Head of Supply Chain, Mahindra & Mahindra
Data to Decisions
The 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.
The 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.
To 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.
Wanting 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:
- Using manual Excel spreadsheets to create demand and supply plans was inadequate due to the complexity and scale of business.
- To gain greater agility and responsiveness to ensure the availability of spares for different demand patterns of after-market needs
- Using a simple fulfillment strategy for the entire geography
- Product and customer segment attributes and individual boundaries were manually defined resulting in twelve distinct demand clusters to manage
- There was opportunity to improve alignment between segment strategy and demand patterns
Looking 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.
Before, 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:
- Add new dimensions that were missing to the segmentation, including average quantity per order
- Quickly adjust for greater flexibility to rapidly changing demand characteristics
- Improve consistency of the clustering process through the power of MLbased automation
- Enhance the allocation of service levels to different clusters
- Configuring all aspects of the supply chain to align with the unique requirements of the demand clusters
Mahindra 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.
The 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.
Leveraging Blue Yonder for overall segmentation, Mahindra & Mahindra saw:
- 6% Reduction of Inventory Value
- 4% Reduction of Inventory Quantity
Leveraging Blue Yonder for location-based segmentation, Mahindra & Mahindra saw:
- Overall 10% Reduction in Inventory Quantity
- Overall 6% Reduction of Inventory Value
Part 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.
Manufacturing 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.
Where 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.
Blue 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.
Luminate 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.
About Mahindra & Mahindra
The Mahindra Group is a USD 20.7 billion federation of companies that enables people to rise through innovative mobility solutions, driving rural prosperity, enhancing urban living, nurturing new businesses and fostering communities. It is a global leader in utility vehicles, IT, financial services and vacation ownership in India and is the world’s largest tractor company, by volume.