Boosting sales by 34%: how MINII supermarket chain optimized inventory and supply chain operations

MINII, a regional leader in discount retail with over 70 stores, offers a wide range of competitively priced goods, including meat products, fresh produce, dairy, and more. Known for its commitment to affordability and quality, MINII is now a trusted name in the retail sector.

The MINII network used to carry out inventory management in a semi-automated manner:

1. DC to stores for long shelf life product orders were managed using the MIN-MAX system. The variable levels MIN and MAX were manually entered by category managers into the internal ERP system. When the inventory level fell below MIN, the system generated orders to replenish stocks to the MAX level.
2. DC to supplier orders were created manually by category managers in the ERP system and then sent to suppliers.
   
3. Fresh and DSD orders: Store managers either placed such orders over the phone or determined the needed quantity of goods once the supplier arrived.
   

• The order management process required a lot of time and effort from category managers and store managers.
• No transparency or accountability in cooperation with suppliers.
• Difficulties with planning future order volumes.
• No long-term coordination with suppliers.
• Inefficient management of cross-dock orders.
• Inefficient management of DSD orders and Fresh goods.

"We faced significant obstacles in inventory management, including a lack of transparency and analytics on supplier performance. Without metrics such as lost sales and supplier reliability, it was challenging to ensure accountability, leading to inefficiencies in our supply chain," says Saruul Sergelen, CEO of Minii.

After the first standard stage of implementation was carried out, the LEAFIO AI team visited the client in person to train key users on the system, ensuring that the tool works optimally and is customized to the network's individual needs. This visit also provided an excellent opportunity to meet the Minii team in person, visit the stores, and immerse in the company's day-to-day operations.

"We greatly appreciated the hospitality and involvement of the MINII team. We were also impressed by their inspirational attitude, innovative approach, and commitment to development at all levels," shares Anna, LEAFIO AI’s Project Manager. 

In the third phase of implementation, the LEAFIO AI team took on an extraordinary challenge: they had to take additional steps and show flexibility to ensure effective integration with the client's custom internal ERP system, which required an individual approach.

“Although the integration process with LEAFIO AI was not painless because of our in-house ERP, it forced us to review and update many of our critical processes to international standards,” notes Saruul Sergelen.

1. Implementation of system algorithms:
   - CDA (Continuous Demand Analysis)
   - FRESH (Fresh Products Management)
   - DFO (Dynamic Fulfillment Optimization)
   - Cross-Docking
   
2. Testing and improvement of technical components:
   - All technical components of the project were rigorously tested and refined.
3. Order process adjustment:
   - The order process was streamlined, including the automatic closing of orders to reduce the manual workload for managers.
4. Algorithm implementation and data training:
   - New algorithms were implemented, and the system began active data training to further enhance forecast accuracy.
5. Improvement of auto-ordering processes:
   - The auto-ordering process for fresh products was improved, and the integration of auto-ordering for ultra-fresh products was initiated.

Significant improvements in the network’s business processes have been achieved in the first year since implementation. On top of that, there have also been improvements in key inventory management performance indicators and company profitability:

34% increase in sales;

18%  average overstock reduction, which indicates a more balanced stock;

30%  reduction of total inventory days.

The dramatic increase in availability led to a 21% rise in inventory, which boosted sales by 34%.

The LEAFIO Inventory Optimization system enables centralized management of product flow across the entire supply chain, from suppliers to regional/central warehouses, and ultimately to store shelves. This centralization enhances transparency and control over inventory management processes while minimizing errors in the supply chain.

Automating order management through the LEAFIO AI system greatly reduces the time category managers spend on it, freeing them to concentrate on strategic supplier engagement. That is how leveraging LEAFIO AI’s capabilities enables the chain to foster stronger relationships with suppliers, thereby minimizing lost sales and enhancing product availability. Additionally, the system's feature of assigning performance indicators to suppliers and utilizing data on late or incomplete orders for negotiation facilitates constructive collaboration.

"Implementing LEAFIO Inventory Optimization has paved the way for valuable collaboration with our suppliers. Our partnership with LEAFIO AI empowers suppliers to optimize production levels, mitigating costly inventory spikes and drops. LEAFIO AI’s specialists developed an “orders forecast” report specifically for us, which greatly helped in addressing these issues," stated Saruul Sergelen, CEO of Minii.

With LEAFIO Inventory Optimization, the chain can measure lost sales and excess inventory, enabling more efficient inventory management, faster inventory turnover, and lower storage costs.

The LEAFIO AI demand forecasting algorithm utilizes artificial intelligence to precisely evaluate both current and future demand for goods, enabling the chain to effectively plan future order volumes. The system considers comprehensive data including SKU sales history, seasonal variations, promotional activities, and other relevant factors to generate accurate forecasts.

Optimization of fresh and ultra-fresh inventory management has increased sales and reduced waste in these categories. LEAFIO AI Fresh Item Management Software accounts for irregular demand during the week, expiration dates, and delivery intervals throughout the day.

"The collaboration framework facilitated by LEAFIO Inventory Optimization and our supplier portal represents a groundbreaking approach within our market. This innovative supply chain collaboration not only enhances our operational efficiency but also holds the potential to accelerate a positive impact across the entire industry," affirmed Saruul.