Vietnamese co-op grocer - Business improvement program

TMX supported our client with a Business Improvement Program, driving significant benefits through inventory improvements for existing logistics challenges, supporting the client’s business and planned growth.

Region
Asia
Service
Supply Chain
Industry
Grocery
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Key challenges

High days stock on hand (DSOH): The client grappled with elevated DSOH, impacting inventory efficiency.

Substantial working capital investment: The client faced a significant working capital investment in inventory.

Product availability at stores: As a large retailer, ensuring the right products and quantities at stores posed a considerable challenge, necessitating improvements in inventory performance.

Our approach

TMX examined existing processes, from managing inventory to ordering for the stores, and analyzed the client's inventory profile. Subsequently, we undertook a comprehensive set of actions to optimize inventory management for the client:

  • Performed inventory analysis and identified the need for a long-term investment in Auto-Replenishment Systems.
  • Established standardized inventory performance measures and reporting.
  • Conducted root cause analysis and formulated action plans across purchasing, logistics, and stores to drive inventory reduction.
  • Designed and implemented a user-friendly interim Store Ordering Tool to standardize ordering patterns, representing a significant shift in store ordering behavior and future Auto-Replenishment Systems implementation.
  • Recommended the development of tools for the management of Slow Moving and Obsolete products and Out of Stock items, which were successfully rolled out.
  • Worked closely with the client’s inventory team to identify improvement opportunities in tools and drove increased usage rates for positive results.
The results

With an initial target of 3%, TMX ended up achieved more than a 7% inventory reduction within the initial 9 months of the project. TMX also successfully decreased inventory across the supply chain from distribution centers to stores across Vietnam.

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