Innovation in the Cloud: How ToolsGroup is working to bring their advanced analytics and supply chain management solutions to Azure

Download case study

ToolsGroup History

Since their founding, ToolsGroup has partnered with clients across a number of industries such as manufacturing and retail to help customers break through their supply chain and business performance barriers. Their adaptive single-model supply chain planning software enables full automation of the supply chain, leveraging deep understanding of the demand variability, translating the probabilities of the demand into the inventory optimization and replenishment decisions a company applies. This is enabled by the use of advanced analytics, an understanding of the stochastic processes involved, and machine learning.

ToolsGroup’s solution is deployed at more than 300 customer locations worldwide in more than 44 countries. They carry one of the highest customer-retention rates in the industry and their organization has experience working with manufacturers, wholesale distributors, and retailers in a wide range of demand and service-driven industries. ToolsGroup’s solutions are trusted to empower some of the world’s most recognizable brands, including Harley Davidson, Schiendler, Legrand, P&G, Colgate, BP, Ferrari, Danone, Auchan, Bulgari, and Luxottica.

Working with Microsoft

ToolsGroup has a long history of working with MSFT, and they have used Microsoft technology since their inception. They were early adopters of .NET and have a history of working with major enterprise corporations such as BP, Colgate and United Tech—large enterprises looking for highly automated solutions.

Due to this history and the nature of their customers, Microsoft was a natural fit as a partner, and the two organizations have grown their relationship over the years as ToolsGroup has continued to leverage the latest technology to innovate on their existing suite of products.

“When we began looking to the cloud, Microsoft was the natural partner for us, due to both our history using Microsoft technology as well as our shared customer base—Microsoft has a long tradition of working in enterprise environments and providing technology that supports solutions with cross-enterprise capabilities.” – Joseph Shamir, CEO, ToolsGroup

ToolsGroup was born as a company that heavily leveraged advanced analytics long before similar partners had begun to emerge in the marketplace. As their competitors work to catch up, ToolsGroup knew it was critical to continue to embrace the next wave of technological innovation and to leverage early on Artificial Intelligence (AI) technologies to constantly improve upon their own product. Embracing Azure and leveraging Cortana Intelligence has provided ToolsGroup with a secure, solid and reliable environment where they can migrate their applications and machine learning engines. Cloud technologies have also offered ToolsGroup further opportunities to reach smaller and midsized customers.

“We have always had top 500 enterprise companies work with us as early adopters, but we also offer great value to innovative small and midsized companies as well. We are used to working with these small and midsized markets. With Azure we are able to automate and scale supply chain planning and optimization, allowing us to offer a next generation supply-chain solution that incorporates the complexities of today’s volatile long-term demand; from instant delivery requirements, promotions and new products, to IoT devices providing a constant flow of data across the supply-chain.” – Joseph Shamir, CEO, ToolsGroup

As the cloud revolution marches on, emergent trends in the marketplace have further driven ToolsGroup to embrace the advantages cloud computing has to offer.

“The emergence of ecommerce has caused the size and complexity of the networks we work with today to increase while customers demand more and more responsiveness from the application. These forces are driving a transformation in our own solution from a planning application into a high-frequency, mission critical highly automated application for these businesses. Customers are now giving us precious data that impact their demand and supply chains. This brings the need for size, scalability, reliability and security. The Azure cloud allows us to meet these needs to interact with market data, even from multiple enterprises, on a massive scale.” – Juan C. Dorado, Senior Director of Advanced Analytics and Product Innovation, ToolsGroup.

Impact and results

ToolsGroup has found that deploying the automation their application provides customers in managing their supply chains enables these clients to renew their focus on tactical S&OP and strategic initiatives.

Where customers once required multiple positions devoted to daily operations, now, these processes can be automated, freeing up bandwidth to support the cross functional S&OP process where business trade-off decisions are timely made. Such coordinated tactical process provides quality data to a more frequent strategic decisions required by a rapidly changing market.

For Luxottica, a customer in the fashion industry with annual revenues in excess of 7 billion dollars, supply chain management formed a complicated part of their business. The customer offers a very heterogenous product mix that included fashion items with high seasonality and short product lifecycles which, when coupled with managing a global distribution network including 26 distribution centers, made for an onerous and high-touch management process in order to maintain high service levels.

Reaching out to ToolsGroup for help, Luxottica chose to implement ToolsGroup’s Service.

Optimizer 99+ solution, a service-driven inventory optimization solution. With the solution, Luxottica was able to better position inventory to quickly satisfy customer needs while maintaining minimum stocks and excellent customer service levels. Within the first 6 months, Luxottica reduced stock levels by 10 percent while maintaining their already impressive service levels. In the following months, the customer was able to reduce manual intervention in the planning process by 50 percent— while then progressively increasing service levels.

With the success of ToolsGroup’s initial solution, Luxottica has since extended the solution to their spare parts operation. In fewer than 3 months from the project kick-off, the service level has reached 98.5 percent, with an 80 percent reduction in back orders.

By transitioning to Azure, ToolsGroup has also positioned themselves to assist their long-term customers in making the step to cloud computing, with their own solutions functioning as a first step. Additionally, as new customers come onboard, ToolsGroup has brought all of them onto Azure. With the amount of data needed from the customer to effectively leverage the solution, ToolsGroup has been able to effectively drive Azure consumption, influencing over USD 90,000 in Azure annually.