Case Studies

March 2013

Massive Overstocks & Out-of-Stocks

Discovered
Thru Visibility and Big-Data Analysis

CHALLENGE:

A national retail chain with over 4,000

stores couldnt determine where they were
overstocked or out-of-stock on their popular
reading and sunglasses

RESULTS:
PCG Identified $25 million inventory reduction opportunity
from improved management of inventory and ensuring best-sellers
were in-stock in all planograms providing foundation for store-level
ordering
Sales increase estimate of $5-8M annualized from improved
PCG
developed voids
a systematic
processout-of-stocks
that supports efficient analysis
distribution
and reduced

of over 1,600 items in over 4,000 locations that have 8-12 attributes
Both retailer and supplier can now view the same comprehensive
analysis that was previously impossible
WIP moving to scan-based trading using store-level replenishment
Sell More Stock Less See Everything

Sales Up 8%
With Visibility, Store-Level Replenishment, & Big Data
Analysis
CHALLENGE:
A large, national dairy lacked visibility to instore performance and was not using actual
consumer demand via point-of-sale data to
create replenishment orders. They also
suffered from high out-of-stocks, and high
returns (dumps).

SOLUTION:

Park City Group analyzed big data and using the results
coupled with store-level replenishment, they were
able to match delivery to actual consumer demand
improving overall performance

RESULTS:
Sales dollar trend Year over Year improved
by 8%
Sales units trend Year over Year improved
by 9.3%
Sell More
Stock been
Less Seecut
Everything
Out of stocks
have
by 50%

Cross Docked SLR Reduces Out-ofStocks

Cross Docking Store Level Replenishment: Supplier

CLIENT:

Exclusive supplier of quality

products to a club warehouse
retailer using a brokerage model

SCOPE:

The supplier wanted to use direct consumer demand

to generate warehouse level replenishment orders for
a select group of items

Warehouse level orders needed to pass through the

Club Depots leaving no on hand inventory at this
location

RESULTS:
Warehouse inventory levels to be balanced and
Utilizing
Store Level replenishment coupled
returns PCG
reduced
with warehouse VMI, the supplier has been
successful in improving in stock positions
Returns have been greatly reduced

Program is being expanded to add items from

the initial supplier as well as other suppliers also
serviced by this
broker
Sell
More Stock Less See Everything

Sales up 11%; Returns Down 40%;

Out-of-Stocks Down 22% Vendor Managed
Inventory: Through Distributors
CLIENT: National Craft
Brewerof seasonal and year
Leading brewer
around craft beers that does not own
distribution network

SCOPE:

Distributors ordering in random fashion resulting in high

returns

Many highly seasonal products with short lifecycle

Developed Freshest Beer Program in improve quality

to consumer

RESULTS:
Need for increased control of inventory levels at 400+

national
distributors
Gained
control
of ordering process and reduced
returns by 40%
Reduced out-of-stocks at the distributor level by
22%
Increased sales through the distributor network
by 11% in the first 12 months
Improved delivery of seasonal products to reduce
Sell More Stock Less See Everything

Efficiently Scaled to Meet Demand and

Saved Millions
DC
Procurement
using DemandRetailer
Forecasting and ABC
CLIENT:
BestinClass
Analyzer
Collaborative data sharing can achieve these types of results. Were looking
forward to expanding this program beyond the warehouseto Direct Store Delivered
suppliers.
Supply Chain Executive, Best-in-Class

CHALLENGE:

The current ordering system didnt support ordering from multiple

distribution centers
All products were being ordered without regard to how fast they
were selling, or how much stocking space existed, creating
inconsistent stock conditions and resulting in lost sales and
overstocked slow moving items

SOLUTION:

Best-in-Class implemented PCGs computer-aided

ordering system including the ABC Analyzer feature
coupled with PCGs consulting

RESULTS:

Reduced inventory quantities by 1/3

Reduced inventory costs by $170 million across
Grocery, Dairy, Frozen, GM and HBC departments (over
6 full operating years)
Reduced safety
Sell
More Stock
Less in
See
Everything
stock
by 55%
the
Grocery

Out-of-Stocks Reduced by 15%; Smoothed Demand

Demand Planning

CLIENT:

S. Lichtenberg & Co. (Sheer

As a leading manufacturer
Curtains) of private label curtains & draperies we

needed to be able to cope with our customers random demand

and manage situations where demand doesnt behave consistently.
PCGs demand planning solution enabled us to reduce stock outs and
inventory at the same time. The solution has a lot of bang for the
buck and their customer service is outstanding.
Scott Lichtenberg, President / Owner

CHALLENGE:
Each customer had different replenishment
requirements (safety stock, forecast, etc.) and
tons of information. Data from disparate
sources made planning difficult.

