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Improved inventory management at Wehkamp
Inventory levels can be greatly reduced by optimizing sourcing processes and aligning Sales and Operations
In just 3 months, working capital was reduced by 25% while stock turns increased by 60%
Supplier performance monitoring was set up, sparking a new impulse for the professionalism of the planning organization
At a glance:
As a leading online retailer with an extensive home and fashion assortment, Wehkamp faced the challenge of wanting to reduce working capital and stock levels on the one hand and maintaining the availability of products on the other. The aim was to improve internal processes and prevent unnecessary investments in warehouse capacity. To achieve this goal, it was vital to consider important pillars of the retailer's context:
Next-day availability is extremely important for the business model
There is a mixed procurement for North-western Europe versus Eurasia
Physical limitations exist within the logistics network
Data-driven processes to achieve results
First, IG&H conducted a short quick scan followed by a design phase to determine the approach and improvement potential. In collaboration with Wehkamp management and employees, we used an AGILE, hands-on approach. In this results-oriented way of working, we included weekly stand-ups with direct feedback on improving the results.
Second, we set our sights on data and proof. We supported teams with data analysis to improve decision-making. The focus was first on the largest suppliers to provide (short-term) evidence for this way of working. Finally, we set up multiple preconditions for improving the sustainability of the solution. These included KPIs and incentives, organizational design, management style, supplier management, etc.
In just 3 months, stock levels and working capital were reduced by 25%. Stock turns improved by 60% while the lost sales and operating costs remained unchanged. Furthermore, there was a 35% increase of the goods receiving capacity in the warehouse. Besides improved collaboration between sales and operations, a supplier performance monitor was also developed. This resulted in streamlined and data-driven inventory management, elevating the planning organization to the next level of professionalism.
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