INDUSTRY

Health and Beauty Retailer

SOLUTIONS

JustEnough Demand Forecasting

JustEnough Replenishment

CHALLENGES

Clicks was utilizing two different replenishment systems that had limited forecasting capabilities in a highly promotions-driven business. This approach led to continuous strain on the business and its users; a great amount of user intervention was also necessary to try to overcome some of the shortcomings of the systems which in the end was not optimum for the business and made maintaining service levels a challenge.

RESULTS

Much improved store availability reducing store out-of-stocks by 40%

Enhanced user experience and efficiency

Improved forecast accuracy

 

Overview

Clicks, a South African-based health and beauty retailer with over 440 stores, is the leading retailer of its kind in the country. Its customers rely on the large selection of products to meet their health and beauty needs and continue to return for the value Clicks provides and its unbeatable promotions.

With over 4 million active ClubCard loyalty program members, it's easy to understand how Clicks is driving profits for its parent company, Clicks Group, which holds additional brands including GNC, The Body Shop and Musica.

Disparate Systems Call for a Change

Clicks had been utilizing two different replenishment systems; one within their warehouse management system that replenished stock from vendors to their distribution centers (DCs) and one within their merchandising system that replenished stock from the DCs to the stores.

The problem with that approach was that they didn’t have one end-to-end forecasting and replenishment system; the two disparate systems were not demand-driven and were backward looking. In addition, there was a lot of user intervention taking place to try to override the deficiencies of the systems. “With those particular systems, there were many people involved in the manual intervention that was required.

The systems weren’t integrated with each other and we were unable to effectively maintain the service and stock levels that the business expected of us,” said Simon Wills, Supply Chain Business Process Manager, Clicks. Additionally, the company’s highly promotional-driven business model made it quite difficult to get the right stock quantity to the right stores at the right time.

“We had a difficult time managing our promotional stock flows,” added Wills. “A significant portion of our sales are driven out of promotions. The manual processes that we were utilizing could not effectively ensure availability during demand increases caused by promotions.”

...we actually showed much improved store availability levels and a reduction in store out-of-stocks by 40%

Simon Wills

Supply Chain Business Process Manager, Clicks
 

A Solution to Drive Business Efficiencies

Meeting business objectives and driving more efficiency within the business meant that Clicks needed to revamp their processes and systems. They were confident finding the right solution would help them to improve their competitive advantage and ultimately increase sales and customer loyalty.

“We did look at some of the other large vendors in the marketplace, but for the most part they were very expensive and difficult to implement and use. Ultimately we selected JustEnough due to the fact that it had the best functional fit, was relatively easy to use and offered good value. The JustEnough Demand Forecasting and Replenishment solutions are part of JustEnough’s end-to-end retail planning solution, so there is also potential to quickly and easily add additional functionality at a later time,” explained Wills.

Clicks took a three-phased and very well-planned approach to the implementation. Starting with a proof-of-concept phase, the company tested the system to ensure it could manage their large volume of store SKU combinations. Following this successful testing, the JustEnough system was implemented for replenishment from vendor to DCs, followed by phase three which was the integrated replenishment including replenishment from DC’s to stores.

“We communicated to the Clicks’ group executive that it would take us two years to complete the implementation, but we actually delivered inside the timelines and finished the whole project within three months of the original deadline. We did not rush the project, we just covered all the right areas - being systems construction, project management and change management - with the right people and expertise,” said Wills.

The Demand Forecasting solution can predict seasonal variations, erratic products and most importantly to Clicks, promotional lift.

Forecasting for the Future

By implementing the JustEnough Demand Forecasting and Replenishment solutions, Clicks now has a modern, automated, accurate, demand-driven planning system. Clicks also now has the ability to forecast promotions into the future with the system automatically ordering stock from the vendors and then moving the stock from the DCs into the stores to meet customer demand. The Demand Forecasting solution can predict seasonal variations, erratic products and most importantly to Clicks, promotional lift.

With more accurate demand-driven forecasts, the company can eliminate lost sales, overstocks and understocks - helping them to better compete in the marketplace. JustEnough Replenishment creates time-phased ordering plans, easing the burden on users that previously had to manually intervene to make up for the shortcomings of the old systems. The solution considers the forecast of demand, current inventory and targeted service levels, making this highly promotional-driven business much more agile and effective.

Healthy Benefits, Fast Results.

With implementation completed months earlier than their timeline, Clicks has quickly benefited from the JustEnough solutions, including their planners. “Making the system as simple to use as possible was obviously an important goal for us. Not only to ensure we achieved the business results we sought, but also because the users had never forecasted on this level before – they previously only used spreadsheet-based forecasts,” said Wills.

“The user experience has been exceptionally good and the planners really enjoy the simplicity of the software.” From a competitive perspective, Clicks expects that the more accurate forecasts from the system will ensure they know what volume of stock is needed when and where and will enable them to work more collaboratively with their vendors.

Since implementation was complete in June 2014, Clicks has already begun to achieve tangible results.

“We were expected to maintain target service levels and availability in our stores, but following deployment of the JustEnough solutions we actually showed much improved store availability levels and a reduction in store out-of-stocks by 40%. It’s incredibly positive for us to see these results in such a short timeframe and now we will go forward and fine tune the JustEnough system to improve upon these results even further,” Wills concludes.