How Kearney Saved Retail Client $50M in Cost-to-Serve with Alteryx

Since 1926, global management consulting firm Kearney has been helping its clients implement strategic, operational, and transformational change. Throughout the last century, Kearney has inevitably had to implement its own changes — particularly in technology and analytics.

For instance, it acquired data analytics consultancy Cervello. And Cervello and Kearney adopted Alteryx, an end-to-end analytics platform, so that they could better serve their clients.

This change not only transformed Kearney’s internal analytics — slashing data processing time by more than 70% — but also its clients’, saving them tens of millions of dollars with granular insights. Learn more about Kearney’s shift to self-service, AI-guided analytics and how they saved one leading retailer millions of dollars with a robust cost-to-serve model.

Client transformation starts internally

“Before Alteryx, we would do this type of analysis — data cleansing, data transformation — in Excel, and it was a nightmare,” said Matt Feeley, a longtime consultant with Kearney. “Updating formulas meant seeing the spinning wheel of death.”

Kearney recognized it needed a better way to harness the power of large data sets and drive more effective decision-making for its clients.

Alteryx’s ability to quickly integrate, clean, manipulate, and analyze large amounts of data from multiple sources was just one reason Kearney chose the end-to-end analytics platform. Another was its versatility and ease of use, which empowers data workers of any skill level to perform complex data cleansing and transformations and develop low-code, no-code models.

As a result, Kearney slashed data processing time by more than 70% while enabling them to rapidly create and iterate powerful predictive and prescriptive models.

Reducing working capital by $50 million for a leading US retailer

Among the clients to reap the benefits of Kearney’s Alteryx implementation was a leading U.S. retailer looking to optimize its supply chain. As is the case with many other organizations, the client lacked visibility into the true impact of each product’s performance on their bottom line.

So, the Kearney team developed a cost-to-serve model to identify costs incurred at every step of the supply chain for nearly every SKU in the retailer’s assortment. “Cost to serve is the backbone to understanding your supply chain performance,” Feeley said. “It feeds into so many other analyses.”

Cost-to-serve — the total cost to deliver a product or service to a customer — includes every cost incurred throughout the supply chain, from packaging materials and logistics to customer service and admin work. Without reliable data insights, companies simply operate under assumptions that mask profit vampires. For Kearney’s retail client, a significant portion of SKUs were identified as margin erosion candidates and were immediately raised for review with the merchandising teams, getting swift action.

The data required to understand true cost-to-serve for more than 100,000 SKUs was enormous. It included data from transportation management systems, purchase orders, and finance and accounting systems.

With Alteryx, the Kearney team was able to ingest and analyze huge volumes of data at scale, creating a proof-of-concept within a week. Over time, they layered on additional insights, including product seasonality, store span, substitutability, margin contribution, and revenue ranking. The model also factored in various levels of granularity in cost allocation, from whole pallets to individual units.

“We immediately were able to start identifying the poorly performing products,” Feeley said. “That included products that had a negative margin once you considered all the different supply chain costs.” The model developed by the Kearney team isolated inefficiencies and cost leakages down to the SKU level.

The project lasted several months, and now, the model is updated monthly with outputs shared directly with supply chain and commercial teams. The latter adds context, such as customer loyalty data. Ultimately, the model identified 13,000 unproductive products.

Kearney’s client opted to eliminate 1,500+ SKUs in the first two months, with many more being reviewed, and take steps to improve the profitability of the remaining products. The cost-to-serve framework enabled the client to achieve a $50 million working capital reduction and to save an additional $10 million in transportation costs annually.

Making the impossible possible with Alteryx

“Embracing Alteryx has changed our trajectory in analytics and decision-making processes, empowering us to provide actionable insights with impressive speed and precision,” Feeley said. In fact, its cost-to-serve model was so successful that Kearney is creating a reusable Alteryx workflow as a solution within its digital advisory practice. The model aims to help clients react quickly to supply chain risks and be proactive in managing operational excellence.

“With Alteryx, we can now undertake data transformation activities that were previously impossible, ensuring data-driven decision-making is at the forefront of every strategy,” Feeley said. This analytics approach is empowering Kearney to maintain its leadership in providing cutting-edge, data-driven consulting services, reaffirming its market position and strengthening client relationships and outcomes for decades to come.

Want to see how Alteryx can help you turn your data into a competitive advantage? Start a free trial or book a demo today.