Operations span over 160 retail locations
Challenge
The company’s category management team was responsible for sales margin optimization, vendor relations, negotiations, and planning and executing sales promotions. However, the labor-intensive task of managing store-level stock replenishment diverted significant time and resources from core activities, directly impacting business growth.
Solution
Stock replenishment was outsourced to a dedicated supply chain function to enhance efficiency. This involved:
- Defining assortments tailored to store clusters based on shelf capacity and available storage space.
- Assigning replenishment administrators to maintain optimal stock levels, ensuring product availability while preventing overstocking.
A time utilization analysis revealed that category managers’ hours spent on stock replenishment equated to three full-time roles within the 16-person team. By transferring these duties to specialized replenishment administrators, category managers could refocus on high-value activities such as negotiating sales margins and driving strategic initiatives.
Outcome
- Improved stock management led to an overall inventory reduction of 8%.
- Operating costs decreased due to the substitution of three higher-cost category managers with three lower-cost replenishment administrators.
- Category managers were empowered to dedicate their expertise to core business functions, boosting productivity and profitability.
