Improve inventory management Wehkamp

By | Casestudys, Retail

What did the customer want:

wehkamp.nl encountered challenges in reducing working capital and stock levels while the availability of products remained unchanged. The aim was to improve internal processes and prevent unnecessary investments in distribution networks.

We took into account the following context:

  • Availability on the following day is extremely important for the business model.
  • Mixed procurement NW Europe versus Eurasia.
  • Physical limitations in the network, demanding non-profitable investments if they were not averted.

What was our approach?

  • Short quick scan and design phase to determine approach and improvement potential.
  • Agile, hands-on approach that is result oriented, and in collaboration with management and employees.
  • Weekly stand-ups with direct feedback on improving the results.
  • Focus on the largest suppliers to provide (short-term) evidence for this way of working.
  • We supported teams with data analysis to improve decision making.
  • Multiple preconditions for improving the sustainability of the solution (KPIs and incentives, organisation design, management style, supplier management, etc.)

What have we achieved?

  • In just 3 months, time stocks and working capital were reduced to 25%, the stock turns improved to 60%. The lost sales and operating costs remained unchanged.
  • The incoming receiving capacity in the distribution center improved by 35%.
  • Development of supplier performance monitor.
  • Improved collaboration between sales and operations.

What did the customer think:

“Refreshing, practical approach, with clear results. An advisor who does not only do what the client organisation wants to achieve, and thereby finds a whole new angle of approach.”

Step change in product availability Intertoys

By | Casestudys, Retail

What did the customer want:

Intertoys had to contend with poor product availability, which led to a significant loss of sales. The aim was to increase the availability of DC stock from around 50% to over 80%. The company wanted to achieve this before the start of the high season in the autumn, without increasing the total inventory levels.

What was our approach?

  • Intertoys’ assortment, together with the category management team, validated and sorted in order to identify a regularly refillable assortment.
  • Along two tracks – data quality and merchandise planning – we developed quick wins and a sustainable improvement of tools and processes to complement the right assortment with the right stock levels.
  • Development of a commercial approach to sell surplus stocks at minimum price discounts.
  • Merchandising planners trained in their new roles.

What have we achieved?

  • Availability of the DC stock rose from around 50% to over 80% over a period of about three months.
  • Increased data quality to enable a more streamlined operation.

What did the customer think:

“In a dynamic retail context, we wanted to improve the availability of the DC stock and to develop a reliable replenishment process. The IG&H approach helped us to combine quick wins with sustainable improvements in product availability and stock levels. IG&H provided the right structure and transparency for our activities through the implementation of every step of the project “

Optimalisation of a distribution centre for a large Dutch retailer

By | Casestudys, Retail

What did the customer want?

For a large Dutch retailer, the DC (distribution center) is essential. Keeping logistics costs manageable guarantees competitive prices, happy customers, and a competitive position. Our customer’s current DC is no longer sufficient, but which products will we put in the new DC, and how, and why? For the best results, we will make these decisions based on hard facts and data so that we can optimally focus on the DC.

What was our approach?

A dynamic model that determines the optimal allocation in real time, for every situation. We have built an advanced Linear Program that optimally allocates all SKUs within the DC. This optimum is determined on the basis of costs (hourly wages & productivity, return percentages, turnover rate, etc.) but also, for example, capacity and the characteristics of the SKUs. All input is fully customisable so that infinite scenarios can be compared.

What have we achieved?

On the basis of the most recent data and desired adjustments, S & OP can optimally set up the DC. S & OP not only has the tools to optimise the current situation, but can also use it for future changes. Capacity problems are already clear in advance because predictions, in combination with the tool, can determine the ideal DC of the future.

What did the customer think?

Practical logistics experts. Good balance between concepts and practical applications.

Strategic frameworks for structural renewal of the product range for non-food retailer Blokker

By | Casestudys, Retail

What were the client’s needs:

Clear strategic framework for a structural implementation of a new product range:

  • Addressing the customers’ needs by a structural review of the current product ranges and by adding products that are lacking.
  • Improving the price perception of the customers by rolling out a clear price strategy based on dynamic prices.
  • Expansion of the own brand product range for an attractive margin, realising the quality promise, and giving a price signal to the market.

What was our approach?

  • Design and execution of a category briefing process for a structural review of product ranges based on reviewed category roles and a uniform structure of the customer decision tree.
  • Setting up a process for the identification, assessment, and execution of product ranges that are lacking.
  • Creating a clear and dynamic price strategy which has been further developed into price guidelines that can be implemented for every established price category.
  • Optimising the own brand policy, established at product group level with clear guidelines for the implementation of the private label product range.

