Streamlining Inventory Management to Achieve Remarkable Sales and Turnover Improvements

Before implementing the inventory management system software, iStudio faced the problem of unbalanced stock and the lack of an assortment matrix in the accounting system. All orders in the network were formed semi-automatically using an accounting system and Excel. The assortment was determined for each order based on suppliers’ residuals in manual mode. This approach to order formation required a lot of time and caused inevitable errors due to the human factor. A surplus of low-margin SKUs and frozen capital in goods hindered network growth and scaling. The company needed to change its business processes and optimize inventory throughout the network.

The main goals of the LEAFIO Inventory Optimization implementation project in the iStudio network were:

• Reducing excess inventory and optimizing the assortment;
• Improving turnover rates;
• Order automation;
• Assortment management automation.

At the initial implementation stage, a thorough analysis of business processes in the iStudio network was performed. The data from the customer’s inventory system was integrated with the LEAFIO solution. Before the launch, the implementation team held training sessions on the LEAFIO Inventory Optimization functionality for the store network employees. Later on, all of the main product categories were connected to the inventory management system. The system manages about 9,000 SKUs.

In the course of implementation, LEAFIO AI was adapted to the requirements of the network, and processes were set up:

• Buffer calculation (target stock level at each storage point) for each SKU;
• Set up daily auto-orders and send it to the central warehouse with the formation of cross-docking orders, depending on the schedule agreed with suppliers;
• Daily review of the size of the buffer for goods that are managed by the system and, if necessary, recommendations are given for changing buffers;
• Tracking orders that are delayed or in transit because they affect the number of subsequent orders;
• The ability to flexibly analyze key indicators with retail BI analytics in real time is implemented.

The joint work of LEAFIO AI and iStudio resulted in the following:

• Automated order process;
• The inventory management process has become more transparent;
• The stock in stores is formed taking into account the dynamics of sales;
• Sales increased by 57% (with inventory growth of 27%);
• The inventory turnover rate improved by 36%;
• Overstock inventory was reduced;
• Overstock is automatically redistributed to stores according to demand;
• Significantly reduced the time for manual labor of all inventory processes.