Documente Academic
Documente Profesional
Documente Cultură
February 2017
With the abundance of data now available in the information era, data science offers significant
At a Glance . . . opportunities to complement quality approaches to problem solving and continuous improvement.
Unfortunately, as Roger D. Peng and Elizabeth Matsui point out in their book, The Art of Data
The short shelf lives of fresh Science, Data analysis is hard, and part of the problem is that few people can explain how to do
foods along with fluctuating it.1 Quality professionals may find that applying the principles of data science is not always as
consumer demand meant
straightforward and formulaic as they would like.
that a European retail
chains stores often had to
hold clearance sales with In illustrating how explorative data analysis and basic statistics helped a grocery chain reduce
zero or negative margins inefficiencies in its retail inventory and ordering process, this case study presents a real-world
or write off inventory. example of how the thought processes of data scientists can contribute to quality practice. Once
Explorative data analysis the chain saw the difference that the data-based approach made in targeting waste and ineffi-
and basic statistics helped ciency in one store, it successfully replicated its process improvements to increase profitability
the chain identify and throughout the organization. The project approach and lessons learned can also be applied in other
reduce inefficiencies in its
inventory and ordering
retailsettings.
process, minimizing the
gap between quantities sold A data science approach to assessing the problem
and quantities ordered.
Rainbow statistical process The short shelf lives of fresh foods along with fluctuating consumer demand had been causing a
control (SPC) charts, a European retail chains stores to hold clearance sales with zero or negative margin or to write off
variation on traditional some inventory as shrinkage. Annually, the problem of shrinkage accounted for revenue losses of
SPC, helped ensure
up to 20percent.
ongoing monitoring of
the stock-to-sales ratio
Although the ordering process was automated, the algorithm was better suited to articles with lon-
and triggered corrective
action in real time, ger shelf life (>90 days); hence, department managers would often overwrite the automatic system
bringing sustainable results and place orders manually. There were thousands of stock keeping units (SKUs) and no defined
within three months. tolerance limits to manage stock and shrinkage across various stores. The organization needed an
approach for monitoring and controlling this waste.
Granular data is key to accurate and productive problem assessment. When it is not available,
significant time goes into defining metrics and capturing measurements before analysis can begin.
With the prevalence of sophisticated database management systems, the trick becomes extract-
ing information based on the questions that need to be answered to gain a better understanding of
anyproblem.
For the problem of shrinkage, using data science and lean Six Sigma started with two questions:
Figure 1: H
istogram of quantity sold and frequency Figure 2: H
istogram of quantity ordered and frequency
ofoccurrence of occurrence
60 51
56 50
50
50
40
40 36
40
Frequency
Frequency
31 30
30
21
21 20
20
11
10 10
10 8 7
6 5
2 3 2 3
1 1 0 0 0 0 1 1 0 0 0 0 1 0 0 0 0 0
0 0
80 160 240 320 400 480 560 0 75 150 225 300 375 450
Quantity sold Quantity ordered
SKU and iterates the gaps in quantity of Tuesday 28 7,099 254 32 5,941 186
goods sold and goods received/ordered. Wednesday 16 4,776 298 32 5,731 179
349.4
250
0
on quantities demanded to ascertain
that there are no instances of lost sales. 0 100 200 300 400 500 600
Comparing the quantities ordered Data
Purpose of data collection Monitoring ordering process to improve performance Station number/department EBITDA Solutions/Country divisional manager
Target 3 stock/sales Upper specification limit 9.5 stock/sales Lower specification limit -3.5 stock/sales
20 4.4912
10 3.9941
3.4971
0 3.0000
-10 2.5030
-20 2.0058
1.5088
-30
GO 1.0113
-40 0.5147
-50 0.0177
-0.4794
-60
-0.9765
Get first and -70 -1.4735
second level -80 CAUTION -1.9706
involved at yellow -90 -2.4676
and orange -2.9647
-100 -3.4618
Get CEO involved
when red -110 -3.9588
-120 STOP -4.4559
-4.9529
-130
-5.4500
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