Introduction

A leading US telecom provider determined that many of its retail locations were understocked on fast-selling items and overstocked on slower-moving ones. The company engaged ProCogia to help optimize the inventory, and amend the automated store replenishment routines to rebalance stock holding.

ProCogia’s solution resulted in a target-store inventory reduction of $11.5m after stock repositioning. The company realized a $2.9m inventory savings within the first 3 weeks of implementation.

 
 

The Challenge

A leading US telecom provider with retail outlets nationwide determined that many outlets were understocked on faster-selling products and are over-stocked on the slow-moving ones, with 82% of the SKUs selling less than 1unit in 2 weeks. The company engaged ProCogia to help optimize the inventory, and amend the automated store replenishment routines to rebalance stock holding.

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
  • Stock reposition led to 2% reduction in stock-outs which would result in increased sales of $0.35m per week
  • The increased sales exceeded the risk of losing $0.03m sales in a 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.

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