How FICO Helps Retailers Become More Efficient Across their Supply Chains

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FICO, a leading global analytics company, is helping businesses around the world become more efficient across their supply chain by using predictive analytics and optimization to improve their performance.

“Optimization is an amazing technology. The FICO Xpress Optimization Suite, is the premier mathematical modeling and optimization solution in the world. It’s used for many, many different business solutions.  With supply chain optimization FICO is trying to simplify the complexity, improve the performance and reduce costs,” said Michael Testa, retail and loyalty vertical lead in North America for FICO.

“The challenge within supply chain is it is extremely complex. If you take any mid to large size retailer, they probably have a supply chain that looks like a spider web. FICO can take that data and complexity, utilize predictive models with our business expertise to solve these complex problems. The focus is in many different areas around supply chain optimization, from logistics planning, inventory management or vehicle route planning, as examples. Where do you place your warehouses for example? How to maximize customer service while reducing costs is always a big challenge.”

Testa said “the wonderful thing about optimization is the ability to bring all the variables into play and answer all those questions as well as getting a sense of the return on investment for the business.”

FICO is an acronym of Fair, Isaac and Company which was founded in 1956. William Fair, an engineer, and Earl Isaac, a mathematician, were the original founders of the company which is today based in Silicon Valley. It was created to help businesses focus on making smart business decisions by using math and engineering to do that.

It focuses on analytics, software and consulting. FICO creates solutions for businesses to make smarter decisions in business speed.

Testa said “optimization is enabling FICO’s customers to make smarter business decisions, solve problems and gain increased efficiencies that are needed to survive in the new retail environment.”

“We’re seeing in every industry, especially in retail, your supply chain is highly important both from obviously fulfilling your stores and keeping your customers happy, but also now that most retailers are moving into direct delivery, e-commerce, their supply chain complexity has increased quite a bit,” said Testa.

“And our optimization suite allows companies to increase their effectiveness and their efficiency with increased complexity allowing them to keep their costs down within the current infrastructure that they have.”

“The optimization suite has different components. We have our own modelling language that utilizes the data to develop the analytics that requires optimization and then we execute those models to predict out the output of what is going to happen and based upon that companies can then make a decision to what is the right next action to take to gain those efficiencies in play.”

“The way the optimization suite works is it has different variables of the platform. We have our own modelling language that actually utilizes the data and comes up to develop the analytics that requires optimization and then we execute those models to basically predict out the output of what is going to happen and based upon that companies can then make a decision to what is the right next action to take to gain those efficiencies in play.”

The suite allows business users to get involved in the decision making. Testa said FICO has some of the largest e-commerce retailers in the world who use the software to decide everything from how they get product from the warehouse to customers with same-day delivery to how they place products within their warehouse environment and even how they handle internal shipment through their own delivery network.

The bottom line is efficiency, supply chain management can have a big impact on a company’s bottom line by achieving a lower cost while enhancing the customer experience.

“Many clients have achieved this through understanding, using the data with the analytics and gaining those optimization efficiencies while keeping the manpower and the infrastructure that they have in place,” said Testa. “Allowing companies to get to the next level of efficiency.”

He said optimization technology is being used today by smaller companies as well as the giants.

“Any business that has a certain amount of complexity and complexity is multiple store locations, multiple warehouse locations, the complexity starts becoming exponential within a supply chain environment very quickly,” said Testa.

FICO is starting to combine the FICO Xpress Optimization Suite with the FICO Real-Time streaming analytics platform enabling businesses to make decisions in real time. The optimization suite would take information as it occurs in real-time, especially in a supply chain environment, and enable the company to make real-time decisions to find the most efficient output within the data.

“Because today’s reality is, businesses are moving so quickly you can no longer wait to make decisions over six months to see how they play out – having the streaming technology tied in with optimization to make decisions and the ability to adapt to your situation in real time,” added Testa.

*Partner content. To work with Retail Insider, contact Craig Patterson at:

Article Author

Mario Toneguzzi
Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior News Editor with Retail Insider in addition to working as a freelance writer and consultant in communications and media relations/training. Mario was named as a RETHINK Retail Top Retail Expert in 2024.

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