INDUSTRY

Discount Variety Store

SOLUTIONS

JustEnough Demand Forecasting

JustEnough Inventory Planning

JustEnough Order Planning & Replenishment

CHALLENGES

The Melbro Group was utilizing a dated and highly customized replenishment solution for its retail chain, The Crazy Store, which could no longer support the growth and complexity of its business. The solution in use was many version upgrades behind, was not up to date with best practices, and required manual adjustments and interventions to overcome system shortfalls. This led to slow execution, increased staffing costs, limited flexibility and a lack of proper data to support decision-making. This loss of productivity placed customer service levels, and ultimately medium-to-long term business financial health, at risk.

RESULTS

Double digit sales growth annually

Increased in-store product availability by over 20%

Logistics costs savings

Enhanced replenishment staff productivity and efficiency

Reduced stock ageing and obsolescence

 

Overview

The Melbro Group is an importer of value for money merchandise for sale to the mid-market consumers of South Africa, through retail, wholesale and cash and carry selling channels. The Melbro Group’s retail chain, The Crazy Store is one of the largest discount variety chains in South Africa, offering its customers merchandise across over 40 major product categories including girls and boys toys, stationery, confectionery, kitchen and bar, gifting, pet accessories, hardware, household consumables, party and dress up, fashion accessories, sports and games, Intex Inflatables, braai and outdoor, etc. The smallest Crazy stores carry more than 2,000 products, with up to 5,500 product lines in the largest Crazy stores, and over 7,500 lines in the entire range.

 

The company’s goal is to make The Crazy Store a preferred shopping destination across its product categories by consistently delivering outstanding value products and pleasurable shopping experiences to its customers. The Crazy Store has a footprint of approximately 280 stores, covering nearly every town in all nine of South Africa’s provinces, with 10 stores in Namibia and potential to expand into more African countries.

Outdated Systems Hamper Operations

The Crazy Store had been utilizing a dated replenishment solution which had not been upgraded for an extended period of time. To support the company’s increasing business complexity, a large amount of customization had been developed in and around the legacy system over the years. This high level of customization became a contributing factor, restricting future upgrades being implemented into the business, leading to operational inefficiencies that impeded performance.

“Our business’s demands for the efficient ordering, processing and distribution of merchandise to stores continued to increase and we no longer had a system

capable of doing the job to the required standard,” said Miles Norman, merchandise planning director, Melbro Group.

“Making changes and improvements to the already highly customized legacy system was difficult, if not virtually impossible, without putting the business at substantial risk,” said Norman. “The company’s replenishment and ordering process would run over days. Manual intervention became the norm to combat system deficiencies. These deficiencies were hampering the entire value chain, negatively affecting user productivity and impacting our ability to satisfy customers – effectively compromising the core mission of the company.”

The JustEnough solution best met our requirements, as it could be relatively easily and quickly implemented, addressed most of our current replenishment system’s shortfalls in the base package, and was marketed at a competitive price.

Miles Norman

Merchandise Planning Director, Melbro Group
 

An Upgrade for Advanced Capabilities

The Crazy Store was faced with a number of system inefficiencies, in effect forcing them to conclude they could no longer wait, but urgently needed to implement a new replenishment system. After evaluating a number of solution providers, JustEnough was finally selected based on several key criteria.

“After careful evaluation, we chose JustEnough for our new replenishment suite. JustEnough is well versed in industry best practices on an international level, while at the same time offered the support of a local team,” said Norman. “The JustEnough solution best met our requirements, as it could be relatively easily and quickly implemented, addressed most of our current replenishment system’s shortfalls in the base package, and was marketed at a competitive price. In addition, we like the fact that new modules can easily be added as we may require them, avoiding the risks associated with a “big bang” approach.”

Through the combined efforts of the Melbro IT department, a few Melbro system super users and the JustEnough project implementation team, a complete new ordering and replenishment system was rolled out and operational within six months of initial specification, on time and within budget. This allowed the company to be effectively up and running before the critical peak season replenishment deadline.

The Crazy Store replenishment team quickly got up to speed on the new JustEnough solution. “Our system users were trained immediately after product testing was signed off, and were operational within a week of system availability. JustEnough consultants remained on site for that week to provide training and support, make final enhancements, answer questions, ensure that all our users fully understood the system processes and were able to use the new system functionality” added Norman.

 

JustEnough delivered value to our organization within a very short timeframe, “ said Norman. “Our customer service levels have improved by more than 20% and our company’s age of stock is at the lowest level ever in our history, reducing stock obsolescence, damages and write-off provisions.

Miles Norman

Merchandise Planning Director, Melbro Group

Optimized Replenishment for Better Performance

Following implementation of the JustEnough Replenishment suite, The Crazy Store was equipped to overcome the multiple problems of its legacy system. Functionality from new store ranging and replenishment volume, to new item set up for replenishment to stores, were vastly improved. These ranging and volume improvements in stores are now driven by an improved forecasting engine, enhanced reporting capabilities and the ability to customize store range and volume tools.

Norman says it is hard to single out just one feature of the JustEnough solution that drives the strongest results. “All the features work together to deliver improved customer service levels and financial results. However, the ability to quickly, accurately and efficiently adjust the ranging, volume and seasonality variables at the store/SKU level is very impactful on our business,” said Norman.

“Being able to make range and volume adjustments quickly in response to store or market feedback allows us to simultaneously take advantage of trading conditions and improve service levels to our customers – providing them with what they want, when they need it.”

By using reserve stock functionality, Melbro can now manage and control stock availability in the other sales channels, while still replenishing the Crazy stores, maximising stock efficiencies and availability to all selling channels. The JustEnough solution also allows The Crazy Store to easily plan, set up, manage and calculate promotional and regular replenishment cover and safety stock quantities, which Just Enough seamlessly executes by date control, as part of the standard replenishment ordering process.

Crazy Good Results

The Crazy Store was quickly operational with the JustEnough solution, on time and on budget. They’ve since been able to leverage its advanced capabilities to meet their company goals.

“Being able to order the correct range and volumes of stock, customized to the desired locations at the right time to meet customer demand has improved our customer service levels,” said Norman. “But that’s not all. We’ve seen increased sales revenues, reduced distribution costs and more efficient use of stock. The advances in replenishment speed and accuracy, promotional activity planning and management of seasonal items have all allowed us to take better advantage of store, product and market trends.”

JustEnough assisted The Crazy Store in developing a uniquely integrated promotions and replenishment solution, with low levels of customization to meet its specific company requirements.

The Crazy Store is also using these vastly improved business systems, processes and reporting, to drive value-add and efficiency in other supply chain initiatives.

The Crazy Store has achieved excellent financial results and continues steadily on its growth trend. This can in part be attributed to improved business processes and performance from the JustEnough replenishment system.

“JustEnough delivered value to our organization within a very short timeframe,” said Norman. “Our in-store product availability levels have improved by more than 20% and our company’s age of stock is at the lowest level ever in our history, reducing stock obsolescence, damages and write-off provisions. Our organization’s sales have grown in double digits every year, in a tough and competitive retail trading environment, faced with strong economic headwinds.”