About the Company
Kinsey is a wholesale distributor of Japanese and Korean household chemicals, essential goods, and daily-demand products. The company has been using specialized software since 2018. It operates two divisions in different cities, and one of the warehouses also serves as a distribution center. As of October 2022, their product range consists of around 3500 SKUs.
Reasons for Software Implementation
The demand for the company's products is sporadic and hard to forecast. Core products include detergents, fabric softeners, dishwashing liquids, and daily essentials.
Each subcategory has several dozen similar types of products, making it challenging to predict consumer preferences on any given day. Additionally, the sales cycle ranges from 5 to 10 weeks. The company must also account for shipping times, as it operates nationwide. Recent product deliveries have been highly unstable, sometimes taking up to 60 days due to customs delays.
Faced with these challenges, the company sought a solution. Previously, planning was done using Excel, but by 2018, certain products were not selling as well as hoped, and warehouse inventory levels were rising. Moreover, the range of products had significantly expanded, including items that could sit in the warehouse for months before selling within a couple of days. Manual forecasting for such scenarios was impractical, raising the need for automated purchasing and planning systems to address uneven and infrequent demand.
Why They Chose Forecast NOW!
“When I was choosing software, I looked at many options. What attracted me to Forecast NOW! was that it was initially designed for automotive parts, which have similar sporadic and infrequent demand patterns to our products. After further investigating the software, reading about its algorithms, and watching a demo, I decided it was the right fit for us”, - said the CEO of Kinsey Company.
The company doesn't rely on borrowed funds, and the two most critical areas are accounts receivable and inventory levels. Therefore, the software needed to optimize stock planning efficiently. Japanese products are relatively expensive, so any mistake could have serious implications for the business.
"The primary reason we use Forecast NOW! is for product forecasting and purchasing, trend analysis, and distribution across branches. I also use it for sales analysis across different periods and for comparing sales of various product groups", - said the CEO of Kinsey Company.
Results of Implementation
- Inventory levels decreased by 30% within six months after implementing Forecast NOW!. The number of products in category 'C' decreased, while those in category 'B' increased.
- Sales increased by 25-30% over the same period.
- The inventory turnover period decreased by 35%. The purchasing strategy was reallocated to focus more on fast-moving items and less on slow-moving items.
- Ordering time was reduced by a factor of five, even as the business volume increased five-fold, and the number of product lines increased seven-fold. Previously, one person spent around 10 working days per month on order formation. Now, it takes no more than two days per month, including time for order verification and sales analysis. Orders are now made based on current market conditions, including delivery schedules and specific planning horizons.
- The software paid for itself within six months of initial use.
"Sales are up, inventory isn’t growing, everyone is happy. Compared to Excel, it's like comparing night and day: the workload is significantly lower, and the results are completely satisfactory. I'm pleased with the software; in four years of use, I haven't looked for an alternative", - said the CEO of Kinsey Company.