RESULTS:

Reduced out of stock conditions by 15%; reduced inventory

levels by 15%
Able to maintain better in-stock conditions on high-demand
items
Better able to manage
the
different
demand
conditions of
Sell More
Stock
Less See
Everything

EXAMPLE: Store-Level
Replenishment
In
Dairy
CHALLENGE:
A large, national dairy lacked visibility to instore performance and was not using actual
consumer demand via point-of-sale data to
create replenishment orders. They also
suffered from high out-of-stocks, and high
returns (dumps)

SOLUTION:

Using a scan-based trading go-to-market strategy

coupled with PCGs store-level replenishment
solution, they were able more closely match delivery to
actual consumer demand

RESULTS:
Sales dollar trend YoY improved by 8%
Sales units trend YoY improved by 9.3%
Out of stocks have been cut by 50%
Returns have been cut by almost 50%
8

Sell More Stock Less See Everything

Sales Increase 3x, Returns Decrease

50%
Using Scan-based Trading & Store-level Replenishment in Dairy
Case
CHALLENGE:

Direct head-to-head Comparison

A national mass market retailer doing
SBT recently studied two suppliers to the
dairy case. One used only scan-based
trading (SBT). The other used the entire
suite of Park City Group SBT solutions,
including store-item level analysis and
ordering. A pre/post test analysis
showed incredible results.

RESULTS:
The supplier using Park City Groups entire suite

Increased sales three times more (8%/Supplier A

to 2.5%/Supplier B)
than the SBT-only
Reduced waste (product returns) 50% more
supplier
Sell More Stock Less See Everything

Sales Trend Up 7%, Returns Trend Down 20%

Using DSD Visibility & SBT in Commercial Bakery Category

CHALLENGE:
Mid-Size, Mid-western Regional Retailer
wanted to increase sales and reduce outof-stocks in their commercial bakery
department

SOLUTION:
Analysis showed out-of-stocks, returns in excess of industry
norms, and sales opportunities by store, by SKU. Spacetosales planograms were developed, vendors were score-carded
and performance improved. The PCG process became
integrated into their category strategy. Success is providing
basis for expansion into another category.
RESULTS:
INCREASED SALES dollar trend by 6.9% even
though total grocery sales were trending down
REDUCED RETURNS by 20%
Program expanded
10

Sell More Stock Less See Everything

Day of Week Sales Trends up 45% in Snacks

Using Scan-based Trading / Store-Item Analysis in Snacks

CHALLENGE:
A large, regional retailer had huge
holes on the shelf where the favorite
snack chip products had sold out,
but only on certain days.

SOLUTION:
Using a SKU analysis approach with scan-based data,
changing the strategy to deliver and stock based on
heavy consumer demand days solved the problem and
increased customer satisfaction

RESULTS:

Sales Trends increased by 45%

11

Sell More Stock Less See Everything

Shrink is nearly 70% Less using Park City Group

Scan-based Trading

We run significantly lower shrink when the retailer is a

PCG partner, versus our other SBT retailers who do not
have a relationship with PCG. With synchronization, all
pricing and promotional errors are identified before the
fact rather than after, virtually eliminating the tedious
task of identifying and resolving these issues. SBT
Operations Director, National Commercial Bakery

Shrink %
$/Inventory
0.5
0.4
0.3
0.2
0.1
0

14.00%

Shrink
averages
three times
higher
without PCG

12

Sell More Stock Less See Everything

45%

Shrink Reduced by 44% in Dairy

Using Scan-based Trading, PCG Analysis & DSD Visibility

CHALLENGE:

This dairy supplier to a large,

regional retailer was recording
high waste
SOLUTION:
PCG analysts reviewed the stores with high shrink and
identified several process issues. Returns were not being
captured and reported; and some items were not scanning
accurately. Both created lost revenue for the Dairy and high
shrink for both retailer and supplier.
RESULTS:

13

Shrink managed down by 44% and

maintained in dairy industry average range of
1-2%, by following PCGs process guidance
and using PCGs SBT and analysis tools
Product returns are down by 30% by using
PCGs VisibilitySell
tools
More Stock Less See Everything

Shrink Reduced by 44% in Dairy

Using Scan-based Trading, PCG Analysis & DSD Visibility

CHALLENGE:

This dairy supplier to a large,

regional retailer was recording
high waste
SOLUTION:
PCG analysts reviewed the stores with high shrink and
identified several process issues. Returns were not being
captured and reported; and some items were not scanning
accurately. Both created lost revenue for the Dairy and high
shrink for both retailer and supplier.
RESULTS:

14

Shrink managed down by 44% and

maintained in dairy industry average range of
1-2%, by following PCGs process guidance
and using PCGs SBT and analysis tools
Product returns are down by 30% by using
PCGs VisibilitySell
tools
More Stock Less See Everything

Sales Up 3%, Returns Down 5% for Bread Suppliers

Using Category Analysis & Change Management in Commercial Bread Category

CHALLENGE:
Bread sales were stale. Product returns were
exorbitant. Consumers were unhappy, and so
was the Retailer.

SOLUTION:

PCGs analysis conducted as part of a collaborative project with the retailer and
the entire bread category showed out-of-stocks, returns in excess of industry
norms, and sales opportunities by store, by SKU for each bread vendor. Space
to-sales planograms were developed and schematics were adjusted. One
vendor got more space, another expanded distribution, and yet another was
able to right-size their brand mix. This collaborative approach used the same
objectives, metrics for measurement and results in discussions to resolve
issues that supported productive business meetings.

RESULTS:

15

INCREASED SALES by 3% even though bread sales ROM were

down
All bread suppliers
roseby
to5%
thegiving
challenge
and gainedfresher
sales, product
REDUCED
RETURNS
the consumer
reduced returns and the consumers were rewarded with
fresher bread
Business meetings
became
more
Sell
More Stock
Lessproductive
See Everything