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Selver and Coomor: minimizing OOS trough visibility in supply chain


Studies show that the average out-of-stock in retail industry is 8,3%. There are many reasons for the OOS, but one way to improve the situation is for retailers to share POS data with suppliers. 


Coomor Kaubandus OÜ
               
Estonian wholeseller of audio-video- and IT-supplies, home appliances and household goods.
Brands represented:
Philips, SanDisk, Sennheiser, Golla, Verbatim, TDK, and others
Delivery points:ca 200
Delivery frequency:
weekly, on demand
Telema services:
Telema EDISupplier, Telema VMI
Documents:~4000 monthly (orders, invoices, sales reports, inventory reports)
Business software:SAF

Indrek Lepik,
Sales Director of Coomor
                                

Hairdryers, lightbulbs, doorbells, pots and pans… 75% of revenue for such goods is generated through promotional campaigns. Estimating the demand for promotional goods would be tough even for the clearvoyants. Thus it often happens that the goods are sold out and consumers have to face an out-of-stock situation.

Coomor Kaubandus is an innovative company constantly looking for new solutions to optimize their processes.  This includes both internal processes as well as those in the whole supply chain. The company has used electronic data interchange (EDI) for communication with its customers for already 10 years.

Today, we receive electronically 70-80% of our orders. Considering that we receive over 1000 orders every month, this means substantial savings in  order processing,” claims Indrek Lepik, Sales Director of Coomor Kaubandus.

In electronic data interchange, the human intervention and thus the error rate is low. This is very important today, as most mistakes are costly and some of them could result in direct penalties. Indrek Lepik points out that besides the well known EDI benefits - cost savings and smaller paper consumption, there is another factor worth mentioning. The spark in the eyes of the employees who have gotten rid of all the meaningless work now done by computers.

In addition to EDI orders and invoices, Coomor is one of the happy suppliers that receives daily POS (point-of-sale) data from several retailers. For example, this data is sent by all Selver shops, allowing Coomor to have a good overview of its sales and inventory balance in each shop. 

Based on the daily POS data, Telema VMI solution automatically calculates and displays various stock management metrics, like Days of Sales (DOS). When DOS is critically low, the supplier can react proactively and replenish the goods on time. Receiving POS-data helps to better meet the demand for promotional goods, and deliver goods to the shops in need.

Consumers act unpredictably, but thanks to POS-data analysis, we can react to the unexpected demand within 24 hours (time needed for transportation). We are able replenish the goods in shops before they would be sold out,” explains Lepik.

Providing such visibility pays off for retailer Selver as well. Selver's Head Purchasing Director Margit Kissa comments:



"We have understood in Selver that it makes sense to collaborate with suppliers in avoiding OOS. We sell products in 45 shops and there are over 20 000 product in our assortment. In case of many product categories, suppliers are better informed about product characteristics, trends and related customer demand than the retailer. Nail polish and plant seeds are a good example, but also USB memory sticks found in Coomor's offering".
 Margit Kissa
Head Purchasing Director of Selver
 

Providing visibility in the supply chain results in higher product availability in Selver shops and therefore higher revenues. Having a right product at the right time at the right place benefits not only the retailer, but also supplier and, most importantly, the end consumer. 

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