Centralized Forecasting Service: Revolutionizing Time Series Models at Sam’s Club

This is part of a four-part series highlighting work selected for presentation at the 2023 Grace Hopper Conference. The following includes insights from Sam’s Club data scientist and tech leader Yuyan Liu. 

Forecasting product and service demand across all stores and distribution centers is a crucial component of inventory management and supply chain optimization for Sam’s Club. It also helps many other teams in their daily operations, such as pricing optimization, promotion planning, markdown scheduling and product assortment.

This approach is commonly referred to as Time Series Forecasting. It involves using statistical and machine learning techniques to build models from historical data and using them to make predictions.

The models are based on a simple assumption that we can predict the future by analyzing the past. Being able to forecast and make accurate predictions are obviously essential for retailers to make timely decisions that maximize profit, reduce cost and improve customer satisfaction.

But, trying to maintain multiple data pipelines among different data science teams is often unwieldy, inefficient and slow. It’s far more effective to allow all the forecasting projects to be done in one place around the organization, which would provide the best solutions, reduce overhead and speed up decision-making. That’s exactly what Sam’s Club has done.

Sam’s Club's Centralized Forecasting Service

By pooling all forecasting projects into a single hub within the organization, Sam’s Club’s Centralized Forecasting Service (CFS) allows any team that needs forecasting to trigger the automation pipeline and generate forecasts.

Instead of individual departments or branches making their own predictions in silos, the CFS gathers, processes and analyzes data in a holistic manner to generate more accurate and comprehensive forecasts.

Key features and benefits of Sam’s Club’s CFS include:

• Scalability: Built on the Google Cloud Platform, the CFS allows users to process very large and real-time data sets. As business grows, a centralized system can more easily scale and ensure that forecasts remain robust regardless of the size or complexity of the operations

• Consistency: All the source tables and features used by the CFS have passed a trusted 'audition' and consolidation process that is widely recognized across the company. When different departments work with the same forecast, it ensures that all teams are operating with consistent information, leading to more aligned and informed decision-making across the board

• Configurability: Users can choose the granularity of target values, such as merchandise, geography, or time granularity and have the flexibility to define their own workflow

• Accuracy: Because a centralized system can pull data from multiple sources and utilize advanced analytics and algorithms to generate forecasts, these forecasts tend to be more accurate than those created in isolated departments. This, in turn, leads to reduced holding costs, minimized stockouts or overstocks and improved customer satisfaction

• Responsiveness: A central, unified forecasting system is often better equipped to quickly identify and respond to emerging market trends, changes in customer behavior, or external disruptions such as supply chain issues

• Risk mitigation: By having a more holistic view of the business and market trends, we can better identify potential risks or disruptions and strategize accordingly. This proactive approach not only can significantly reduce potential negative impacts, but because a CFS reduces redundancy among teams, it also creates significant time and cost savings    

The Sam’s Club CFS will help Sam’s stay ahead by anticipating the changing retail landscape, incorporating digital integration and adapting to fluctuating consumer behaviors. Our marketing, sales and supply chain teams can work together using the same data, ensuring strategies that are in sync. We can respond swiftly to market dynamics and deliver a better shopping experience for our members.