June 3, 2024

Revamping inventory management ecosystem to maximize sustainable gains

Structural improvements on the inventory management processes

Revamping inventory management ecosystem to maximize sustainable gains

At a glance

Challenge

For retail companies, inventory management is crucial to operations. With a growing focus on reducing costs, companies often implement numerous improvement initiatives. However, these can sometimes lead to suboptimal solutions due to a reliance on specific cases or process owners. The goal of this project was to develop analytical methodologies that enhance efficiency while maintaining necessary standardization.

Solution

Through a long-term partnership with the client’s internal teams, we implemented transformational changes that delivered significant operational benefits. The project focused on three key pillars:

  • Methodology Improvement: Streamlined inventory processes were developed to ensure standardization while addressing business-specific requirements.
  • Results Monitoring: Pilot testing of methodologies allowed fine-tuning and validation of benefits, fostering a stronger monitoring culture.
  • People Empowerment: Processes were internalized through extensive training sessions for operational teams, both at headquarters and in stores.

Results

The structural improvements in inventory management led to increased supply chain efficiency, with an 8% reduction in stock coverage at the store level and 14% at the warehouse level, while boosting service levels by 19% in warehouse operations. The initiatives spanned across the entire supply chain, covering FMCG, Textile, and Health & Wellness business units, and included both national and international procurement processes, promoting standardization throughout the company.

Challenge

For retail companies, inventory management is crucial to operations. With a growing focus on reducing costs, companies often implement numerous improvement initiatives. However, these can sometimes lead to suboptimal solutions due to a reliance on specific cases or process owners. The goal of this project was to develop analytical methodologies that enhance efficiency while maintaining necessary standardization.

Approach

Solution

Through a long-term partnership with the client’s internal teams, we implemented transformational changes that delivered significant operational benefits. The project focused on three key pillars:

  • Methodology Improvement: Streamlined inventory processes were developed to ensure standardization while addressing business-specific requirements.
  • Results Monitoring: Pilot testing of methodologies allowed fine-tuning and validation of benefits, fostering a stronger monitoring culture.
  • People Empowerment: Processes were internalized through extensive training sessions for operational teams, both at headquarters and in stores.

Results

The structural improvements in inventory management led to increased supply chain efficiency, with an 8% reduction in stock coverage at the store level and 14% at the warehouse level, while boosting service levels by 19% in warehouse operations. The initiatives spanned across the entire supply chain, covering FMCG, Textile, and Health & Wellness business units, and included both national and international procurement processes, promoting standardization throughout the company.

Our
AI-generated
summary

Our AI-generated summary

Our AI-generated summary

To retail companies, inventory management remains core to the whole operation. In the past few years, the mindset to reduce operational costs has been increasing, which leads companies to create innumerous improvement initiatives.

In a recurrent and sometimes suboptimal quest for improvement, processes and methodologies tend to be reshaped either to focus on a specific case or to be over-dependent on some process owners.

Facing this scenario, the main goal of this project was to develop new analytical methodologies, which contribute to improve efficiency while safeguarding the required standardization.

Throughout a long-term partnership with the client’s internal teams, we conducted several transformational changes that lead to important operational benefits. The project approach was grounded on three core pillars:

Methodology Improvement – Upstream and downstream inventory processes were developed to aim for standardization and improvement while ensuring the effective handling for each business-specific requirements.

Results Monitoring – All the developed methodologies were pilot-tested, allowing the fine-tuning of the models and confirming the initially estimated benefits. This also increased the company’s monitoring culture.

People Empowerment – The developed processes were internalized by the operational teams (headquarters and stores) due to extensive training sessions.

Our AI-generated summary

Our AI-generated summary

Due to these structural improvements on the inventory management processes, it was possible to increase the overall efficiency of the supply chain through a reduction on stock coverage (8% at store level and 14% at warehouse level) while increasing service level (19% on warehouse operation).

Moreover, the numerous initiatives lead by the project across the whole supply chain went from upstream to downstream processes, and from FMCG to Textile and Health & Wellness business units, including national and international procurement processes, leveraging standardization throughout all company.

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