What did we achieve?

  • Demonstrated and structural category briefing process in which strategy, format, category, management, and shop experience are all combined to develop a clear renewal of the product range.
  • Clear price strategy that can be implemented, structured up to SKU level
    Optimised private label policy which gives direction for the implementation of the own brand product range.

Omnichannel distribution network design Blokker

By | Casestudys, Retail

What were the client’s needs:

Due to crucial organisational changes, increasing online sales volumes, and continuous developments in the commercial propositions and product range, there was an apparent need to restructure the distribution network in order to:

  • Accelerate the desired commercial proposition.
  • Support the omnichannel fulfilment ambition (for example with entirely interchangeable online/offline distribution channels, shop pick-up, shops storage).
  • Improve the efficiency, costs, and capacity of the distribution centre.

What was our approach?

  • In collaboration with the management, we established the scale of the commercial proposition in order to facilitate it by deploying the new distribution network (e.g. the number of SKUs, channel mix, product features).
  • Development of a growth model for logistic volumes
    Assessment of the current distribution structure, identification of problems/bottlenecks, and the execution of a fit-gap analysis with the growth model.
  • Development of future warehouse layout, automation options, detailed processes, and IT/WMS requirements.
  • Development of the business cases for every scenario, including the required investments and reduction of costs.
  • Facilitating boardroom decisions.

What did we achieve?

  • We developed a solid omnichannel concept for the distribution centre where inbound, storage, and picking activities for online and offline flows are integrated and supported by automated processes.
  • Substantial cost reduction of 18-20% on the total distribution costs.
  • The distribution centre has been structured in such a way that it will not just facilitate the current commercial ambitions but also those in the future.

What was the client’s experience:

“IG&H pools thorough logistic expertise and combines this with a pragmatic approach for an effective decision forming process based on facts.”

Acquiring own Data Science competencies

By | Analytics, Casestudys

What were the client’s needs?​

Over the past few years, our client, a leading logistic service provider with 30,000 customers, has centralised its BI function and taken major steps in Data Management. With a view on the increasing speed of technological developments, the need to innovate, and the utilisation of its data assets, we received the request to assist the client with the structure of a Data Science Team. IG&H already demonstrated the added value and potential of Data Science in previous projects.​

What was our approach?​

Data Science is a team effort. A Data Science team includes a range of competencies and areas of expertise and thus various functions such as a Data Scientist or Data Engineer. The team interacts with other teams within a company, such as BI, IT, Marketing, or Sales. Building up and integrating a new team within an existing organisation has a significant impact and faces many challenges. ​

IG&H has its own experience in this regard during the implementation of our Analytics practice. Supported by the best practices that we developed during this process, we were able to assist the client in compiling their own Data Science team.​ In addition to structuring the team, we also focused heavily on the collaboration with other teams and on the management of the new team.

What did we achieve? ​

In a period of 3 months, we have laid the foundation for a new competency that adds value to the organisation right from the word go. This enables the client to lift its provision of services to a higher level and, even more importantly, to remain competitive and relevant in a rapidly changing market.​

Boosting 8% revenues by aligning customer needs and assortment via >330 new floorplans

By | Casestudys, Retail

What the customer wanted

Matching customer needs to the products offered in the store:

  • The current store formats were not in line with the needs of the typical customer of this non-food chain
  • There were limited smart data insights on shelve performance

What we did

  • Built a data system to measure shelve performance on various metrics (revenue, margin, quantity sold per m3).
  • Developed a smart grid to create logical “assortment building blocks” to design a store.
  • Used a sorting algorithm (based on shelve performance) to define >330 store specific floorplans, including:
    • Formula strategic guidelines on specific ‘core’ assortment groups
    • Geographical aspects of store (proximity of competitors)

What we achieved

  • Enabled the non-food retailer to transform >300 stores to a store where the customer can find its products again – with expected benefits:
    • 7% more customers
    • 8% revenue increase
    • 11,5% margin improvement

What the customer said

“IG&H really understood our Retail business and what was needed to transform our stores to the right set up for our customers. Using both smart analytics and understanding of our retail systems and tools they really delivered great output. Without IG&H, we would not have been able to transform our stores in the right layout format on time” – Bas Verheijen, Director Marketing & Formula

Omnichannel distribution network design

By | Casestudys, Clientcases | No Comments

What were the client’s needs:

Due to crucial organisational changes, increasing online sales volumes, and continuous developments in the commercial propositions and product range, there was an apparent need to restructure the distribution network in order to:

  • Accelerate the desired commercial proposition
  • Support the omnichannel fulfilment ambition (for example with entirely interchangeable online/offline distribution channels, shop pick-up, shops storage)
  • Improve the efficiency, costs, and capacity of the distribution centre

What was our approach?

