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Over the last couple years, the client was experiencing sharply increasing inventory levels and relatively low inventory turns. Although overall inventory levels were rising, there was too little inventory available at the right place and at the right time for certain items, resulting in lost sales. The client’s demand forecasting methods were proving to be too basic to meet the needs of its growing business. The forecasts did not incorporate variables such as seasonality and promotions. The replenishment decision-making process was a time-consuming process yielding sub-optimal results because of the manual adjustments necessary for seasonality, promotions, and location-specific insights.

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Additionally, the client had specific inventory management requirements given its operational realities that were not fully accounted for in its replenishment processes. For example, a hub-and-spoke system existed among the stores whereby smaller ‘spoke’ stores without backrooms would receive stock from larger ‘hub’ stores instead of the distribution centers. As a second example, certain items were received from suppliers as a given stock set. Some of the items in that standard stock set were demanded much more quickly than others but it was not possible to order those items independently from the entire stock set. The decision of when to replenish stock given the fixed stock set was not optimized.

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Looking to gain control over increasing inventory levels and improve its forecasting and replenishment methods, the client approached Invent.