Predicting Stockouts in FMCG: Enhancing Resilience Through Data-Driven Insights
Predicting Stockouts in FMCG: Enhancing Resilience Through Data-Driven Insights
FMCG (Fast-Moving Consumer Goods) sector has significant growth potential, with its current value of 10 trillion dollars expected to reach 15 trillion dollars by 2025. However, recent disruptions—including the COVID-19 pandemic, the blockade of the Suez Canal, and port congestion—have further complicated the sector's complex supply chains and unpredictable demand patterns. These challenges have highlighted the fragility of the FMCG sector, leading to unmet customer demand and jeopardizing operational resilience.
In this context, a comprehensive project aims to identify the primary factors leading to low case fill rates (CFR) in FMCG companies and develop predictive models to improve future CFR performance. The project offers a transformative approach to CFR management using data-driven insights, targeting increased sales, customer loyalty, and overall resilience across the FMCG landscape.
Key Takeaways
The FMCG sector is expected to reach 15 trillion dollars by 2025.
The sector has faced disruptions including the COVID-19 pandemic and the blockade of the Suez Canal.
Low CFR can lead to lost sales, erosion of customer loyalty, and potential contract breaches.
The project followed a three-phase methodology: business understanding, modeling, and validation.
Forecast accuracy and demand variability have been identified as key drivers of CFR.
Hybrid models and advanced time series machine learning models have demonstrated high accuracy and precision in CFR prediction.