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.
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 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
- 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
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