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. 

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