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Automatic re-ordering can reduce the required manpower by up to 50 %, at the same time turnover increases because of a better merchandise availability while the stock decreases. Write-offs for items with limited shelf life are equally reduced.
Prerequisites in order to obtain optimum results are correct stock data together with forecasting and ordering methods that are tailored to the needs of the retail business.
SIGMA supports all processes relating to stock management. In this way it is ascertained that miscellaneous movements like theft, losses, returns etc. as well as goods received will be registered by item on a daily basis to guarantee correct stock data. This stock will be updated ‘online’ by sales from the POS-system. Possible stock differences will be handled through partial stock counts.
SIGMA uses forecasting methods that are especially developed for the retail environment. Compared to standard forecasting methods the accuracy is much better. Especially when running promotions considerable stock reductions are realised.
Forecasting Methods (Demand calculation) - Procedures for slow movers
- Procedures for fast movers (Produce) with a sales profile on a weekly basis
- Dynamic adaption of the weekly profile by item
- Verification of thresholds if unusual sales volumes occur
- Automatic adaption of smoothing parameters
- Starting and end-of-life items
- Application of the forecasting values to substitution items
Parameters influencing the replenishment process - Order- und delivery days per week, allowing variable delivery and order schedules
- automatic calculation of safety stock related to the defined service degree
- Takes into account shelving
- Dynamic rounding to the next higher order unit e.g. box to pallet
- Improved accuracy through incorporation of no-sales through zero stock situations during the day
- Minimum shelf stock in order to avoid empty shelves
The workflow can be made to match the organisation: - Ordering at the shelf using (wireless) PDT's, SIGMA creates orders by supplier
- Order suggestions with readable barcode
- Order plans by date and time in order to automate the workflow
All these procedures are included in SIGMA.
Enhanced forecasting procedures (additional module) take into account: - seasonal influences and holidays
- external factors like weather conditions
- losses
Results that customers achieved - Kloppenburg GmbH (drugstores) in Kiel, Germany has introduced automatic re-ordering in 140 stores
The results: Stock reduced by 10% - Spar independent retailer, 10 million Euro turnover, 4 POS (scanning), ca. 12000 items
Before introducing automatic ordering the ordering cycle took one day, presently SIGMA does the job in 1 hour. The tobacco department could reduce its stock by 50%. The ordering for the main assortment, that lasted 6 hours now takes 1 hour computer run time by SIGMA. Ordering 250 yoghurt items that used to take one half hour are now finished by SIGMA in 3 minutes.
Shelf without no automatic re-ordering
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