SKU Rationalization

Reduce business complexity with minimal impact to Revenues, Profitability and Customer Satisfaction
A non-traditional approach to SKU rationalization was undertaken. Rather than a Product-centric view and seeing which SKUs were contributing marginally to overall revenues and profits, a Customer-centric view was implemented. This framework reduced business complexity, while maintaining Customer Satisfaction. Approximately 30% of SKUs were rationalized with minimal impact to revenues, profitability & Customer retention.

Client : A leading B2B Retailer of Personalized Gift Products

Business had over 5000 SKUs across a few unique Product Platforms. Each platform had SKUs across many style groups and colors. Style groups and colors were investigated for marginal contributions to Revenues. It was found that only a few key style groups and colors accounted for over 90% of revenues

Further, it was found that key style groups and colors remained consistent year-on-year And that Customer repurchases on deleted style groups and colors were not significantly impacted the following year Recommendations made to rationalize marginal style groups and colors, leading to approximately 30% SKU reduction and significant cost savings in business complexity and working capital.
100% 30% Blue

Reactivation Continued SKUs

30% 30% 31%

Reactivation Discontinued SKUs

80%

Customer 49% Segment1 44% Customer 57% Segment2 64% Customer 36% Segment3 34% Customer 15% Segment4 13%
0% 10% 20% 30% 40% 50% 60% 70%

60%

26%

25%

26%

28% Gunmetal

40%

10% 11%

11% 11% 10% 5%

11% 11% 8% 5%

12% Red 10% Black 6% Burgundy 5% Green

20%

11% 5%

0% 2008-09 2009-10 2010-11

Rest
2011-12

Y O U R PA R T N E R F O R D ATA A N A LY T I C S S E R V I C E S
ADVANCED ANALYTICAL SOLUTIONS
Industry
Consumer Finance Credit Cards Loans and Mortgages Retail Banking Insurance Wealth Management Consumer Goods and Retail CPG Retail Consumer Durables Manufacturing and Supply Chain High Tech OEMs Automotive Logistics & Distribution

Business Focus
Investment Optimization Revenue Maximization Cost and Process Efficiencies Forecasting Predictive Modeling Risk Management Pricing Optimization Customer Segmentation Supply Chain Management

Tools and Techniques

SAS, SPSS, R, VBA Cluster analysis Factor analysis Conjoint analysis Perceptual maps Neural Networks Chaid / CART Genetic Algorithms Support Vector Machines Sentiment Analysis

MANAGEMENT TEAM
Roy K. Cherian CEO Roy has over 20 years of rich experience in marketing, advertising and media in organizations like Nestle India, United Breweries, FCB and Feedback Ventures. He holds an MBA from IIM Ahmedabad.

GLOBAL EXPERIENCE PROVEN RESULTS

Anunay Gupta, PhD COO & Head of Analytics Anunay has over 15 years of experience, with a significant portion focused on Analytics in Consumer Finance. In his last assignment at Citigroup, he was responsible for all Decision Management functions for the US Cards portfolio of Citigroup, covering approx $150B in assets. Anunay holds an MBA in Finance from NYU Stern School of Business. Buck Chintamani EVP, Strategic Initiatives & Business Development Buck has extensive experience working with global clients across sectors. He was an early employee at Infosys, a founding team member at supplychain software startup - Yantra, and part of the management team at RFID sector startup - Reva. Most recently, he was the Vice-President for Service Partner Strategy and Programs at product lifecycle management software company, PTC. Buck has an MBA from IIM Ahmedabad. Kakul Paul Business Head, CPG Kakul has over 6 years of experience within the CPG industry. She was previously part of the Analytics practice as WNS, leading analytic initiatives for top Fortune 50 clients globally. She has extensive experience in what drives Consumer purchase behavior, market mix modeling, pricing & promotion analytics, etc. Kakul has an MBA from IIM Ahmedabad.