Artificial intelligenceis here to stay. Some Lower Austrian companies have recognized the opportunities it holds for the economy and are already working with AI.
By Anna Faltner
The Hahnenkamm Ski Race in January not only attracted many people to Kitzbühel, but also at home in front of the screen in front of the screen at home. More than usual. This means that people are eating at home, with more potato chips and beer on the shopping list. It will be the same this summer during the European Football Championships. To keep the shelves well stocked, grocery retailers need to be prepared for these and many other trends. AI can help here. This has already been the case in the Nah&Frisch stores of the KASTNER Group since July. An AI-based solution for procurement management was integrated there. "We want to support our buyers in using artificial intelligence in a demand-oriented way," explains Elmar Ruth, Head of the Nah&Frisch division at KASTNER. A year ago, the Waldviertel-based company launched the pilot with the St. Pölten-based software developer Circly thanks to a grant from WKNÖ.
In July, the Circly algorithm was rolled out to all 160 Nah&Frisch stores and the collaboration was finalized. "We see this as a time saver for our retailers and a measure to secure earnings. One of our goals is to avoid sell-out situations. That way, they don't miss out on sales and the customer is not forced to move on," says Ruth. But of course, no products on the shelf should go to waste. Keyword: meat, vegetables and dairy products. This requires excellent planning.
AI-BASED PLUG&PLAY SOLUTION INCLUDES TRENDS IN PLANNING
And that is what Circly has developed: AI-supported planning for production and retail. "Many companies still plan their purchases using statistical goods calculation systems - such as Excel. This is simply no longer a suitable planning system in today's world. The economy has become much more volatile. Trends pop up and then flatten out again," explains AI expert and Circlyco-founder Eric Weisz. That's why he and his team are developing AI-based plug&play solutions. Briefly: Circly provides accurate forecasts to reduce purchasing misplanning by up to 50 percent.
This journey began over four years ago. In 2019, the two founders Eric Weisz and Armin Kirchknopf had the idea of using artificial intelligence technology to reduce inefficiency and waste of resources. They founded Circly in 2021 and since then the team of three has grown to more than twelve employees.
The start-up specializes in wholesale and retail as well as production. "With purely statistical planning, we either buy far too much or too little. That's neither sustainable nor economical." That's why Circly has created an algorithm for companies that adapts to market conditions. It uses a wide range of AI technologies - from machine learning to neural networks.
„We can reduce planning errors by half.“
Eric Weisz, AI expert
CHAMBER OF COMMERCE OFFERS SUBJECT SPECIALIZED CONSULTATIONS
For companies interested in the usage of Artificial Intelligence, the Technology and Innovation Partners (TIP) of the Lower Austrian Chamber of Commerce offer subsidized consultations. These include the St. Pölten-based company Circly.
Three key consultations are funded. Step one is the data evaluation, step two is the model iteration and in the third step, the companies go into "live operation". This pilot phase lasts six months, during which the companie scan compare the results of the Circly algorithm with their own values. How does it work? The companies send their data, metadata and marketing data to Circly. "Based on all this data, the system learns what to look out for. Seasonal factors, public holidays, birth rates, current trends - all of this flows into the forecast," explains Weisz. In this way, the planning system tries to understand the sales data and can even predict certain parameters from the future. "This means we are much more accurate than classic statistical goods calculation systems and can reduce planning errors by half," the AI expert is convinced.
RESULT: CUSTOMERS SAVE TIME AND SECURE REVENUE
Many Lower Austrian companies have already taken advantage of the TIP funding and are now continuing to work with Circly - like the KASTNER Group. However, Elmar Ruth, head of the Nah&Frisch division, has not yet come to a concrete conclusion. "We can't specify a percentage because we can't really measure the success. But we believe that we are saving valuable time and also ensuring a certain level of income," says Ruth. Another company that works with TIP and Circly is Egger Getränke GmbH & Co OG. A broad product portfolio, highly dynamic market conditions and the need to become even more efficient mean that production and procurement planning play an important role. In addition, sales volumes fluctuate greatly.
"The main influencing factors are the promotional activities and purchasing behaviour of food retailers, general market and consumer behaviour, weather, seasonal fluctuations and major events," explains Patrik Berger- Witzany, Head of Controlling, Digitalization and Processes. The manual preparation of sales forecasts is time-consuming and prone to errors.
QUALITY OF SALES FORECASTS OPTIMIZED AT EGGER BEVERAGES
"Circly's distinctive expertise and understanding of the market, as well as the WKNÖ's funding model, were crucial for us to implement an AI solution for sales forecasting," emphasizes Berger-Witzany. The IT connections between the two companies are currently being established. "During the planning phase, the AI was trained using existing data and its predictions were compared with those of the key account managers. The quality of the sales forecasts was improved on an ongoing basis as a result," says Berger-Witzany.
As soon as the IT interfaces have been set up, Egger Beverages intends to let the AI handle its sales forecasts for the majority of its private label and private label business independently. Key account managers will be in control, freeing them up for other tasks.
Text reposted from the owner, editor and publisher: Wirtschaftskammer Niederösterreich. Written by Anna Faltner.
Original text for download: How AI is changing everyday life
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