Business
Challenge:

  • Client is one of the largest retail and distribution giants in GCC having outlets across multiple geographies.
  • The client maintains an extensive product portfolio sourced from various countries, requiring frequent international travel for procurement purposes.

Problem Statement

  • The client relied on a labour-intensive method to create budgets for around 80+ separate international purchasing trips each year, examining nearly 200 distinct categories within each budget.
  • The client required a Budget Planning Model designed for precise budget estimation at the category level, aiming to enhance accuracy and mitigate challenges commonly faced during the budgeting process, ultimately reducing manual labour efforts.

Objective

  • Create a model that employs data-driven scientific methodologies to tackle challenges encountered by the client when estimating budgets for each trip, such as demand forecasting, determining country diversity shares, special budget etc. at a detailed category level.
  • The model should be largely automated to reduce labour-intensive tasks, while allowing flexibility to adjust values within a specified range for budget estimation equation variables. This enables users to apply their expertise based on experience, in conjunction with insights from the data-driven system.
  • The model template should streamline budget preparation and summarization across different category levels, and it should also simplify the approval process.

TurnB Approach


Process Assessment:

  • Explored the existing process for procurement budget creation, understood its manual dependencies, time-intensive nature, and identified the scope for improvement.
  • Scheduled meetings with stakeholders to gain deeper insights into their challenges and concerns.

Building Supporting tools for the Template:

  • Framework was set up to estimate the Budget for upcoming Overseas Purchase visits, which utilizes historical data and scientific approach to calculate anticipated demand.
  • Developed a Power BI Dashboard showcasing category level insights and metrics complimenting budget estimation of the category; like deep view to current stock, stock in transit, performance of products at country level, at price bracket level, Inventory turnover ratio, margin particulars etc.

Template Creation:

  • Developed an Excel template designed for pre-trip budget estimation, seamlessly integrating with the client's ERP file for data collection, and Category Insights dashboard in Power BI was embedded in the template for easy reference. This dashboard complements users with the necessary supporting data needed for category-level budget estimation.
  • The template was equipped with various features including automation capabilities that automates budget preparation and summarization across various category levels.
  • The template provides users with the flexibility to modify factor variables in the budget estimation equation, allowing them to tailor the budget according to their specific needs.
  • Freight charges for each country were considered based on historical data to determine the actual spendable amount from the total budget allocated for purchases.

Associated discussions:

  • Held walkthrough sessions with stakeholders to educate and train them on the effective using of the template
Approaches background
Infograph

Implications

  • The template provided a systematic data driven approach for overseas buyers for allocating budget shares to travelling countries, resulting in reduced overspending, and mitigating overstocking and understocking issues.

The template enhanced the Overseas Purchase Budget preparation process by minimizing manual dependence, resulting in a remarkable 75% reduction in budget preparation time.

  • The template standardizes the process of budget estimation, encompassing all necessary information for stakeholders at various levels, ranging from the buyer level to business leaders.
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