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This major North American consumer packaged goods manufacturer sought to optimize product allocation and evaluation as well as maximize the potential for capturing demand transfer across products.
Recognizing that its retail product planning hierarchy was restricting optimal product allocation and evaluation, the company identified the need to align its planning structure more closely with consumer purchasing behaviors and preferences.
The scope of this project encompassed eight major product categories and approximately $2 billion in sales across North America. Using Accenture’s Performance Optimizer software, which provides analytics-driven retail channel optimization, the combined project team was able to attribute importance to determine customer preferences. This identified the optimal size of each category planning structure, providing a ranked list of SKUs in order of deletion priority for each category.
The analysis showed that the CPG manufacturer could actually reduce its portfolio size by more than 15 percent while expecting to maintain its current level of sales. The company anticipates a positive earnings before income tax impact of $16 million over two years and an $8 million inventory improvement return from a portfolio reduction.
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