlueYonder (formerly JDA) Demand Planning is a solid tool for managing retail forecasts. BlueYonder has two flavors of demand planning currently, the traditional planning tool based on their Supply Chain Planning and Optimization (SCPO) platform and the newer Luminate tools based on machine learning. A little bit of history is that a few years ago, JDA recognized they were falling behind in the use of machine learning tools so they acquired a small company out of Germany called BlueYonder that was strong in machine learning. They liked the name so much they adopted it for themselves and are now known as BlueYonder. The legacy BlueYonder company from Germany had a long history in machine learning which allowed JDA to leap forward in their use of the technology. At DoubleBlaze, we service both the traditional BlueYonder Demand & Fulfill as well as Luminate Demand Edge.

Category Management Consulting

The BlueYonder Category Management platform that we in the community call Cat Man handles all category management functions including space planning, planograms, and assortment optimization. The solution allows you to deliver better assortments, create better floor plans and planograms, and ensure you have the right products at the right stores in the right place to increase your margins. The system also helps maximize inventory and reduce carrying costs. At DoubleBlaze, we help retailers and CPG customers with new implementations, train employees on the solution, and update or enhance their current implementation.

BlueYonder Warehouse Management

The BlueYonder Warehouse Management System (WMS) is the third pillar in our extended BlueYonder retail planning focus. The BlueYonder solution handles the base use cases such as picking, packing, shipping, receiving, etc. as do most of the solutions on the market today. But it also handles more complex use cases such as slotting, yard management, and real time inbound/outbound processing. As with the other solutions, DoubleBlaze can handle new implementations, go lives, or enhancements.

New Projects or Enhancements

Whether you are starting a new project or need simple enhancements, our BlueYonder consultants can help. We can provide turnkey implementation services or staff augmentation with project managers, solution architects, functional and technical consultants. Schedule a meeting with us if you have an opportunity.

Lead Time Calculation is Hard

What’s in a delivery date? Turns out a lot in today’s complex supply chains making lead time calculation very difficult!  As discussed in our previous blog article Intersection of Price Product and Availability, customers want to know what product they’re getting, how much it costs, and when they can get it.  Each of these questions are answered in increasingly complex ways as manufacturers, distributors, and retailers optimize their operations, supply chains, and diversify their customer touchpoints.

Specifically here, we’ll touch on delivery date or lead time calculation and available-to-promise (ATP).  Delivery date comes into play before the order has been promised when a customer is trying to finalize an order.  As supply chains optimize, there aren’t as many finished goods in the system so determining delivery dates is more complex than simply checking inventory.  Also, in times of limited supply, goods may be tied up with contractual obligations on service levels and allocations.  Throw in build to order or mix options, and the myriad of permutations is even harder to predict.  Finally, there are transportation issues that could delay or complicate the answer. 

When we previously did this for a computer manufacturer, the permutations were so complex, we simply took a statistical average for lead time and used that, then when they couldn’t deliver on time, they’d notify the customer and take the customer satisfaction hit or make them happy by delivering early.  But when you’re a manufacturer selling to assemblers or selling through eTailers like Amazon or Ebay, they take delivery dates more seriously and if you miss your date there could be severe consequences.

Accurate Delivery Dates

So how do you limit your inventory exposure and also get an accurate delivery date back to customers?  Here are some of the ways we approach it:

• Standard Lead Time – As mentioned above, a standard lead time is the easiest to simply put on a product.  This is not always the most accurate or desirable method because it means you may have to keep more inventory than needed to maintain service levels.  In this case, we typically estimate the lead time by looking at past deliveries and then tweak that on products that are quicker to deliver or take longer using rules.
• Available to Promise – Available to promise is a complex mix that combines current orders with delivery dates, service levels, on hand inventory, and future deliveries.  Taking all these factors into consideration is difficult when you have a complex supply chain.  There are a couple products we use including BlueYonder’s Order Promiser and SAP IBP (formerly APO) that can accurately model all these moving parts and provide a good date.  With these systems, you also have the ability to move orders or delay them given service levels or a customer’s willingness to wait.
• Allocated Available to Promise – Building on ATP, in industries like semiconductor, there are also allocations to consider and limited supply.  These commitments complicate the delivery date answer because you may have firm orders further out that you’ve reserved inventory for, but need to satisfy an order now.  The AATP engines can see that you have replenishment orders pending and allow you to consume current inventory expecting that you will be able to satisfy the future orders with new inventory.
• Build to Order – Build to order needs a special mention because it complicates the process even more.  With build to order or configure to order we typically model the most constrained parts and don’t worry about the other parts that have more availability.  We have used the standard lead time method on the constrained parts in the past, such as processors for computer manufacturers, but have also used an ATP engine with the constrained parts.  Both methods work and it depends on the situation as to what we would recommend.

Customer Service and Lead Time

In all cases, customers and customer service people need the ability to query the ATP engine for availability or delivery dates when either taking orders, changing orders, or checking order status.  Customer service people also need the ability to make decisions like shifting availability when possible or pushing orders out when a customer allows it.  In large enterprises, these decisions must also happen in real time so that customers can make their own decisions.  As supply chains get more efficient and customers get more demanding, order promising quickly outgrows a customer service reps ability to simply check inventory and these ATP engines can fill that need.

What Next?

If calculating lead time and delivery dates is a problem for you, we can help. Whether you are using SAP, Oracle, some other ERP, or planning tool, we can extract the data and model your supply chain. For more information or to discuss how we can help, please schedule a call!

The goal of demand forecasting is typically to get a more accurate forecast and drive down inventory cost. A better forecast will lower costs for retailers by controlling inventory levels, lend insights to space planning, help back room inventory space, lower carrying costs, and limit excess inventory. When working with retailers, these are some of the areas we focus on.

Inventory Levels. A better forecast helps control inventory levels at stores as well as DCs and reduces the cost of carrying aged inventory, meaning less inventory dollars are aged out and can reduce shrink.

Space Planning. Forecasting allows for better space planning in stores with more accurate forecasts. For example, knowing that an item that sells 20 annually at any given location may not require 10 facings at every store, whereas a more popular item from a forecast perspective, may benefit from having more facings.

Storage. A better forecast aids in overstock/understock issues and saves “back room” inventory space due to just in time (JIT) replenishment. For example, as the old stock is about to run out, the new stock is being brought in and displayed resulting in less customer disappointment when items are out of stock.

Carrying Costs. Accurate forecasts allow for better allocation of purchasing dollars. For example, if an item is forecasting 1000 sales annually but is budgeted for 3000 items, the extra budget can be freed to put towards other items that may need more support.

Optimized Inventory. In retail, it is key to have the right amount of the right product at the right place at the right time which allows for money to be more intelligently spent on tactical decisions rather than excess inventory. A better forecast also allows for seasonality to be intelligently accounted for and included in the demand/inventory planning process.

These are a few of the areas we focus on when determining how a better forecast can benefit a retailer. Each area has a significant impact on cost. When we do a benefit analysis, we ask what the current forecast accuracy is and then calculate what impact a 3% or better improvement would mean across different categories. As more and better tools become available with machine learning, achieving a 3% improvement becomes much more feasible. We would be happy to do a high level assessment to help you justify a project.