Orders management system for AVD Trade

AVD Trade implemented ABM Inventory orders management system. It allowed the company to improve stock management processes significantly. The company managed to decrease over-stock (up to 46%) and missed sales (up to 25%) substantially. It also improved turnover.

AVDtrade acts as a distribution center all over Ukraine. It supplies more than 1500 wholesale points with car spare parts. Besides this the company supplies its own retail store. The goods in it are intended for commercial cars.

Project background

The decision to implement the order management system was made after the client faced certain difficulties in this trade area:

1. Since the work is carried out mainly with foreign manufacturers, the supply chain consists of 3-4 links. The delivery cycle sometimes lasted up to six months. It caused unstable and untimely delivery. The warehouse stock increased and money were frozen.
2. Managers had to make more expensive orders, in order to make delivery faster.
3. The forecast absence – how many goods you need to order and when you need to do this.
4. When creating and sending an order, the manager relied only on his expert opinion and the residues data.
5. The manager needed to keep in mind the supplier’s order condition data (minimum order, multiplicity). It caused often mistakes.
6. Communication between the store and the central warehouse was absent.
7. The problem areas identification was impossible due to the lack of informative analytics. The company did not have the ability to monitor the situation with surpluses and missed sales.

The reasons to choose ABM Inventory order management software for distributors and retailers

AVDtrade considered various inventory and order management software for distributors and retailers. Finally it chose the ABM Inventory system due to:

• The system works on the Theory of Constraints (TOC) and focuses on demand, not on forecasting. It allows maximizing the correct stock level management.
• Price/quality ratio. This system is cloud system. It does not require significant expenses for the purchase of hardware and software. Payment is made in the form of product usage rental monthly payments.
• Continuous support: at the training phase, technical and strategic support during and after implementation.
• Due to the system functional it is possible to calculate the lost profit and frozen money in over-stocks.
• Transparency in tracking the reasons for missed sales due to absence of order / arrival, untimely order, incomplete and/or delayed goods’ delivery; reasons for over-stocks and turnover worsening in connection with incorrect orders / arrivals in terms of the quantity and ordered assortment.

Project progress

Project consisted of two phases:

1. At the first phase the company’s internal processes were studied; a technical task was prepared for the integration of the accounting system with the ABM Inventory order management system; the data was exchanged.
2. The second phase consisted in connecting the store assortment and the central warehouse to the system. The store assortment included categories and the central warehouse was arranged by suppliers. At the moment, the system manages 21 thousand positions of active assortment at both points of storage.

At all implementation phases users were trained according to the TOC stock management methodology. Users also were trained to work with the program and with the system’s reporting.

The results of ABM Inventory orders management system project implementation

Due to the ABM Inventory orders management system implementation, as well as to the optimization of related business processes, AVDtrade achieved the following results:

• The time of work with orders was reduced. Now managers are paying more attention to assortment management.
• The transparency of data on all operations for each SKU increased. Due to that appeared an opportunity to analyze the problem goods items.
• The goods availability level increased due to the revision of suppliers on the basis of analytical data on missed sales, over-stock and supply timeliness.
• The logistics’ expenses decreased due to the urgent orders number decrease.
• The company decreased over-stock by 10% and the lost sales by 13%.
• In the store over-stock decreased up to 46%, missed sales up to 25%, and turnover improved up to 41%.

Find out how to achieve high results via orders and stocks management system implementation!