Optimization of warehouse inventory and orders to suppliers for Sklepy Komfort
- Client:
- Sklepy Komfort S.A.
- Duration of cooperation:
- October 2022 – present
- Industry:
- home & decor
Sklepy Komfort S.A. is a Polish company operating in the home & décor industry. It is a market leader in flooring, doors, and bathroom and kitchen furnishings, with a strong reputation built primarily on a comprehensive product offering. The brand’s assortment also includes other product categories such as rugs, decorations, wardrobes, as well as installation and floor care accessories.
The retail network comprises 160 brick-and-mortar stores and its own online store. Sales are also conducted through popular marketplaces and in a B2B model.
Background
and challenges
The supply chain at Sklepy Komfort S.A. is centrally managed for approximately 98% of all products. The company operates a single central warehouse where goods from suppliers are received and subsequently distributed to brick-and-mortar stores.
Additionally, in 20–30% of cases, products are delivered to a cross-dock facility, where inbound shipments are broken down and redistributed to individual retail locations.
Stock is maintained in the warehouse for a por-tion of the assortment-specifically, for permanently listed items that are readily available to end customers. The average inventory turnover at the warehouse is 71 days, with 60% of products exhibiting low turnover rates.
Orders to suppliers are placed based on sales estimations, carried out by a team of 10 Purchasing Specialists. Sklepy Komfort S.A. collaborates with suppliers from Europe (including Poland), Asia, and North America. Depending on geographical location and other factors, including logistical minimums, lead times from suppliers vary, with some exceeding 6 months.
Furthermore, in the case of orders from Asia, there is a need to fill containers in order to optimize transportation costs. However, this results in the supplier having control over which orders, in what quantities, and when they will be fulfilled. This, in turn, creates significant uncertainty regarding the delivery time to the warehouse.
Goals and directions
of change
The company’s management was seeking a solution to optimize orders to suppliers by utilizing demand forecasts, ultimately ensuring optimal inventory levels. It was crucial to consider the limited warehouse space, the large share of slow-moving products in stock, and the long lead times from suppliers.
The optimization was expected to bring benefits such as:
- reducing out-of-stocks in the warehouse,
- shortening the waiting time for products for end customers,
- reducing the stock of slow-moving products.
For Sklepy Komfort S.A., inventory optimization was even more critical as plans were underway to increase warehouse space and expand the product range, including items for which stock would be maintained in the warehouse.
Implementation
of Occubee
The achievement of the company’s main goal – optimizing inventory levels – was made possible through the implementation of the Demand Management module within the Occubee system. This module includes three key components: demand forecasts, warehouse demands, and orders to suppliers.
By leveraging machine learning models to generate demand forecasts for various product categories and sales channels, the system was able to account for the unique characteristics of each. At the same time, self-learning models enabled the identification of sales trends and the fluctuating (seasonal) demand for specific products. Planners can modify forecasts by applying adjustment coefficients.
During the system configuration phase, the process for generating warehouse demands was parameterized according to the client’s specifications. Inventory stocking strategies were applied, considering different levels of safety stock, namely minimum, optimum, and maximum inventory levels.
Based on demand forecasts and inventory requirements, the system generates orders to suppliers, which are automatically loaded into the ERP system.
Benefits and impact
on Client’s business
The implementation of the Demand Management module at Sklepy Komfort S.A. has brought positive results in optimizing inventory levels, as well as in the warehouse inventory management and supplier ordering processes.
In the first year of using Occubee, the inventory turnover cycle was reduced by 5 days, from 71 to 66 days. From the perspective of capitalizing inventory in the warehouse and at sales points, which amounts to approximately PLN 80 million, this translates into the release of around PLN 5 million in capital. At the same time, the company maintained a high inventory availability level of over 90%.
Based on advanced predictive models and machine learning algorithms, the system generates demand forecasts, which the client finds satisfactory, especially considering the high market volatility. The accuracy of forecasts for key product categories, such as LVT panels and carpets, remains stable, exceeding 90%. Importantly, the company’s team shares forecasts with suppliers, allowing them to secure product deliveries in advance, which positively impacts their collaboration.
Occubee significantly streamlines the work of supply chain managers. By automating the purchase order generation process, it eliminates human errors that previously occurred, such as those during the export of Excel files. Moreover, planners now have access to new data, including AI-based forecast results, turnover reports over time, and planned out-of-stock situations in the warehouse, enabling them to act proactively. The knowledge and experience of the experts responsible for key business areas at Sklepy Komfort S.A. are utilized in making final business decisions, as they are the ones who verify the orders generated by the system.
Thanks to the automation of processes with Occubee, we have gained the potential to improve the productivity of purchasing processes, which translates into a tangible saving of working hours. Personnel changes had previously posed a significant problem, as training a new specialist took a considerable amount of time. Today, thanks to Occubee, this risk has been minimized. With access to the results generated by Occubee, those responsible for purchasing can replace a colleague from another department who is absent on a given day with minimal time investment. This was previously more challenging.
– says Krzysztof Niciejewski, Supply Chain Director at Sklepy Komfort S.A.
Synergy in inventory management
Sklepy Komfort S.A. currently uses two modules of Occubee: Replenishment and Demand Management. By integrating both modules, synergy has been achieved. How does it work?
Orders to warehouses from suppliers take into account the stock levels in stores, allowing for smaller quantities of goods to be ordered to the warehouse.
The system ensures that, in line with the forecasted sales, the stock remaining in stores will meet the demand until the next delivery, thus preventing product shortages in stores.
This synergy allows for ordering products from suppliers in the right quantities, avoiding overstocking and freezing excessive capital in inventory.
Key results at a glance
