How Sentinel Works
Sentinel uses statistical and machine learning methods to establish baselines and detect deviations that indicate potential problems.
Anomaly Detection Methods
- Statistical Control: Z-score and IQR-based outlier detection
- Time Series Analysis: ARIMA residual analysis
- Isolation Forest: ML-based multi-dimensional anomaly detection
- Change Point Detection: Identifies sudden pattern shifts
Monitoring Areas
Sentinel monitors across multiple dimensions:
- Sales Patterns: Unusual spikes or drops in demand
- Margin Erosion: Products losing profitability
- Inventory Health: Dead stock, excessive shrinkage
- Supplier Performance: Lead time deterioration, quality issues
- Pricing Anomalies: Competitor price wars, market shifts
- Cash Flow Risks: Receivables aging, payment patterns
Alert Types
Critical Alert
Immediate action required, significant business impact
Warning
Attention needed, potential issue developing
Observation
Unusual pattern detected, worth monitoring
Insight
Trend or pattern that may be an opportunity
Impact Scoring
Each alert includes an impact score (1-100) based on:
- Financial Impact: Estimated revenue/cost implications
- Probability: Likelihood the pattern continues
- Urgency: How quickly action is needed
- Scope: Number of SKUs/customers affected
Impact scores help you prioritize which alerts to address first.
Risk Categories
| Category | What It Monitors | Example Alert |
|---|---|---|
| Demand Risk | Sudden demand changes | Sales dropped 40% vs forecast |
| Margin Risk | Profitability erosion | Category margin down 5pp in 2 weeks |
| Supply Risk | Supplier issues | Lead time increased 50% for key supplier |
| Competitive Risk | Market position | Competitor price undercuts on 23 SKUs |
| Inventory Risk | Stock health | 15 SKUs have 120+ days of stock |
Example Alert
Margin Erosion Alert
Impact: 72
Category: Audio Accessories
Summary: Gross margin for Audio Accessories has declined from 32% to 24% over the past 3 weeks, affecting 18 SKUs worth ₹4.2L in monthly revenue.
Root Cause Analysis:
- Competitor "SoundMax" dropped prices 15% on 10/12
- Our prices followed (via Astra) but cost didn't decrease
- Supplier hasn't updated pricing in 6 months
Recommended Actions:
- Negotiate cost reduction with supplier
- Review pricing strategy for this category
- Consider alternative suppliers
Affected Products: 18 SKUs including AUDIO-EARB-001, AUDIO-SPKR-002...
Alert Configuration
Customize Sentinel's behavior in Settings:
- Sensitivity: Adjust thresholds for anomaly detection
- Notification Channels: Email, Slack, SMS, in-app
- Alert Routing: Different alerts to different teams
- Quiet Hours: Suppress non-critical alerts at night
- Escalation Rules: Auto-escalate unacknowledged alerts
Best Practices
- Start with default sensitivity and tune based on false positive rate
- Acknowledge alerts to help Sentinel learn your priorities
- Set up escalation for critical alerts
- Review alert trends monthly to identify systemic issues