1 million stock items distributed nationwide
From a decentralized solution to a centrally controlled disposition for one million stock keeping units – this change was made by Austrian Post in just six months. It has been achieved with Remira’s logomate inventory management software, which distributes the stock items to the 450 branches and 1,350 post partners nationwide. The introduction of the solution has already reduced stocks by ten percent, while at the same time the availability per item has increased by up to 15 percent. During the entire project implementation, Austrian Post was supervised on site by the Remira sales partner ARBOR Management Consulting GmbH.
Austrian Post not only ensures that letters and parcels are received from the sender to the recipient without damage and on time. Austria’s leading logistics and parcel service provider also offers a wide range of goods for sale, including stamps and packaging materials, including mobile phones, books, CDs and seasonal items. The company manages a total of one million Stock Keeping Units at its two Warehouse locations in Vienna for its 450 stores and 1,350 post partners across the country. Sensitivity is required when the goods are distributed properly. “Our stores and partners sell very different quantities of items,” explains Stefan Nemeth, Head of Philatelie & Assortment Management at Österreichische Post. “While the stores each have around 2,000 products in their range, the postal partners are significantly less than that simply because of their smaller size.” In order to supply itself with the required quantities, each location has so far ordered its goods independently. The management of the product range was the responsibility of the company’s headquarters. “These processes were very time-consuming. In addition, decentralised processing meant that some items had too long ranges of up to 12 months. This has unnecessarily driven up our holdings and tied up a lot of capital,” stefan Nemeth describes. For this reason, Austrian Post decided to centralise its scheduling. For this purpose, a central scheduling team was established in the company headquarters: production control and logistics. The most important working tool of the employees is the newly introduced inventory management software LogoMate from Remira. “The solution comprehensively covers our requirements. In addition, it is intuitive to use, so that colleagues were able to work with it independently after a short introduction phase,” says Stefan Nemeth.
Scheduling at Austrian Post is made in two stages: On the one hand, planned orders for the suppliers are generated on the basis of inventory development in the warehouse and the delivery times of individual item planned orders. On the other hand, the warehouse is dispatched to the branches and post partners. The company manages both challenges with LogoMate. At the heart of digital inventory management is the qualitative sales forecast. It calculates sales trends at the item site level, taking into account sales history, and provides employees with precise planned orders. “In this way, we do not supply our branches according to the watering can principle, but deliver goods purely on demand. Due to the different size of our locations, this is extremely important,” says Stefan Nemeth. The entire standard range, such as stamps, parcel boxes and office supplies, is now automatically dispatched by Austrian Post. The planned orders from LogoMate only have to be checked and released by a dispatcher – a big time saving in the day-to-day business. One-time articles such as magazines, CDs or DVDs that are not reordered distribute the software to the stores according to the sales. The distribution module supports LM push+, which calculates the required quantities of goods using freely selectable parameters. This avoids returnees and residual stocks that can no longer be sold.
Reliable assortment planning
Some suppliers offer better price conditions from a minimum order value. In order to benefit from this, Austrian Post can determine in LogoMate the amount of items to which an order pays off financially. The system then automatically replenishes the orders to the number of pieces required to reach the free-house limit. At the same time, calculating security requirements with ABC/XYZ analysis helps to avoid overstocks or out-of-stock situations. In the analyses, the products are classified according to their share of the company’s turnover and divided into the categories of permanent articles, seasonal goods and special offers. This results in a differentiated picture that enables precise assortment planning.
LM promo+ for action planning
Once a month, Austrian Post publishes special offers of its merchandise. These items must be rescheduled to be available in sufficient quantity during the promotional period. This is achieved with the LogoMate®module LM promo+. Adapted to the respective price group and the promotion history of a product, the module calculates automatically required additional quantities. Because actual purchasing behaviour is subsequently compared with the action plan, special offers can be predicted more and more precisely with the increasing number of calculations carried out. Among the seasonal items, the christmas brand business in particular is of great importance to Austrian Post. Stock-outs in the important Christmas business are absolutely to be avoided. Therefore, the service company works with an annual forecast to calculate the brands. This allows for greater accuracy when ordering the special stamps. “In the past, each store accessed the total stock and gained a buffer for promotional goods. The distribution of the items was not transparent, some products were already sold out during the season,” explains Stefan Nemeth. Due to centralized scheduling, the processes are now much more regulated, and the threat of out-of-stocks is detected before supply bottlenecks occur.
More time for day-to-day business
Since the introduction of the inventory management software, Austrian Post has already reduced its holdings by ten percent – while increasing availability by up to 15 percent. This is due, among other things, to a higher inventory accuracy, i.e. only those items that actually have a need are stocked. As a result, the logistics company was able to reduce both the security stocks and the likelihood of stock-outs. Due to the central handling of the distribution processes, the employees in the branches and at the postal partners also eliminate the time-consuming scheduling effort. You now have more time to get involved in sales, inventory and customer support.