RELEX wraps up a successful two-year project to reduce spoilage in food retail supply chains
RELEX Solutions, provider of unified retail planning solutions, has taken part in The European Commission’s research and innovation programme Horizon 2020 in which it was granted a €1.4 million funding for its NexGenFSCM project (The Next Generation Supply Chain Management Software in the European Food Industry).
During the project RELEX further developed its software for the food retail sector in order to increase efficiencies and reduce spoilage across supply chains. With a strong focus on developing new and improved forecasting methods RELEX enables food retailers using its solutions to produce high quality forecasts resulting in better planning and reduced inventory levels, increased sales and decreased spoilage.
RELEX identified key functionalities which were further developed during the programme period and tested through three pilot projects with RELEX’s customers:
- Pilot project 1 tested RELEX’s promotion regression functionality which takes into account the effects of price changes and the individual effects of different types of promotions. The pilot showed that the functionality ensures more reliable forecasts compared to the use of traditional forecast models.
- Pilot project 2 tested the use of regression forecasting for external impacts and product demand cannibalization when a substitute product is promoted in a campaign. When combining the improvements in forecast accuracy, from both the forecasting of external impacts and product demand cannibalization, with the rest of RELEX’s product suite, the pilot showed that availability improved by 0.2 percentage points and inventory levels were reduced by 25 %.
- Pilot project 3 tested the impact of taking weather-related demand fluctuations into account in forecasting. The tests proved that using weather variables that affect demand leads to more stable and accurate forecasts.
The project has also enhanced RELEX’s organizational capability for commercializing the new solutions. The improved sales model has yielded results already during the project and has positively contributed to RELEX’s revenue growth in 2017. During last year, RELEX’s annual SaaS revenue growth accelerated from 54.1 % to 74.6 % and reached 13.17 million euros. At the same time RELEX’s overall revenue grew from 18.49 million euros to 26.35 million euros.
RELEX Solutions’ CFO Johan Haataja comments: “The project was a success! RELEX is already reaping the benefits of the project, but more importantly, our customers are gaining benefits from the disruptive innovation”.
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 726825.