Mu Sigma developed a self-service dashboard that optimized the client's inventory management, preventing lost sales due to out-of-stock (OOS) scenarios and significantly boosting sales.


Department Stores and e-Commerce

Solution Category

Inventory Management

Client Profile: Digital and Physical Presence

The client, a foremost department store chain in the US, operates over 1,000 department stores nationwide. Besides the brick-and-mortar outlets, they maintain a distinct e-commerce channel with exclusive merchandise. Their e-commerce portfolio includes both seasonal fashion products and year-round basic items. Despite their broad reach, they grappled with inventory challenges, particularly products that remained OOS for extended periods.

Tackling Lost Sales with Strategic Insights

Mu Sigma identified through the in-stock metric that many products frequently went Out of Stock (OOS), causing significant sales losses for the client. Leveraging our Art of Problem Solving (AoPS) system, we devised a self-service dashboard. This tool allowed the client to pinpoint lost sales due to OOS, leading to enhanced inventory management, improved online customer experience, and diminished customer churn. By understanding the interconnectedness of various business challenges, we provided a comprehensive view of the cascading effects of OOS, which earned us referrals within the client’s organization.

A First-principles Approach to Inventory Management

Applying the AoPS system, we embraced first principle thinking and began mapping the interconnectedness of various business challenges. Using muPDNA™, we meticulously defined the problem, pinpointing key factors and analyzing the linked hypotheses. This led us to discern the impact of weekday versus weekend demand and seasonality on product availability. A heuristic methodology then helped gauge average sales for all SKUs. Subsequent quartile analysis pinpointed underperforming products, leading to recommendations for inventory reallocation to bolster sales. The self-service dashboard we developed provided detailed metrics across product hierarchies. Finally, we unveiled the intricate web of interconnected challenges on our muUniverse™ platform, granting the client deeper insights into how OOS affected multiple business units.

Business Impact

  • $90M

    Increase in sales

  • Boosted Satisfaction

    Minimized OOS products

Mu Sigma is the world's largest pure-play big data analytics and decision sciences company. Through our Art of Problem-Solving, we strive to scale and systematize better decision-making through business intelligence services. Mu Sigma works across the entire decision support ecosystem (data sciences, data engineering, and decision sciences) with Fortune 1000 companies worldwide, including 140+ Fortune 500 companies.