Friday 21st Oct 2016 - Logistics Manager

Thorntons boosts store replenishment

Thorntons has boosted its store replenishment – reporting a 45 per cent fall in discounts; a 35 per cent drop in wastage (on items directly related to best-before issues); and a 13 per cent saving in store personnel hours, since going live with a Replenishment and Master Data management system from Aldata.

The chocolatier chose the Aldata system in a bid to strengthen its IT infrastructure and improve store replenishment during its busy seasons and promotional pushes, and support its growing multi-channel business, and to ensure that product data derived from its manufacturing systems was “retail ready”.

Historically, Thorntons’ business and its systems have been geared toward production rather than its retail business. Store replenishment was manual and its existing IT infrastructure, built over many years, was made up of a number of disparate legacy systems with limited integration.

As a result, the systems were not flexible enough to produce sales and forecast data that would enable production to adapt its schedules to demand.

Also, Thorntons product ingredients have a short shelf life, so too many products had to be “Reduced To Clear” due to a mis-match of forecast to demand coupled with a lack of visibility of store stock levels.

Thorntons needed a new IT backbone for its retail operations that would enable it to differentiate between its retail sales and sales to its commercial customers, systems which would cater for its seasonal and promotions-driven business model, as well as deliver real-time visibility of inventory across its own stores.

In conjunction with EDS, Thorntons created a multi-discipline steering committee that helped the business in its selection process for new systems.

Jim McLauchlan, programme manager, Thorntons, says: “We wanted the replenishment of store stocks to be managed more efficiently so stock could be distributed better across the business. We were also looking to cut the number of systems suppliers we dealt with so we could manage our systems infrastructure more easily and minimise costs.”

As part of a two-stage project, Thorntons first replaced core systems in its head office and warehouses to put in place the necessary retail IT backbone. This saw the implementation of Aldata Master Data Management to provide the core data functionality and Retail and Commercial ordering systems.

After seven months Aldata Replenishment went live across the company’s own stores to improve allocation, inventory management and to automate store replenishment across its entire retail estate.

As a result of the system, Thorntons has been able to automate its store-based inventory management, which has improved its ability to manage demand.

“We wanted to implement a system that would cover multi-channel operations within Thorntons including retail, franchise and commercial” says McLauchlan. “Aldata provides us with a view of our stocks and sales, and enables us to effectively manage fluctuations in demand. Our business is quite seasonal, so it’s critical to have a system in place that enables us to react to sharp peaks or troughs in demand.”

For example, with demand rising at Christmas, Valentines Day, Mother’s Day and Easter, Thorntons is now able to have the system use sales history and forecast replenishment requirements, to enable its stores to increase product availability for its customers.

The seasonal nature of the business also means that Thorntons produces new lines to maximise seasonal sales. Once the allocation of these goods has reached the stores Aldata tracks the sales performance and automatically replenishes stock based on demand. This visibility allows the business to monitor demand and make informed decisions on how many units will be left at the end of the promotion. Any excess stock can be pushed to stores with high sales, alternative channels and allows the retailer to be ready for a push on the seasonal promotion.

“With Aldata, sales data is taken from Thorntons owned stores and then used to automatically replenish stock across the entire Retail estate. This allows managers to concentrate on their day-to-day duties of managing the stores, their staff and being more attentive to customer requirements, which is important for our business as customer service is one of our key differentiators,” says McLauchlan.

“The roll-out of Aldata Replenishment has been the key to driving ROI from the new system,” he adds. “We were particularly pleased that the Thorntons project team were able to complete the roll-out across the entire Thorntons estate within seven months. And significantly, with limited disruption to store operations.”