About the Customer
Devlyn is the largest optical group in Mexico, specializing in the eyewear retail market. They control and operate a variety of stores within the industry, provide optical products for the wholesale market, and have also expanded their activities towards optometric and ophthalmological specialization.
Devlyn faced a growing challenge as it needed to showcase a wide variety of products in its stores while dealing with an accumulation of slow-moving inventory. The slow movers occupied shelf space, blocked cash, and compromised the store’s ability to convert traffic into sales. During the COVID-19 pandemic, the situation worsened, with aged inventory beyond 180 days reaching 55% of Devlyn inventory in stores. This led to cash flow problems and delays in purchasing and replenishing fast-moving products.
Despite the challenges, a cross-store sales analysis revealed that most of the slow-moving products were not bad products, but actually stocked out fast movers in other stores. The fast-moving products were not being replenished frequently enough, and sometimes were being cannibalized instead by the introduction of new alternative products due to limited cash availability.
To overcome this situation, Devlyn required a holistic execution approach that would accelerate store sales with existing inventory in the chain. The approach would re-utilize stores’ slow-moving inventory to create sales in stores that needed them while protecting the availability of fast movers and maintaining an attractive assortment in every store based on the customers’ needs.
Devlyn began the implementation of Onebeat’s FLOW solution with OneBeat’s Adaptive Assortment Management module both operating on AWS, with the aim of releasing cash tied up in slow movers in stores and at the same time, improving availability of stores’ fast movers:
- Local category tails (aged inventory in stores beyond 180 days) that are needed for sales in other stores are identified, phased out from the store assortment, and cross-shipped to the new location in frequent inter-store transfers within the same region / district.
- Emerging store fast movers in every category are identified and are set with a higher priority for replenishment.
- Store category assortment targets are monitored, and gaps are identified and highlighted for refreshment.
- Replenishment decisions are prioritized and executed based on SKU performance and store category assortment needs.
These processes were stabilized and automated, and a dashboard with key performance indicators (KPIs) was implemented to monitor and track progress.
Results and Benefits
Over the course of the first six months since its initial Go Live, Devlyn gradually increased its purchasing budget and utilized Onebeat’s prioritized replenishment, refreshment, and tail rotation processes to improve its store assortment and availability. The results achieved during this period across the top 251 points of sale within the pilot scope were as follows:
- An average sell-through of 73%.
- A 26% reduction in the share of inventory aged beyond 90 days in stores.
- A 125% improvement in the availability of top sellers’ (“A Class” SKUs) in stores.
- A 119% improvement in the availability of 2nd-level fast movers’ (“B Class SKUs”) in stores.
- A 64% reduction in the share of category shortages in stores.
- A 75% reduction in the time required for replenishment and transfer planning (from 12 to only 3 hours).
To achieve these efficiency improvements, Devlyn simplified information administration, consolidated business databases, programmed required algorithms and formulas in Onebeat, and implemented a clear and straightforward TOC methodology to manage inventory and allocate it smartly.