About the Company
Eler Company specializes in the wholesale and retail sale of home and garden products. They operate 2 stores and a warehouse spanning 4,000 square meters. With a vast inventory of 15,000 SKUs, they've been using Forecast NOW! since 2017.
Reasons for Implementation
Eler Company offers a wide range of products, many of which are seasonal and occasionally in demand. These products are sold through their two proprietary retail outlets. Given the considerable warehouse space and a relatively narrow sales channel, there's a compelling need for meticulous inventory planning to prevent overstock and meet demand.
Previously, inventory planning was done manually and intuitively, which consumed a lot of time. Essentially, managers spent all their working hours calculating and checking orders.
"Another reason for the implementation was to assess employee performance. I needed to tie employee motivation to their job performance, ensuring they worked for more than just a basic salary. This required a structured and systematic approach to purchasing. Simply tying a manager to purchase or sales volume was challenging, given the myriad factors they couldn't influence," states the Commercial Director of Eler Company.
Implementation and Usage
The decision to implement Forecast NOW! at the company was made after an Efficiency Insight Assessment
"The primary challenges during implementation involved our staff – explaining to them that their way of working would change and why this was necessary. I wanted our employees to understand the principles of the software and to embrace the changes. At this juncture, we had to employ administrative measures," mentions the Commercial Director of Eler Company.
On multiple occasions, staff members tried to abandon the software, claiming its calculations were incorrect. However, each time, upon inspection, it turned out that human errors or improperly set parameters were to blame. In each instance, after reviewing the situation, they reverted to using the software.
Regarding the technical aspects of the implementation, the process was relatively quick and faced no major obstacles. The company utilized ERP 1C, and integration with it was accomplished within a month. An additional two months were required to test the software in a trial mode with a limited number of orders and suppliers.
"Besides demand forecasting and order calculations, we frequently make use of various analytics, particularly efficiency analysis, ABC analysis, and category management. Sales analytics in various dimensions is a very handy and informative tool. When sales prices are integrated, it allows for predicting how price changes affect sales.
We often use trend analyses, which help assess the prospects of working with certain product ranges or companies. We occasionally use promotional planning as well. During the pandemic, when our stores were closed, this functionality helped us anticipate future demand and calculate stock levels," shares the Commercial Director of Eler Company.
Results of Implementation
"The primary benefit of implementing the software has been the significant reduction in routine operations. This allowed our managers to free up time, allowing them to focus on other important tasks such as seeking improvements, researching and analyzing market trends, engaging more in marketing, spending more time communicating with suppliers, and further training.
Another crucial advantage is that every manager now always has a list of orders to place for the upcoming period. And if an employee resigns or is absent for any reason, their tasks can be quickly shifted to another colleague. They don't need to delve deep into product categories. If the software parameters are set correctly, it doesn't matter whether they're purchasing bananas or ceramic tiles. Our team members have become more versatile, eliminating reliance on any one specific individual," states the Commercial Director of Eler Company.
- The investment in the software paid for itself within a year. Thanks to inventory optimization, the flow of available funds has significantly increased.
- Around 90% of orders are calculated automatically and require no adjustments.
- One manager now oversees about 5,000 SKUs across various segments. At the time of implementation, there were about 8,000 SKUs, and three full-time and one part-time individuals managed these calculations. Now, despite a 40% increase in order volume, amounting to about 15,000 SKUs, only three individuals manage the calculations.
- Managers now have ample free time to negotiate with suppliers, analyze the market, and study trends. Previously, they were only occupied with calculations.
- Systematizing the work helped establish a motivation system for employees. Clear KPIs now exist, tied to purchasing volume, stock investment efficiency, and service levels. All these parameters are calculated in Forecast NOW!, allowing managers to influence their effectiveness.
- The standardized processes allowed for the swift transfer of order-making responsibilities from one employee to another in cases of resignation or sickness. A replacement employee can rapidly create an order through the software, without needing specific expertise in those product categories.
- Order creation time has been cut down by six times. Previously, on average, to form and check an order for one supplier manually took about 1.5 days. Now, it takes an average of only 1.5-2 hours, including order analysis.
- The software has helped to standardize the company's procurement business processes. Before, orders were mostly based on individual experience and intuition. There wasn't an order calendar. Now, there's a purchase calendar and plan; orders are placed according to the timelines recommended by the software. This foundation now allows for budgeting and financial planning.
