Revolutionizing Product Management
Terex Corporation is a manufacturer of heavy equipment across a number of industries and a wide variety of products. With customers in over 170 countries around the world, Terex maintains relationships with its customers and dealers to supply factory approved replacement and add-on parts. Selling these parts online and through a network of dealers, Terex needed to be able to see across three different sources of parts data including online parts orders, dealer sales, and equipment sales. Without seeing how parts sell together across each of these channels, Terex product managers wouldn’t know what products to cut, what products to bundle together, and which products could be suitable replacements for equipment configurations or upselling opportunities.
Using EmcienPatterns the Terex team was able to analyze data across all three channels automatically. The analysis revealed the products that sell well together, but also identifies the products that are ideally suited for kitting three, four, or even more items together. Many of the connections between products were so strong that they are rarely, if ever, sold separately. Other item groups are so highly connected that bundling those items would affect only an insignificant number of purchases. Implementing these product changes gave Terex the ability to increase the average number of items per purchase by 5.6%.
The analysis also revealed opportunities to reduce items that were selling poorly across all three channels. Without the ability to analyze sales across their enterprise, the product managers couldn’t see if cutting an item would do to sales of other products. Cutting these costly items saved an immediate $2.1 million in inventory costs without affecting the sales of any other parts or equipment. Overall, automating a complete data factory brought a first year net benefit of $4–5.8 million and continued to increase revenues year over year.
5.6% increase in average basket size.
Single year reduction of over $2.1 million in inventory costs.
Net benefit of $4–5.8 million.
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