Inventory Optimisation, Demand & Replenishment Planning 3

Client: Office Supplies Retailer
Background

The client was looking to reduce and optimise inventory in Retail Stores and Distribution Centres, while improving in-stock position and service levels. The client also wanted the following outcomes:

  • Creation of standard, inventory planning processes across product category teams
  • Reduced manual ordering and store ordering
  • Improved forecasting using advanced forecasting techniques
Challenge
  • Developing standard demand planning and replenishment planning processes across disparate product categories
  • Bottom up demand planning for 27,000 SKUs across 160 locations
  • Educating Inventory Team Members on the importance of demand planning and best practice inventory management
  • Remove the ability for stores to make unrestricted stock requests
  • Reduce inventory team members’ replenishment planning workload
  • Poor data quality and inconsistent maintenance practices
Approach

A project was commissioned with GRA to:

  • implement an advanced inventory planning system (GAINS)
  • develop a nightly processing schedule to refresh all data and recalculate forecasts and replenishment recommendations
  • configure user screens and custom fields for multiple roles
  • educate and train the business in best practice demand and replenishment planning processes
  • develop standardised demand and replenishment planning processes for all product categories
  • mentor inventory team members in demand planning and inventory optimisation
  • educate inventory support team on GAINS reporting tools and management of new store requirements
  • measure and analyse impact on inventory and key performance metrics during the Go Live period
  • educate system administrators to manage ongoing support
Outcome
  • Overall 6.6% reduction in inventory across the network in 3 weeks
  • 18% inventory reduction in Distribution Centres and Customer Fulfilment Centres in 3 weeks
  • 11% Reduction in Excess Stock for ranged lines
  • No negative impact on customer service levels or in-stock position
  • 40% reduction in the number of lines projected to have stock-outs
  • Common demand planning and replenishment planning processes across all categories
  • Positive user experience, with inventory team members working independently within a few weeks
  • Improved data quality and consistency more closely managed by the merchandise team

 

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Testimonials

“GRA worked closely with our team to design, develop and deliver an end to end supply chain transformation. This involved implementing a demand-led supply chain that today drives a disciplined, integrated and effective S&OP process. Culturally, our organisation with help from GRA has significantly increased its awareness and appreciation for supply chain decision-making. The above has allowed us to improve our service levels & customer experience albeit whilst reducing inventory and supply chain operating expense.”

– Zel Medak , Regional Business Director (ANZ), Allnex

Typical results

  • 20-40% inventory investment reduction
  • increased service levels ranging up to 99.9%
  • 10%-15% reduction in supply chain operating costs
  • 5%-20% spend management savings
  • the ability to fund business initiatives from operating cash flow (OCF) improvements
  • improved return on capital employed (ROCE)
  • a minimum 3:1 ROI (10:1 to 30:1 typical)