Inventory Optimization Using Machine Learning for More Accurate Demand Forecasting

About Client

Founded in 1939 in Bombay, India, the client is a global leader in the Oleochemicals as well as the Personal Care product segments. Today, the client has three main business verticals- Contract Manufacturing, Consumer Products and Oleochemicals. The client has 16 operating centers which are spread across Asia, North America, Europe and Africa.

Background

As part of their digital transformation roadmap, the client aimed to strengthen their inventory optimization using machine learning to gain better visibility and control over their supply chain.

Across industries, machine learning-based demand forecasting is becoming the cornerstone of accurate business planning and improved ROI. By embedding predictive intelligence into inventory workflows, organizations can anticipate demand fluctuations and balance stock levels more effectively.

Challenge

The client’s existing demand forecasting process was inconsistent. The actual demand frequently diverged from forecasted demand—causing both overstocking and stockouts. These inefficiencies resulted in increased carrying costs, missed orders, and suboptimal warehouse utilization.

To fix this, the client sought a partner capable of leveraging inventory optimization machine learning models to predict demand more accurately and enable proactive inventory planning.

Our Solution

BizAcuity began with a discovery phase to assess data readiness and identify gaps in the existing forecasting model. The client’s available data showed limited seasonality and minimal trend patterns, making it difficult to capture demand fluctuations effectively.

To overcome this, BizAcuity:

  • Identified variables with the highest volume and consistency of historical data.
  • Developed a time series-based forecasting model trained on past performance data.
  • Tested the model for prediction accuracy and improvement potential. 

The initial model achieved a 60% accuracy rate—limited primarily due to insufficient seasonality patterns in the data. To enhance prediction strength, BizAcuity introduced rolling pipeline data (90-day, 60-day, 30-day, and same-month intervals) as an additional predictor variable.
This new approach combined internal data with external signals to strengthen the inventory prediction machine learning model.

A refined statistical model was then developed to incorporate both historical and pipeline variables. This hybrid model significantly boosted the reliability of the forecasts.

Outcome

The enhanced model achieved an 82.4% accuracy rate when tested with future predictor data.
As a result:

  • The gap between actual and forecasted demand reduced by 20%.
  • Inventory planning became more precise, minimizing both surplus and shortage scenarios.
  • The client gained a scalable foundation for demand forecasting and inventory optimization using machine learning, enabling smarter, data-driven decision-making across its global supply chain.

Key Results

  • 82.4% forecast accuracy with advanced statistical modeling
  • 20% reduction in forecast deviation
  • Improved inventory cost efficiency and availability
BizAcuity
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