  • In collaboration with the management, we established the scale of the commercial proposition in order to facilitate it by deploying the new distribution network (e.g. the number of SKUs, channel mix, product features)
  • Development of a growth model for logistic volumes
  • Assessment of the current distribution structure, identification of problems/bottlenecks, and the execution of a fit-gap analysis with the growth model
  • Development of future warehouse layout, automation options, detailed processes, and IT/WMS requirements
  • Development of the business cases for every scenario, including the required investments and reduction of costs
  • Facilitating boardroom decisions

What did we achieve?

  • We developed a solid omnichannel concept for the distribution centre where inbound, storage, and picking activities for online and offline flows are integrated and supported by automated processes
  • Substantial cost reduction of 18-20% on the total distribution costs
  • The distribution centre has been structured in such a way that it will not just facilitate the current commercial ambitions but also those in the future

What was the client’s experience:

IG&H pools thorough logistic expertise and combines this with a pragmatic approach for an effective decision forming process based on facts.

Data Driven Customer Retention Strategy

By | Casestudys

What our client wanted
Our client, a financial service provider, required factual insights into their customer retention strategy.  A successful customer retention strategy not only relies on predicting which customer will churn at what moment, it also provides a deep understanding of the mechanics driving this event. This allows our client to optimize future customer experiences on an individual level, increasing customer satisfaction and reducing churn.  

What we did
We established a definition of customer churn that defines the moment of outflow of capital, based on a combination of savings depletion, transactional inactivity and account closure. We extracted features to create a complete picture of each customer based on personal characteristics (e.g. age, location), activity in the online banking environment, transactions (type, volume, frequency) and market information (e.g. competitiveness of interest rates). Before starting the analyses, we sanitized the data using robust statistical outlier detection methods. 

While machine learning-based churn models, such as random forests and support vector machines, can capture nonlinear data, they typically yield poorly interpretable results. Classic methods, such as logistic regression or linear support vector machines, are easier to interpret, but cannot capture nonlinearity. However, we found a way to tweak linear models using I-splines so that nonlinear events are still captured and can be properly interpreted. I-splines fit polynomial functions to several subintervals for each variable. Customers that have features in multiple subintervals with an increased risk, adhere to the risk profile and can be targeted with marketing actions.  

What we achieved
We provided our client with essential insights into their customer churn. Combining risk-zones for savings volumes, transactional (in)-activity and app usage we were able to identify an at-risk subpopulation of customers. Using the results of our analysis, our client has started to increase customer retention in a focused manner. 

What they said
“We have enjoyed working with IG&H. We were really on the same wavelength, without any need to explain where our challenges lie. The results of this investigation are interesting, especially because the results are practically applicable, adding concrete business value.” 

Predicting sales using data

By | Casestudys, Clientcases

What they wanted
For our client, a large non-food retailer, promotional folders are essential: a significant revenue share originates from folder products. But sales forecasts were on average off by 100% (volume weighted MAPE) resulting in excess stock, tied up working capital, sharply increased operational complexity and added discount pressure. Our client wanted to move away from an opinion and anecdotal-evidence based forecasting system toward a rigorous historical data driven estimate.

What we did
Using our proprietary data engineering algorithms we started by unifying data from 35+ disparate data sources into an automated and centralized database with a complete end-to-end product level view incorporating 100+ product characteristics, e.g. size, color, and type.

Using our database structure we deployed a collection of gradient boosted regression trees and additional statistical techniques to make product-level predictions of folder sales. We improved forecast accuracy by 60 percentage points. Key predictive variables were seasonality, markdown amount, price, article category and location of the product within the folder.

What we achieved
Given the significant improvement in forecast accuracy, our algorithm was implemented in core business processes. Today, roughly 80% of our model forecasts are used as a final sales estimate. Because of this, the supply chain management team can focus its attention on the remaining forecasts where the math just doesn’t cut it. In these predictions the value is provided by retail sector insidership and other unique human insights.

Our applied combination of human expertise and mathematical precision results in a reduction of 22% in handling complexity, a 20% reduction in excess stock, and – most importantly – the start of a data driven culture.

What they said
“This is pure gold.”