Case Study: a large chemical manufacturer achieves 42% better forecast accuracy with Indicio Technologies

How a chemical manufacturer increased their market forecast accuracy by 42%

A large chemical manufacturer was struggling to accurately forecast market demand, leading to inefficient resource allocation. The company had sufficient data but relied on a bottom-up approach using univariate models and biased sales rep input, making it difficult to identify the true leading indicators driving market shifts. Indicio Technologies was engaged to address this challenge.

Indicio Technologies implemented a solution that involved cleaning data, identifying seasonal patterns, and building multivariate forecast models. Using a VAR model with Lasso penalty, Indicio identified the specific leading indicators for the manufacturer's products, such as consumer sentiment and crude oil prices. By weighting over 50 econometric models into one optimal forecast, the solution provided a repeatable monthly process. This resulted in a 42% improvement in forecast accuracy, giving the manufacturer clear visibility into the economic drivers impacting their business.