The Problem

What is the problem that NextOrbit solves?

NextOrbit addresses the problem of Out-of-Stock at retail stores.

How big a problem is Out-of-Stock?

Out-of-Stock can cost retailers from 2 to 15% of their sales (the average is 9% loss). Other repercussions are reduced customer experience, branding and loyalty.

Why has Out-of-Stock not been solved adequately till date?

Because retailers (and technology providers) have not focused on the store and on the last mile – the journey from the warehouse to the Store.

Retailers have been busy stocking the warehouse, improving warehouse SLAs and throughput, presuming that a stocked- up warehouse will also lead to a well-stocked store, an assumption that has proved to be incorrect.

What are the root causes of Out-of-Stock?

  • Imprecise store ordering/allocation and forecasting
  • Imprecise and untimely shelf replenishment
  • Upstream causes (e.g. Distribution Centre (DC) or warehouse Out-of-Stock)

How much money and customer loyalty have we lost due to Out-of-Stock? Can you help us answer that first before we talk of mitigating it?

Yes, NextOrbit performs Out-of-Stock Health Check. We help answer, at a store and SKU level:

  • How much demand you have missed – numbers and $/€/£
  • How many times have you gone Out-of-Stock
  • For how long you have gone Out-of-Stock
  • Correlation and root cause analysis
The Solution

How does NextOrbit enhance customer experience?

By enhancing shelf availability of products. Making them available when the shopper needs them. Catering to the moment of truth.

Research shows that shelf availability is one of the top three reasons shoppers visit a retailer. Consecutive Out-of-Stock is likely to drive the shopper permanently to another store.

How does NextOrbit optimize store inventory?

NextOrbit optimizes inventory by ensuring that store shelves have the “right” inventory on a continuous basis.

NextOrbit’s fine grained predictions and store ordering ensures that just the right amount of inventory is carried by a store to maintain high shelf availability.

How does NextOrbit mitigate Out-of-Stock?

By enabling data sciences driven store ordering and shelf replenishment alerts.

NextOrbit uses POS data along with relevant retailer and context data to model Out-of-Stock at a store and SKU level. The outputs are specific and granular alerts –“you are going Out-of-Stock on Diet Coke 6 Pack tomorrow at 10 AM by 29 numbers”.

These Out-of-Stock alerts are funnelled into the store ordering system of the retailer on a regular basis.

How do we know that Out-of-Stock has been mitigated?

When Out-of-Stock metrics come down and sales goes up, you know that Out-of-Stock has been mitigated.

What data does NextOrbit need from the Retailer?

Primary data needed:

  • POS data
  • Store Orders
  • Store Receipts (aka Distribution Centre (DC) to store shipments)
  • Stock at a point in time

Secondary data preferred:

  • Promotions

How does the Retailer provide input data to NextOrbit?

Upload as .xlsx (spreadsheet file) or .CSV (Comma Separated Values) file onto our platform

Apart from data the retailer provides, what other data does NextOrbit use?

NextOrbit syndicates, subscribes or otherwise obtains additional data that enhances predictive accuracy. The data types include:

  • Weather
  • Holidays and local events
  • Demographics
  • Social feed
The Benefits

Who benefits from mitigating Out-of-Stock ?

  • Customers
  • Retailers
  • CP brands
  • Intermediaries

What are the benefits of NextOrbit ?

  • Higher sales (between 2-15% improvement)
  • Optimize inventory
  • Enhanced customer experience
Context and Applicability

Why NextOrbit?

We are the World #1 in predicting and mitigating Out-of-Stock. This is our only business and we do it better than anyone. Improvements in business KPIs is assured when you engaged with NextOrbit.

I have already implemented a supply chain solution. Would I still benefit from NextOrbit?

Absolutely. While most supply chain solutions focus on distribution centre (DC) product availability, very little attention is given to the journey from the DC to the store.

I do not have a CAO (Computer Assisted Ordering) system. Our store orders are generated manually by store personnel after inspection of shelves. Can we benefit from NextOrbit?

Absolutely.

NextOrbit generates store orders using predictive analytics. These are reviewed, if necessary overridden, and approved by store staff for further action.

