This article was first published in the Winter 2014 issue of Speak
Clicks is a South African-based health and beauty retailer with over 440 stores. Its customers rely on the large selection of products to meet their health and beauty needs and continue to return for the value and unbeatable promotions that Clicks provides. With over four million active ClubCard loyalty programme members, it’s easy to understand how the retailer is driving profits for its parent company, Clicks Group, which holds additional brands including GNC, The Body Shop and Musica.
Clicks had been using two different replenishment systems – one within its warehouse management system that replenished stock from vendors to their distribution centres (DCs) and one within its merchandising system that replenished stock from the DCs to the stores. The problem with this approach was that it didn’t have one end-to-end forecasting and replenishment system; the two disparate systems were not demand-driven and were backward looking.
“We had a difficult time managing our promotional stock flows,” says Simon Wills, supply chain business process manager at Clicks. “A significant portion of our sales are driven out of promotions. The manual processes that we were using could not effectively ensure availability during demand increases caused by promotions.”
To improve its competitive advantage and ultimately increase sales and customer loyalty, Clicks needed to revamp its processes and systems.
“Ultimately we selected JustEnough due to the fact that it had the best functional fit, was relatively easy to use and offered good value,” says Wills. “The JustEnough Demand Forecasting and Replenishment solutions are part of JustEnough’s end-to-end retail planning solution, so there is also potential to quickly and easily add additional functionality at a later time.”
Clicks took a three-phased approach to the implementation. Starting with a proof-of-concept, the company tested the system to ensure it could manage its large volume of store SKU combinations. Following this, the JustEnough system was implemented for replenishment from vendor to DCs, followed by phase three, which integrated replenishment from DCs to stores.
By implementing the JustEnough Demand Forecasting and Replenishment solutions, Clicks now has a modern, automated, accurate, demand-driven planning system. With more accurate demand-driven forecasts, the company can eliminate lost sales, overstocks and understocks – helping it to better compete in the marketplace.
JustEnough Replenishment also creates time-phased ordering plans, easing the burden on users that previously had to manually intervene to make up for the shortcomings of the old systems. The solution considers the forecast of demand, current inventory and targeted service levels, making this highly promotional-driven business much more agile and effective.
Clicks expects that more accurate forecasting will ensure it knows what volume of stock is needed when and where, and will enable it to work more collaboratively with its vendors.
“Following deployment of the JustEnough solutions, we actually showed much-improved store availability levels and a reduction in store out-of-stocks by 40%,” says Wills. “It’s incredibly positive for us to see these results in such a short timeframe and now we will go forward and fine tune the JustEnough system to improve upon these results even further.”
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