Advanced AI-Powered Demand Forecasting System for FMCG Companies

The client relies on standard forecasting methods which are time-consuming and produce low-accuracy data, leading to deviations exceeding 30% from actual demand, overstocking, and understocking issues. Manual adjustments consume 60-70% of analysts' work time, hindering agility in responding to market dynamics. Variability in demand influenced by seasonality, promotions, weather, competitors, and regional factors complicates accurate planning and cost optimization.

A mid to large-sized FMCG manufacturer with an established distribution network seeking to enhance demand prediction accuracy and operational efficiency through automated, AI-based analytics.

• Increase initial forecast accuracy by at least 20-25% within the first week of deployment.
• Reduce deviation from stable demand benchmarks to under 1%.
• Automate at least 40% of the demand analysis and forecasting processes to improve efficiency.
• Enable the generation of short-term operational (2-8 weeks) and long-term strategic (up to 5 years) forecasts.
• Support optimal inventory levels, reduce overstocking and understocking costs, and improve supply chain responsiveness.

• Automated data ingestion and preprocessing, including outlier detection and handling outliers based on deviations from median sales.
• Custom data splitter to ensure robust training and testing datasets for AI models.
• Integration of statistical, weather, and calendar-based attributes to factor in external demand influencers.
• Generation of operational forecasts for short-term planning (2-8 weeks) and strategic forecasts for long-term planning (up to 5 years).
• User-friendly dashboards with visualizations for forecast accuracy, deviations, and confidence intervals.
• Alerting system for forecast anomalies or significant deviations.
• Reporting modules for custom analytical reports and scenario analysis.

• Enterprise resource planning (ERP) systems for sales and inventory data
• Weather data providers for external demand influencing factors
• Promotion and marketing activity calendars
• Logistics and supply chain management systems

• High scalability to accommodate increasing data volume and user base
• Performance capable of generating forecasts within acceptable timeframes (e.g., minutes for operational, hours for strategic forecasts)
• Security protocols to protect sensitive sales and inventory data
• Reliability with 99.9% uptime for continuous forecasting operations
• Ease of use with an intuitive UI and comprehensive reporting features

The deployment of this demand forecasting solution is expected to improve forecast accuracy by at least 20-25% initially, reduce deviation from stable benchmarks to under 1%, and cut the time analysts spend on manual data adjustments by 40%. These improvements will enable better inventory optimization, reduce costs associated with overstocking and stockouts, and enhance supply chain agility, leading to increased sales and profitability.