Advanced Ana­lyt­ics at The Dow Chem­i­cal Com­pa­ny con­tin­ue to focus on enhanc­ing busi­ness and func­tion­al mar­gins. Dow’s busi­ness and func­tion­al lead­er­ship teams use inter­nal SAP data through home grown report­ing sys­tems, dash­boards, spread­sheets which include cur­rent and his­tor­i­cal data sets to enable deci­sion mak­ing. While this has proven to be suf­fi­cient for cur­rent busi­ness needs, it does not allow for sig­nif­i­cant break­through mar­gin improve­ments. There­fore, Dow was chal­lenged to find ways to incor­po­rate for­ward look­ing ana­lyt­ics and opti­miza­tion rec­om­men­da­tions to enable over­all deci­sion making. 

At Dow, the focus of the Advanced Ana­lyt­ics team is to incor­po­rate unique ways to use advanced sta­tis­ti­cal and data meth­ods to pro­vide improved rec­om­men­da­tions that dri­ve mar­gin man­age­ment — includ­ing price, vol­ume, and cost. This team was able to devel­op mul­ti­ple cus­tomized solu­tions that deliv­er mar­gin enhance­ments through price posi­tion­ing and price leak­age rec­om­men­da­tions, increased sales vol­ume and rev­enue growth, and cost opti­miza­tion through var­i­ous ana­lyt­ic meth­ods and concepts. 

Some of the meth­ods used included:

• Cus­tomer and prod­uct segmentation
• Fore­cast­ing
• Elas­tic­i­ty and opti­miza­tion for price ana­lyt­ic solutions
• Data min­ing and mar­ket bas­ket tech­niques to assist in deliv­er­ing cross sell and lead iden­ti­fi­ca­tion rec­om­men­da­tions and solutions 
• Hier­ar­chi­cal time series fore­cast­ing to deliv­er raw mate­r­i­al fore­casts 

As a result, the Dow Advanced Ana­lyt­ics team enabled over $100 mil­lion in val­ue from mul­ti­ple cus­tomized solu­tions that were embed­ded in the func­tion­al and busi­ness work process­es and oper­at­ing dis­ci­plines over the last two years. This was pos­si­ble because of the use of inter­nal SAP data direct feeds and exter­nal data sourcing.