itim insights | Stock optimisation better than the traditional ERP vendors

Stock optimisation better than the traditional ERP vendors

Ali Athar

In today’s world we still have 85% of sales going through our shops. So managing stock in shops is still critical to performance.

The diversity of customers that we now deal with means getting stock distribution right is more important. And weather and trends can still disrupt the best laid plans.

Investment in stock is ‘a use of expensive cash’ yet we do not want to lose sales. As we increase ranges online, the challenge of what to range in a store and how much stock to invest in store gets more complex. Promotions require us to react to stock build-ups and build-downs continuously, and poor stock distribution results in either lost sales or markdowns.

Increased sophistication usually comes with more parameters and more data analysis. Our merchandisers are drowning in data and are time poor – they are not able to maintain parameters at a sufficient level of granularity. We are still ‘averaging’ most of the time.

So we decided to change the paradigm.

We set ourselves the mission that:

  • We want to operate without maintaining parameters we hate parameters
  • We do not want merchandisers to be pouring over information and modelling in spreadsheets
  • We want merchandisers to only deal with exceptions so they are more productive

We have created a system so far advanced, that even the traditional ERP vendors have no comparable features to it. It is based on the principle of stock policies and rules.

Because they can cascade intelligently, they allow you to deal with a whole variety of circumstances as they arise. They can go dynamically from the general (e.g. fast-moving items), to the specific (e.g. fast-moving holiday items, in seaside stores, in August) automatically.

The great secret is that it is self-adapting. It can automatically sense changes in forecast sales, time periods, weather patterns, product arrival dates and self-adjust, rebalancing stock automatically. The rules engine moves the product from one replenishment policy to another  there is no need for human intervention.

The system automatically adjusts for promotions, new line ramp ups, line substitution, product delays, end of life exits, ensuring that those circumstances are dealt with easily without manual intervention.

The benefits are significant. The system does not make mistakes, it does not forget to do things, and it is better than humans at statistical reasoning. Consequently, we are seeing sales uplifts of 3%, availability rising to 95% (with a reduced investment in stock) and markdowns come down 1-3%.

For the most part, Profimetrics is like a software robot. In addition to operational benefits you can operate and manage your business more productively – a sorely needed reduction in head office costs.

>> Read more about Profimetrics Stock Optimisation

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