Global Dairy Trade
The challenge
Global Dairy Trade (GDT), a subsidiary of Fonterra Co-Operative Group, provides a reliable and transparent means for buying and selling dairy commodity products from around the world. Since its formation in 2008, GDT has developed into a truly global, multi-seller auction platform with annual sales of over 1 million metric tonnes of dairy products across a wide range of product groups. Today, Global Dairy Trade brings together over 650 approved buyers from more than 90 countries, with a range of sellers spanning Europe, USA, India, Australia and New Zealand.
Following the build of their auction platform, GDT has realised that buyers of GDT products have varying needs in terms of quantity, some requiring multiples of a full container, others only a fraction. They needed a data science module to ‘clear’ the market where possible, due to the perishable nature of dairy products.
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The solution
We designed and deployed a trade optimisation algorithm focused on market clearance. The algorithm distributes the auctioned product across participating bidders, minimising residual unsold product, satisfying as much demand as possible across all the bidders.
The result
For high demand products, there was an average increase in sales price of 10% compared to ‘fixed price’ products. Sellers also saw an increase in the rate of market clearance, critical to increase certainty and avoid wastage.
- Simplify the decision processes faced by buyers
- Enable buyers and sellers to reflect their degree of flexibility over the quantities they may be allocated
- Maximise total value gain across buyers and sellers
