[Tech30] AI-driven startup Fountain9 analyses demand patterns to make inventory management efficient
Inventory management is integral to successful brands and businesses. An efficient inventory management and control strategy can lead to multiple benefits: improved accuracy, increased efficiency and productivity, and savings of money and time.
Mumbai-based AI-driven tech startupwants to make inventory management more efficient for organisations by helping them stay ahead of customers’ changing preferences with “accurate demand forecasts and stockout predictions”.
Founded by Niki Khokale and Rajas Lonkar in November 2019, the startup’s AI engine, Kronoscope, constantly senses changes in demand patterns to help businesses adapt quickly and eliminate inventory pile-ups even as customers get what they are looking for.
The birth of the idea
Both founders, engineering graduates from Mumbai, did their masters from the US and have work experience with technology companies such Google and IBM.
However, Niki’s experience of working at US retailer Sears, which is now struggling to remain afloat, triggered the idea of a technology solution.
“Having worked at Sears and then at Google, I got first-hand experience of seeing companies at the extreme ends of technology adoption function. Sears was a big name in the history of retail, but they failed to keep up with changing trends and technologies,” she says.
Google, on the other hand, has been at the heart of so many innovations and break-throughs of this century, she adds.
“Heavily inspired by the way Google functions and the level of importance they place on being data-driven, I wanted to do something to help the ‘Sears of the world’ by using what I learned during my time at Google,” Niki says.
Challenges in inventory management
This bootstrapped startup decided to create a technology platform that would help retailers and CPG companies minimise stockouts and inventory pile-ups.
Rajas says inventory distortion typically occurs because of constantly changing consumer preferences and misalignment of suppliers’ lead times-cum-fill rates, combined with gut-based adjustments for marketing and pricing on stocking decisions that can cost retailers up to 12 percent of their revenues.
Fountain9’s AI-powered algorithmic planning provides a holistic solution to the pressing problem of inventory management.
“Our solution brings all interrelated functions around demand, inventory, suppliers, pricing, and marketing on one platform to create a system of intelligence that provides omni-channel demand sensing for better visibility into future demand,” Niki says.
How it helps
The technology platform of Fountain9 focuses on demand sensing, automated purchase plans, pricing, and marketing optimisation. This ensures that there is optimum balance between supply and stocking of goods so that losses are minimised.
“The capabilities we are building are entirely new to the world of inventory management, which will go a long way to address core issues,” Rajas says.
The functionalities of Fountain9’s technology platform are in multiple areas. The scenario planning capabilities provide systematic collaboration between supply chain, pricing, and marketing teams that otherwise function in silos. This helps the companies to test out different scenarios and make data-driven decisions to optimise outcomes.
It also provides early warnings like stockout alerts and has the framework to enhance models with any number of external factors like local festivals/events, weather, competitive signals.
Niki says that the state-of-the-art algorithms capture various nuanced retail-specific patterns like substitution effects, stockouts, and bulk order detection with a high degree of accuracy.
Fountain9 provides its technology solution through a software as a service (SaaS) or software licence model. The startup is now looking to expand operations, primarily targeting the markets of the US and South East Asia.
“We are helping businesses become more efficient but in the grand scheme of things, by eliminating inventory wastage, we are also helping cut down the problem of food supply shortage and reducing the carbon footprint,” Niki says.
Edited by Teja Lele