AI-Powered Demand Forecasting
How an AI forecasting engine improved accuracy by 25%, reduced stockouts by 10%, and cut inventory costs by 15% for a national beverage company.
The Story
Fresh Sips Co., a national beverage brand known for its innovative flavors, was facing a classic CPG dilemma: the bullwhip effect. Minor fluctuations in consumer demand were causing amplified and costly swings in their inventory and production schedules. Their forecasting process, reliant on historical sales data and spreadsheet-based models, couldn't keep up with changing consumer tastes, promotional impacts, and regional variations. This led to frequent stockouts of popular products in some regions and costly overstocking of others, hurting both revenue and profitability.
The leadership team recognized that to improve margins and maintain shelf presence in a competitive market, they needed to move beyond traditional forecasting methods. The strategic goal was to adopt a more intelligent, data-driven approach that could predict demand with greater accuracy at a granular level, enabling a more agile and efficient supply chain.
What Did Medha Soft Do
Medha Soft was engaged to develop and deploy an end-to-end demand forecasting platform. Our team of data scientists and CPG experts worked closely with Fresh Sips' supply chain and marketing teams to build a solution that could synthesize diverse data sources into actionable intelligence.
Data Integration & Enrichment
We built a data pipeline to ingest information from multiple sources: historical sales data, real-time point-of-sale (POS) data from retail partners, marketing calendars, and even external factors like weather patterns and local events. This created a rich, unified dataset for analysis.
Custom AI Forecasting Engine
Our data scientists developed a suite of machine learning models (including ARIMA and Gradient Boosting) tailored to Fresh Sips' product portfolio. The AI engine could predict demand at the SKU and distribution center level, automatically learning from new data to improve its accuracy over time.
Intuitive Planner Dashboard
We created a web-based dashboard that provided the supply chain planning team with clear, visual forecasts. The interface allowed planners to review AI-generated predictions, simulate the impact of different promotional scenarios, and adjust orders with confidence.
Data Analysis Chart
The chart below demonstrates the reduction in forecast error (Mean Absolute Percentage Error - MAPE) month-over-month as the AI model was trained and deployed, compared to the previous legacy system's static error rate.
Chart Caption: Forecast Error (MAPE %) - Legacy vs. AI System.
The Results
The AI-powered demand forecasting engine delivered a significant ROI by optimizing the entire supply chain, from production to the retail shelf.
25% Increase in Forecast Accuracy: The AI models consistently outperformed legacy methods, enabling more precise inventory planning.
15% Reduction in Inventory Costs: Improved accuracy meant less capital tied up in excess inventory and reduced warehousing costs.
10% Decrease in Stockouts: By better predicting demand for popular items, the company improved on-shelf availability, capturing previously lost sales.
Customer Reviews of the Case
Medha Soft transformed our supply chain from a reactive cost center to a proactive strategic advantage. Their AI engine gives us a level of foresight we never thought possible. We are now making inventory decisions with data, not guesswork.
Laura Williams
VP of Supply Chain, Fresh Sips Co.
Let's Collaborate with Us!
1234 Lake Pointe Parkway
Suite 123, Sugarland, Texas 77478
Email Us
contact@medhasoft.com