Maximize profit. Improve customer experience.
At 4R Systems, we look at retail inventory management differently. Replenishment, seasonal allocation, assortment and buying decisions are all designed to achieve maximized profits.
We use advanced analytics based on statistical and machine learning techniques developed from profit optimization algorithms.
Profit Optimization Solutions
Our solutions take full advantage of advanced analytics, which leverage these improved predictions and promise to deliver a profit optimal improvement across your supply chain and merchandising decisions.
The Power of the Cloud
All our solutions are delivered to you via the Cloud. That allows a low risk, quick implementation – no need to purchase software, hardware or training. All you do is set up data exchanges and use our web portal.
Profit Optimization: The Bottom Line
Traditional approaches to omni retail inventory management rely on substantial input from the user to control the process.
A guiding principle of our approach, on the other hand, is to reduce or eliminate the need for any judgment input, and provide answers that maximize profitability. The result is greater profits with less work.
Statistical and Machine Learning Techniques
Our Forecasting Solution enables retailers to identify pure demand with our proprietary approach to demand decomposition and lost sales estimation that is totally integrated with all 4R advanced optimization solutions.
Our solution provides sophisticated machine learning and prescriptive analytics that incorporates the effect of promotions, seasonality, pricing to determine ‘pure’ demand. Further, it blends influences from multiple selling points including store, online and catalog as examples.
Each of our optimization solutions applies these elements to a forecasting algorithm tailored to the particular retail challenge it addresses—replenishment, seasonal allocation, season buy or early-life planning.
Using Advanced Analytics to Maximize Retail Profit
In retail inventory management, the most important use of predictive analytics is in demand forecasting. Traditional forecasting uses some variation of time-series analysis, in which past demand is used to predict future demand. Advanced forecasting uses machine learning (ML) techniques to mine the available data for additional information. That data is then used to adjust for factors not obvious from the demand data alone. Machine learning eliminates the need for merchants to suggest potential predictors in order to guide the forecasting process; the algorithms let the data speak for itself to find the elements that matter, and how much they matter, at a very granular level.
Predictive analytics is making inroads in the retail world and starting to produce real results, but a better forecast isn’t the endgame: you still have to figure out how to use it to achieve the ultimate goal of higher profits.
Multi-Echelon, Omni Retail & Profit-Optimized
We offer replenishment solutions for online, stores and DCs. When used together, they form a powerful multi-echelon, omni retail, profit optimized solution that makes sure you have the right balance of inventory in the right place. The solutions area highly scalable; we deliver hundreds of millions of reorderpoints to our clients every week.
Our Omni Replenishment solution offers automatically determines the level of inventory that will maximize your profitability. This qualitatively different approach automatically targets the answer that maximizes profits while freeing up resources to focus on more strategic activities. Our solution also includes full support for a variety of promotional requirements.
Our DC Replenishment solution leverages the information generated by Omni Replenishment to form a truly optimized multi-echelon replenishment solution. In addition to supplying DC reorderpoints, it produces vendor order forecasts that can be shared with vendors to improve fulfillment rates and reduce lead times.
Replenishment for your direct marketing channels (online, catalog, wholesale) can be handled as part of either store replenishment or DC replenishment, depending on your inventory holding requirements. Our solution supports every variation of fulfillment, from order-online, pickup in-store to order-in-store, ship-to-home.
Seasonal Inventory Management
Buying, Allocation, and Markdown
Seasonal Product Inventory Management: Buying, Allocation, and Markdown
Seasonal items face three major challenges: how much to buy, where to put it and how to get out of it profitably, at the end of the season.
Our Seasonal Buy Solution helps buyers determine the quantity they should purchase based on past seasonal buys, sell-through percentage, and forecast uncertainty, considering misallocations and markdowns to get a true read on demand.
Our Seasonal Allocation Solution then handles the distribution of inventory to stores as the season progresses, by calculating the location that would yield the highest profit from an additional unit of inventory based on the point in the season, the store’s current inventory position, and sales velocity. Planner can use the web interface to track the seasons progress and manage adjustments to seasonality profiles based on exception management alerts.
Our Markdown Solution identifies items that need a lift in sales, determines the optimal timing and depth of markdown to achieve it, and prioritizes the recommendations in terms of expected improvement in profitability.
Together these three solutions create a fully optimized and integrated systems for your seasonal goods.
Advanced Optimization Solutions
Assortment Optimization & Vendor Order Optimization
Maintaining an optimal item assortment shouldn’t be an occasional affair. Our Assortment Optimization Solution will constantly assess the strength of your offerings and alert you when it’s time for adjustments. Our full-cycle solution determines the most profitable assortments, helps you determine how many unique assortments to carry, projects the improvement you can expect once implemented, tracks the rollout of the new assortment and response on the observed benefits.
Our analytics optimize based on true demand, not simple sales history, and can identify winning products not in your current offering.
Our Vendor Order Optimization Solution leverages our replenishment solution to provide vendor purchase orders that account for order minimums, forward buy opportunities, container constraints and other factors. It produces daily vendor purchase orders based on multi-echelon re-order points and DC inventory position.
A comprehensive web interface enables you to maintain vendor, DC and SKU information, as well as manage open-to-buy and fill rate targets. At the same time it enables buyers to review and modify orders in response to changing situations and business constraints.