Toy House is the largest toy retail chain in Ukraine. It dates back to 1992, when the company first began selling toys in a kiosk, and nowadays, it has 65 stores and an online store. Retailer presents in 18 major cities across Ukraine, offering 50 000 unique toys on average.
National Toy's retail leader partnered up with Leafio in order to free up capital for further growth through better stock management, forecasting accuracy increase, process efficiency optimization, and order generation automation. We have taken on the challenge.
The challenge: how to keep the leading positions among retail companies?
People, of course, are the key, the same as in every business. But without automation and defined business processes, it would be impossible to stay efficient in this highly volatile market. Working in a fast-paced environment, a business must keep its eyes wide open to stay competitive. That's why Toy House's management decided to automate as much as they could, including the registers, online store, and warehouse operations. They were particularly focused on efficient inventory management. One of the stages was the optimization of the stock with the following objectives:
«Numerous retail locations that carry a high volume of products cost us a fortune. That’s why we partnered up with LEAFIO and implemented their Inventory Optimization software. We've been using this software for about four years now, and we're delighted with the results», — said Vlad, Toy House co-founder.
The inventory management department the department needed streamlining too. Each manager used to handle 5-7 stores on average. It was actually all managed in Microsoft Excel as the team had to maintain order schedules, form orders to the suppliers and warehouses, and manage internal distribution. It was a very labor-intensive process, and specialists were often short on resources. The business has distinct seasonal trends as the demand, sales, and assortment explode during the New Year holidays. But the number of lines in Excel has a limit. So a new tool was needed.
Process of implementation
Having correct and scalable processes in place gives many business opportunities. The software is not a miracle, and it will not start printing money just because I pressed the button. Project work only if the vendors and team of retailers work as a whole: dive into current processes, implement the methodology of the solution, configure the algorithms… It is critical to have a positive holistic outcome in such a project because everyone is a winner in the supply chain only if the customer buys the product sourced from the supplier.
The vendor`s implementation team took the time to understand the business processes, enhance, optimize and automate. So they took care from the very beginning until the implementation was completed. After that, the LEAFIO customer success team took over, and it has continued to support Toy House for four years now. LEAFIO continuously enhances its product with new features. They listen to feedback from retailers, help with configurations, set up new reports that have direct business value and are always on top of things with new releases and onboardings.
«Well, honestly, I have no idea how they manage their sleep since they are on the call 24/7. The guys are very involved in the process. Initially, they did an extensive discovery phase before the project began», — Vlad.
The results of optimizing inventory management
Originally, Toy House has defined business goals. Just because inventories are the single biggest investment and availability at the stores is critical, we have prioritized them as follows:
- Improve Service Level
- Improve product turns
- Get rid of overstock
All of the goals have been reached, and the company continues to improve its performance in every way. The project brought such results as:
- Full order generation automation;
- Structured order schedule;
- Transparency of order placement;
- Supplier Reliability Assessment and reporting;
- Assortment management and optimization;
- Analogs management;
- Seasonal demand fluctuation management;
- Robust analytics and reporting throughout the entire supply chain.
For instance, we have significantly reduced overstocks and improved availability on the shelves. Of course, our customers have noticed the change, and we know it. We are now able to keep the promises we give to our customers, and they can always find the products we declare. I think that this would not be possible without the backbone - efficient automated processes of sales forecasting, promotion management, seasonality, and keeping the service levels. Our supply chain has become a solid foundation for our marketing and online retail to ensure steady revenue for the business. To conclude - it is very important to choose the right automation partner since the entire project can either make you or break you.