Analytics Magazine Analytics Magazine, November/December 2014 - Page 58

Cor porate Profi le The simulations showed the impact of new orders on the deliveries of existing orders. The tool, now regularly used by the factory managers, has boosted throughput while improving customer satisfaction. AOE consultants segmented the customers, defining 12 different behavioral patterns. By looking at customers over time, they also were able to determine that certain types of customers who started with one category of product were most likely to buy a predictable second category of product. AOE proposed that the retailer give customers coupons for specific product categories that they didn’t usually buy. By crafting attractive discounts for new purchases in “next best product” categories, they preserved margin on the products the customer was already buying and increased revenues on products the customer may not have bought otherwise. AOE managed the pilot program and demonstrated that margins were improved by 8 percent, resulting in an overall increase in profit. Custom-made tools for managing manufacturing operations. A semiconductor firm was unable to predict the impact of accepting new orders at a major fabrication plant. It was unclear whether filling a new order would cause bottlenecks at certain machines and delay shipments for other highpriority customers. AOE consultants developed a customized simulation tool for the plant that quickly ran through thousands of production simulations, including set-up times, run times, stochastic downtimes, even strategic options such as buying new machines. The simulations showed the impact of new orders on the deliveries of existing orders. The tool, now regularly used by the factory managers, has boosted throughput while improving customer satisfaction. 58 | a n a ly t i c s - m a g a z i n e . o r g w w w. i n f o r m s . o r g