The software calculates stocking levels based on a “pull”
approach—in other words, sales data drives replenishment.
Agentrics’ application replaced software that wehkamp.nl
had developed in-house to determine maximum and minimum inventory levels. “When we changed from a catalog to
an Internet company, there was no specific software for that,
so we had to do something ourselves,” recalls van Norel.
One problem with wehkamp.nl’s own software was that
once one of the company’s planners set the inventory levels,
“For example, let’s say we want to sell a
new laptop computer,” van Norel explains.
“ I think I’m going to sell ten a week, so I
set the norm to ten. Then we start selling,
and Agentrics starts calculating. If we sell
more, the norm gets set higher. If we sell
less, the norm decreases. It sounds pretty
simple but it’s really complicated.”
The application provides a dashboard
that gives supply chain planners strategic,
operational, and technical perspectives on wehkamp.nl’s
inventory. Some examples: On the operational level, the soft-
ware creates a list of the best-selling products and the slow-
est-moving ones. On the strategic level, the dashboard pro-
vides total inventory value and a breakdown of that value
into categories, including fast-moving, slow-moving, inac-
tive, and new products. On the technical level, the system
provides both historical and current views of inventory,
which allows the planners to see, for example, that 60 percent
of the items in the warehouses are fast movers but only 50
percent fit that profile during the same period a year earlier.
The reports and dashboards are available throughout all
levels of the company, which means everyone is working
from uniform information. “This information is available
on a daily basis to the planner, the unit manager, and top
management,” van Norel says.
Because actual sales are driving inventory restocking
decisions, van Norel can let the software handle 80 percent
of the replenishment orders automatically. He can then
focus on the 20 percent of items that need special attention,
such as seasonal goods or new products. In addition, a plan-
ner must still approve the replenishment shipments each
day. “ETC sends the order to us for the planner to give the
okay, but it’s only a formality,” van Norel notes.
MORE SALES, LESS INVENTORY
The three-month pilot worked so well that wehkamp.nl and
ETC have made it a permanent way of doing business. The
collaborative supply relationship’s ability to keep even the
hottest-selling product in stock increased sales and helped
to fuel wehkamp.nl’s 15-percent revenue growth in 2010.
“By ordering on a daily basis instead of weekly or month-
ly, we don’t buy too much but [instead buy] exactly what
the customer requires,” sums up van Norel. “The percentage
of customers waiting for their delivery has decreased.
Because the service level has increased, so have sales.”
At the same time that the e-tailer has
increased sales, it has also achieved about
a 30-percent reduction in safety stock,
Because daily replenishment and vendor-managed inven-
tory have been so successful for computers and associated
products, ETC has expanded that program to include some
other types of hard goods it supplies to wehkamp.nl, such
as cameras, appliances, and home electronics. The e-tailer,
moreover, would like to get more suppliers involved in daily
replenishment and is now in talks with vendors that furnish
goods for its hardware category.
Wehkamp.nl’s experience in collaboration with ETC
clearly demonstrates the value this approach offers for
online selling. “Instead of having to sell goods that are not
popular, there can be a focus on the best-selling items. It’s
pull instead of push,” van Norel says. “It’s a totally different
way of doing business.” ●
The collaborative supply
relationship’s ability to
keep even the hottest-
selling product in stock
increased sales and
helped to fuel
wehkamp.nl’s 15-percent
revenue growth in 2010.