I have already implemented a CAO (Computer Assisted Ordering). Would I still benefit from NextOrbit?

Yes. NextOrbit sits on top of your existing systems and enhances their effectiveness.

I do not have a PI (Perpetual Inventory ) system in place. Is PI a pre-requisite for benefiting from NextOrbit?

No.

It can be expensive, time consuming and involves extensive change management to implement PI. NextOrbit does not require a PI as a pre-requisite for implementation. NextOrbit obviates the need for PI by:

  • Generating  PI internally by using periodic physical stock take information, POS, store receipts and shrink data.
  • Using algorithms to correct inaccuracies in the internal PI.

How does NextOrbit compare with a CAO?

NextOrbit has goals much beyond CAO.

NextOrbit is CAO++.

Can NextOrbit warn me in real time that we are running out of a particular set of items?

Yes,

POS streaming data is subjected to continuous analytics and alerts are generated warning the store staff of exception conditions.

What is it that NextOrbit does NOT do?

We are not a system of record. We focus on algorithms and not on transaction automation.

Does NextOrbit help with DSD (Direct Store Delivery) items and with VMI (Vendor Managed Inventory)/Scan Based traded items ?

Absolutely, the CP brand will likely benefit more than the retailer from Out-of-Stock reduction, and hence it is recommended that we work closely with them.

Technology Architecture and Security

How does NextOrbit ensure safety and security of client confidential data?

Whatever you would do to your traditional infrastructure, you would do to your cloud databases and servers:

  • Encryption at rest
  • Encryption in motion
  • Access for authorized individuals only
  • Maintenance of Audit trail
  • User level authorization – each user only sees data relevant to her area of work
  • Back-ups across availability zones
  • Mirrors across availability zones

Why Cloud? What are the benefits of a Cloud based platform?

Significantly lower costs. Significantly higher functionality. Better adaptability.The Amazon infrastructure hosts some of the world’s most sensitive data; high performance and high availability websites. Work done by Yahoo and Google and Amazon can be leveraged.

Out of the box availability of features like fault tolerance, high availability, scalability, security. Automated back-ups and operations ensure far lower operating costs that are passed on to you as a customer.

What about updating and improvement of these algorithms over time and with changing data?

We have designed NextOrbit as a platform for continuous improvement. NextOrbit systems perform better because they “learn” from decisions (and decision variances).   Error from previous decisions are feedback into the algorithms, and this effects self-correction, much like you riding a two-wheeler. “Continuous feedback loop” algorithms lend themselves well to learning and continuous improvement.

Change Management

What changes do I need to make to my systems and business processes to leverage NextOrbit ?

NextOrbit is a non-intrusive platform. It sits alongside your existing systems and processes and makes them better. Specifically the following is needed:

  • IT Systems need to create daily and weekly feeds necessary for NextOrbit
  • The store ordering system needs to accept out-of-stock alerts from NextOrbit as store order adjustments.
Get Started

How do we begin implementing NextOrbit in our environment?

Identify a category/subcategory at a store where you believe there is highest OOS/ highest opportunity. NextOrbit suggests one store location and a set of of 100 related SKUs to start implementation.

Why begin with a selected subcategory and stores?

Every SKU has a story. Once the story of the SKU is understood (its predictors, conditions that impact sales), it can then be scaled across the Retail chain.

What are the steps in an engagement?

  • Data readiness
  • Out-of-Stock Health Check
  • Configuring NextOrbit algorithms
  • Control run
  • Go live

What are typical timelines for each stage of the engagement?

  • Data readiness – your IT decides
  • Out-of-Stock Health Check – 4 weeks
  • Configuring NextOrbit algorithms – 6 weeks
  • Control run – varies, typically 4 weeks.
  • Go live – continuous

The actual timelines may be different depending on each retailer’s specific situation.

Our Pricing

What is the platform pricing of NextOrbit?

A monthly subscription based on the number of stores and number of SKUs. The cloud model of NextOrbit enables the Retailer to start small (say one subcategory and a few stores) and enhance scope as results speak for themselves.   No heavy upfront investment.

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