Furniture retailer Joshua Doore has cut stockholding 11% in the six months after it began implementing the Hawk inventory management system from Ixchange Logistics.
"These early results look very promising when compared to the historical stock status for 1996/1997," says Joshua Doore logistics GM Andre Barnard.
Hawk was implemented at Joshua Doore as a pilot for the JD Group. It is now being implemented at Russells, Bradlows and Giddy s Electric Express. Score and Price n Pride will follow in January 1999.
A prime objective was to centralise control of Joshua Doore`s key 1 800 product lines, across 123 branches, out of six warehouses and 42 drop-off points. Before this, inventory control was manual. Human error hampered marketing and advertising campaigns when incorrect ordering based on faulty forecasting resulted in shortages of advertised stock. Some items were overstocked, others were out of stock and often advertised lines weren`t on display.
"The key to our business is having the right stock in the right place at the right time," says Barnard. "Our efforts were hamstrung by our reliance on branch managers` decisions and ordering with out-of-date stock reports. It was difficult to control or manage from head office."
Danie Botha, director of Ixchange Logistics, concurs. "We found people spending their time on manual inventory control. Buyers took weeks deciding what to order and where to send stock, and a lack of information from branches resulted in less optimal discretionary decisions."
Hawk`s centralised controls have resulted in increased sales due to advertised stock being in stock at store level at the right time. Because key products are on display, service levels have improved and the complaints department has been reduced from three full-time staff to one part-time person.
Joshua Doore topped group sales in September. "We won because stock is available," says Barnard. "Our sales pattern is changing because we now have the right quantities of stock in the stores and on the showroom floors. Even non-advertised lines are experiencing improved sales. Hawk has taken much of the pressure off branch managers who can now concentrate on store management."
Suppliers have also benefited as Hawk removes the issue of late cancellations and reroutings. Hawk makes optimal ordering decisions based on current inventory statistics and checks whether suppliers are delivering to agreed lead times.
Hawk facilitates balancing stock between warehouses. In the past this was virtually impossible, with managers using paper reports to ascertain which warehouses were overstocked in one product and understocked in another. "Hawk calculates the answers for the whole group in 15 seconds," says Barnard.
Hawk saves inventory management time across the board. "In the past it took us five days to calculate orders for the top 200 advertised lines; now it takes two days to forecast and place orders optimally for the entire range.
Apart from overstocking, Hawk has exposed other areas for improvement: such as managers at store level not keeping their goods-on-display up to date; inter-branch ordering discrepancies - goods ordered but not collected; and failure to note "goods out to customers" correctly.
Hawk also cleans up mismatches, such as goods shown as being in stock at store level, but not at head office level. It optimises and automates stock replenishment from suppliers and warehouses as well as redistribution to balance stock between branches.
"Being able to see what is selling and the rate of sale across the branches in realtime means we can forecast requirements and order goods in advance, place smaller orders and order more frequently," says Barnard. "These are all keys to lower inventory holdings."
Hawk also caters for the unique stock mix of some stores. For example, Joshua Doore in Swaziland stocks a particular coal stove; an opportunity is lost if it is not in stock. Although this is the only store in the group that sells this stove, Hawk ensures it is always in stock.
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