We introduce “Gen2”, our next generation of probabilistic modeling technology

Gen2 harnesses daily demand and supply signals and substantially advances Gen1’s probabilistic forecasting methods. Now probabilistic forecasting accounts for not only trends but also daily, weekly, monthly, and quarterly seasonality. Instead of running a “hold out” tournament, forecasts are based on probability distributions of each future period. This enables more accurate estimates of mean demand and more realistic assessments of forecast uncertainty (since there are no assumptions about “bell-shaped curves”). Fewer historical data points are required making Gen2 very effective with new product forecasts and when older data is no longer relevant. Accurate forecasts of daily and weekly demand can be generated with as little as 45-60 days of demand history. Finally, the approach, while powerful, is quite easy to understand and thus easier to apply at scale to support business planning. The question “How many forecasting methods do you use?” may now be answered as “one” for customers leveraging Gen2.

Gen2 Technology Inventory and demand planning

Gen2 substantially expands the capabilities of Gen1.

Smart IP&O Gen2 exploits daily data

1 Gen2 is easy to understand and data-light

Gen2 is easy to understand, data-light, and more accessible

8 Gen2 Inventory Optimization automatically integrates forecasts

Gen2 Inventory Optimization automatically integrates forecasts from Gen2 Forecasting

Gen 2 Inventory Optimization fully exploits simulation

Gen2 Inventory Optimization accounts for supplier uncertainty

5 Gen2 Forecasting Software provides better estimates of forecast uncertainty

Gen2 Forecasting provides better estimates of forecast uncertainty

2 Gen2 Forecasting exploits near-term course corrections

Gen2 Forecasting exploits daily data to guide near-term course corrections

4 Gen2 forecasting software handles more complex seasonality

Gen2 Forecasting handles more complex seasonality

Gen2 Inventory Optimization outputs more key performance indicators

3 Gen2 forecasting software facilitates new product forecasting

Gen2 Forecasting facilitates new product forecasting

6 Gen2 Machine Learning automatically uses only relevant recent data

Gen2’s Machine Learning automatically uses only relevant recent data

Gen2 Inventory Optimization models several inventory policies

Gen2 comprises a bundle of applications

The Smart Solution

One of the most significant challenges now facing demand forecasters is the increasing pace of business. In the past, forecasting processes ran at a monthly tempo, and rare was the company that even accelerated to a weekly tempo. SDP Gen1 was fed by Smart Data Pipeline, which took the most microscopic data -transactions such as individual orders and shipments- and aggregated them to daily totals. However, the classical time series forecasting algorithms in Gen1 for non-intermittent demand were best suited to working at a higher level of aggregation, so Gen1 was sufficient for the monthly or maybe weekly processes of our customers. The specialized algorithm in Gen1 for forecasting intermittent demand was an exception since it could work at any level of disaggregation. However, customers were not inclined to forecast some items daily and others monthly, so most customers defaulted to monthly data.

Now, though, the speed of business has combined with SKU proliferation to thin out demand streams, giving more items’ demand an intermittent character. As a result, Gen2 does all its calculations on daily data. If customers choose to operate at a slower tempo, daily results can easily be aggregated to weekly, monthly, quarterly or annual levels. It is easy to aggregate forecasts.

The Benefits

Companies using our powerful planning solutions typically reduce standing inventory by 20% in the first year, increase parts availability 10-20%, and reduce the need for and associated costs of emergency transshipment to close gaps in their supply chain. Repair and service parts inventories are truly optimized, leading to more efficient operations, improvements in customer service, and significantly less cash tied up in inventory.

White Paper: Smart Software Gen2

In this white paper, we introduce “Gen2”, our next generation of probabilistic modeling technology that powers the Smart IP&O Platform. We recount the evolution of Smart Software’s forecasting methods and we detail how Gen2 substantially expands the capabilities that have made Gen1 so useful to so many companies. Finally, we will also give a high-level view of the probability math behind Gen2 .

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A Single Platform for Inventory Planning & Optimization

Ipad with business data of improved Demand & Inventory Planning 2

Gen2 Smart IP&O Application Suite

Gen2 substantially expands the capabilities of Gen1. Smart IP&O is an integrated set of native web applications that provides a single, easy to use, scalable, environment with field proven inventory and forecast modeling that optimizes inventory stocking policy and improves forecast accuracy. Gen2 harnesses daily demand and substantially advances Gen1’s probabilistic forecasting methods.

You’ll move planning from spreadsheet based functional silos to a collaborative platform enabling executives to shape policy while empowering inventory planners to make it so .