Overview

pThe Mahindra Group is a 20B federation of companies with a strong presence in agribusiness, aerospace, commercial vehicles, components, defense, logistics, renewable energy, steel, and more. Headquartered in India, it employs over 2.4M people across 100 countries./p pThe Mahindra Mahindra Farm Equipment business is the world’s number one tractor company by volume, and its automotive business is a full-range player with a presence in almost every segment of the automobile industry. Part of these sectors is a special vertical known as Spares Business Unit (SBU) that provide genuine vehicle and tractor spares through capabilities in sourcing, assembling, warehousing and distribution./p

Supernova Award Category

Data to Decisions

The Problem

pTo increase supply chain efficiencies and maximize customer service, Mahindra Mahindra is constantly evaluating scientific methods to tweak demand forecasting, inventory management, and replenishment planning strategies for its spare parts to ensure that the right parts are available at the right place and time./p pWanting to provide greater product variety, higher service levels, and faster customer response times across its vast automotive and farm equipment spare parts portfolio, Mahindra Mahindra needed to enhance its traditional segmentation processes and tools that required continuous monitoring - leading to inefficient allocation of inventory and less than optimal service levels. The company faced the following business challenges:/p ul liUsing manual Excel spreadsheets to create demand and supply plans was inadequate due to the complexity and scale of business./li liTo gain greater agility and responsiveness to ensure the availability of spares for different demand patterns of after-market needs/li liUsing a simple fulfillment strategy for the entire geography/li liProduct and customer segment attributes and individual boundaries were manually defined resulting in twelve distinct demand clusters to manage/li liThere was opportunity to improve alignment between segment strategy and demand patterns/li /ul

The Solution

pLooking for a planning solution with the built-in visibility, intelligence, context and collaboration tools that would enable increased allocation efficiency for distribution resources, Mahindra Mahindra turned to Blue Yonder’s Demand Segmentation capabilities within its Luminate Planning portfolio. Mahindra Mahindra had achieved outstanding results over the past two years with Blue Yonder's suite of supply chain management products, including improved accuracy, inventory levels and fill rates, through the optimization of its segmentation and inventory stocks. Enhancing the partnership further, Mahindra Mahindra would leverage Blue Yonder’s Luminate Platform that applies machine learning (ML) algorithms to both systematically classify spare parts into unique demand clusters and establish significance of demand attributes./p

The results

pBefore, product and customer attributes and dimensions were manually defined, and data segments manually created. Now, Mahindra Mahindra leverages Luminate Platform’s Dynamic Segmentation to analyze data at scale and identify key factors that drive segmentation needs, while optimizing for the goals they specify. The Luminate Platform leverages real-time data and insights to compute the relative importance of all input features and uses that information to remove variables of low significance - establishing confident forecast clustering and profiling. Since implementing Blue Yonder’s dynamic segmentation for both overall and location-based segmentation, Mahindra Mahindra has been able to:/p ul liAdd new dimensions that were missing to the segmentation, including average quantity per order/li liQuickly adjust for greater flexibility to rapidly changing demand characteristics/li liImprove consistency of the clustering process through the power of MLbased automation/li liEnhance the allocation of service levels to different clusters/li liConfiguring all aspects of the supply chain to align with the unique requirements of the demand clusters/li /ul

Metrics

pMahindra has been able to simultaneously extract supply chain efficiencies and maximize customer service since expanding its partnership with Blue Yonder. Demand segmentation is now the cornerstone of Mahindra Mahindra spare parts strategy – integrating demand, inventory and replenishment strategies within a unified supply chain planning framework./p pThe company has scaled operations and become more customer centric by strategically and automatically grouping customers with similar fulfillment or procurement needs based on data changes, and then developing distinct supply chain operations to meet those specific requirements./p pLeveraging Blue Yonder for overall segmentation, Mahindra Mahindra saw:/p ul li6% Reduction of Inventory Value/li li4% Reduction of Inventory Quantity/li /ul pLeveraging Blue Yonder for location-based segmentation, Mahindra Mahindra saw:/p ul liOverall 10% Reduction in Inventory Quantity/li liOverall 6% Reduction of Inventory Value/li /ul

The Technology

pPart of the Luminate Planning Portfolio, Blue Yonder’s Dynamic Segmentation leverages ML to analyze data at scale and identify key factors that drive advanced segmentation. It develops distinct supply chain operations to meet specific market segments and balances cost-to-serve for each segment. Planners receive an intelligent segmentation solution that understands the reasons for delays and predicts arrival times, ensuring greater consistency and more time for strategic tasks./p

Disruptive Factor

pManufacturing and distribution companies face an increasing range of customer demands, with market dynamics changing faster than most organizations’ ability to adjust segments and execute. Mahindra Mahindra is maintaining an edge on the competition by dynamically segmenting their supply chain strategies and operations leveraging ML./p pWhere teams used to spend the majority of their time solving recurring problems as if they were new ones, Luminate Planning uses ML to track behavior to not only repeat proven resolution steps, but also make recommendations to improve efficiency. Additionally, where in the past teams spent weeks on segmentation exercises to distribute products by region based on a myriad of individual assumptions, today, this can be done in milliseconds./p pBlue Yonder’s dynamic segmentation has been a gamer changer for Mahindra Mahindra because it enables its planners to provide differentiated service levels based on customer value and business parameters, allowing the company to increase profitability amid an increasingly complex and more dynamic marketplace./p

Shining Moment

pLuminate Platform’s Dynamic Segmentation has allowed Mahindra Mahindra to analyze data at scale and identify key factors that drive segmentation needs, while optimizing for their goals. Now, the company can confidently forecast cluster and profile because Luminate Platform uses real-time data to compute the relative importance of all input features and remove variables of low significance./p