ProCogia optimized inventory and saved $2.9m in 3 weeks
Company Information
A leading US telecom operator sought innovative solutions to optimize its inventory management, particularly by addressing slow-moving stock keeping units (SKUs). The challenge was to effectively identify and manage these SKUs to reduce inventory costs while minimizing the risk of stock-outs and maximizing sales potential. ProCogia was enlisted to devise a data-driven strategy that would enable the telecom leader to achieve these objectives efficiently.
The Challenge
The primary challenge was the lack of a systematic approach to identify slow SKUs and manage their replenishment effectively. The telecom leader needed a solution that could dynamically adjust to changing market demands and inventory levels to optimize stock levels across stores. This required a nuanced understanding of inventory dynamics, sales patterns, and risk management to ensure that any inventory optimization strategy would not adversely affect sales.
Procogia’s Approach
ProCogia worked with the company’s leadership and retail team to:
Define business rules for identifying slow SKUs and test hypothesis to define filter rules and their refresh frequency to identify slow SKUs
Develop alternate approach for slow SKU replenishment
Evaluate the potential solutions based on benefit-vs-risk analysis and complexity to implement
Develop detailed plan for implementation with the test and roll-out strategy to track benefits
The Results
20.8m reduction in target store inventory with actual inventory reduction of $11.5m after stock repositioning
The increased sales exceeded the risk of losing $0.03m sales in a week
Stock reposition led to 2% reduction in stock-outs which would result in increased sales of $0.35m per week
$2.9m inventory savings realized within the first 3 weeks of implementation
Services Used
Data Consultancy
We provide data consultancy to organizations to optimize your investment in people, processes, and technology. This is typically through data strategy engagements, roadmaps, transformations, and independent technology advice.
BI & Analytics
We transform complex and high-volume data into BI reports using dashboards and visualizations, allowing you to make smarter decisions.
Conclusion
ProCogia’s strategic approach to inventory optimization for the US telecom leader represents a transformative shift in managing slow-moving SKUs, driving significant savings and sales growth. Through careful analysis, innovative strategy development, and meticulous implementation planning, ProCogia not only achieved immediate cost savings but also established a robust foundation for sustained inventory efficiency and sales success. This case study underscores ProCogia’s capability to deliver high-impact solutions that address complex operational challenges, fostering strategic growth and operational excellence.
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