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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