April 11, 2022
Since COVID-19 hit two years ago, we have seemingly moved from one supply chain issue to another. First it was toilet paper and cleaning supplies flying off the shelves, then it was the shortage of anything microchipped. The shortage of the day: baby formula. Today, a Georgian company called Thrive Technologies is using machine learning technology to help retailers stay on top of supply chain disruptions.
Prosperous Technologies has been developing inventory planning solutions since its inception in 2001 by CEO Rick Morris. The company says it picks up inventory slack where ERP solutions typically stop. Armed with data from the ERP system, such as SKU numbers, item descriptions, and unit attributes such as cost, price, and weight, Thrive’s solutions are able to gain insight into the supply and demand for individual SKUs at the location level.
Its latest solution, dubbed Enlighten, was launched in February with the aim of giving retailers greater insight into their operations. The cloud-based offering uses machine learning techniques to identify specific causes of inventory issues buried among millions of lines of data in customer systems. Specifically, Enlighten looks for the causes of lost sales and “dead inventory,” which customers can then repair.
“There are two main inventory issues that every distributor wants to solve, but until now they haven’t had a good understanding of the underlying causes: lost sales due to out-of-stock product and inventory that’s not selling,” Morris said. in a press release. “Enlighten helps distributors uncover the root causes of lost sales and dead inventory, so they can take action and recoup the profits they’ve lost due to these complex inventory issues.”
The typical distributor loses 5-10% of their annual revenue because they don’t have the right product in the right place when the customer wants to buy it, says Thrive. “For a $100 million distributor, that means lost revenue of $5 million to $10 million a year,” he says.
Additionally, distributors typically don’t sell 7-20% of their stock, depending on the company. When distributors have to liquidate this dead stock, they lose millions more. According to Thrive, Enlighten helps shine a light on the underlying causes of lost sales and dead inventory, increasing sales by 5% and preventing up to 90% of dead inventory.
Running AWS, Enlighten provides users with dashboards where they can explore their inventory and explore specific products to determine if there are any sales or stocking irregularities. The causes of specific out-of-stock and dead-stock situations vary, so some exploration is usually required, Morris says.
“Distributors in this COVID-disrupted supply chain environment are experiencing stock-outs due to suppliers taking longer with deliveries or having limited supply,” says Morris. “However, another cause of their stock-outs could actually be buyers waiting for the suggested order to be at or above the supplier’s minimum for free freight. Enlighten can help identify the real cause of stock-outs, allowing distributors to focus on the real problem and make more informed decisions.
Like all Thrive offerings, Enlighten integrates with ERP software running on IBM i and other platforms. The company says it has experience with vendor-based ERP systems, such as JD Edwards, as well as in-house developed systems. For more information, see the provider’s website at www.thrivetech.com.
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