REVERSING A NEGATIVE SALES TREND BY IMPROVING SUPPLY CHAIN RELIABILITY
A leading manufacturer and distributor of personal health and wellness products transforms how they do business with Walmart and dramatically improves in-stocks and promotional effectiveness.
A leader in personal health and wellness products came to MPG after working unsuccessfully with two other consulting firms to try to improve their performance at Walmart. The client had only a limited number of their SKUs in distribution at this key retailer, and sales were tracking at -10% versus a year ago.
MPG soon found that, from the Walmart buyers’ perspective, the manufacturer’s credibility in managing the business was poor. In-stocks were unacceptably low, as was MABD compliance. The first order of business was to determine why this was so. Late deliveries and out of stocks are disruptive: before you can convince a retailer to work with you to take on more SKUs and drive sales for your products, you need to be a supplier in good standing.
Working collaboratively with Walmart replenishment managers, MPG found that not all client carriers were utilizing the Walmart Scheduler, so shipments were not getting checked in on time. A process was designed and implemented to hold all carriers accountable for adherence to Walmart’s requirements. Next, we looked at determining the root cause for why the client often was not able to fulfill Walmart orders. Root cause analysis highlighted a need to improve forecasting on both the client and Walmart sides. On the Walmart side, MPG examined the process at all levels - Walmart corporate, distribution centers (DC), and stores - and identified a misalignment between lead times and safety stock: Walmart was not carrying enough stock in the DCs to cover the lead time for this manufacturer’s products, and so was often unable to meet shopper demand at the store level.
MPG helped the manufacturer establish a productive, more profitable, collaborative relationship with the Walmart replenishment team, working with the client and the Walmart replenishment managers to optimize the demand planning / forecasting process - using real-time consumer data and adjusting for lead times, trends, seasons, and events to accurately forecast consumer demand - and ensure Walmart inventory settings are correct at the DC and store levels to ensure adequate safety stock to meet shopper demand.
As a result of our work:
The client was able to bring in-stocks to 97-98% within the first two months
MABD fines were eliminated
Client sales are now tracking at 10% over last year, a 20% improvement over YAG