How we supported a Swedish mining manufacturer understand the effect of relevant macroeconomic factors on their business and plan their resources well ahead of time and in an efficient way
85% ACCURATE
IMPACT PREDICTION
OPTIMISED RESOURCE PLANNING
AND REDUCED WASTE
TIMELY SIGNALS ON
MARKET TREND DEVIATIONS
THE SITUATION
Our Swedish mining manufacturing customer struggled to keep up with the constantly evolving demands and conditions of today’s market, investing many resources and leading to missed opportunities, too much or little inventory, decreased productivity, and reduced revenue.
They came to Amplify Analytix with the request to understand the impact of external macroeconomic factors on their business, so they could better optimise their resource planning and improve their efficiency.
We proposed to implement our forecasting tool that not only has the functionality to perform forecasting using available internal data but also to incorporate the impact of external factors.
THE SOLUTION
In step one, our team performed research to produce the right set of external macroeconomic factors relevant to the customer’s business. We considered as factors the price of commodities like gold, iron & other metals, unemployment rate, manufacturing PMI, customer confidence, price of crude oil, etc. Connectors provisioned within the tool enable easy connection to external sources to pull this kind of data.
Our forecasting solution undergoes continuous improvement with periodic model tuning and revision which allows business review and operational enhancement. It also enables the incorporation of additional relevant data sources.
Technical solution: Multiple model algorithms are available in the tool to be selected to run on the selected variables for optimal customization
BUSINESS IMPACT
Utilising internal as well as select external factors, we were able to predict with an accuracy of 85% the lagged impact of the price of commodity on the customer’s sales. This helped our client keep an eye on the changing market landscape: whenever there is a change in any of the impacting factors, they knew to expect a change in their internal growth metrics. Moreover, we were able to quantify how much a unit change in each external factor would impact the sales.
This enhanced their business ability to gain а strategic overview of how their internal operations, budget, and inventory must adapt to optimise their resources in the most efficient way, reducing waste and the cost to serve.
