Fashion chain Bank (bankfashion.co.ck/), headquartered in the U.K. (see Figure 11.12), doubled the number of branches because of its excellent stock availability, faster replenishment, accurate forecasting and minimal merchandising and buying costs. Only an additional 7 merchandising and buying staff were needed to manage the extra volume of work. Warehousing staff had been reduced by 15 percent despite 15 more stores being added. These results were achieved form the use of sophisticated BI and DSS tools.
Decision Support and Forecasting.
A key reason cited by Bank for its expansion is real-time visibility the ability to consistently have the right customer sizes in stock. Bank’s buyers have used BI tools to analyze which trends are taking off and to take full advantage of this knowledge to make sure the goods are in stock.
The system forecasts future buying patterns based on historical data. Buyers use what –if analysis to understand the effects of different buying ranges. For instance, when Bank analyzed its customers’ size profiles, it found it was buying too many large sizes. The retailer altered its size rations for appropriate styles, increasing sell-through by 5 percent.
Buyers and managers quickly see current stock levels, product performance, and profitability in real time on dashboards and, equally important, what customers are not buying. By comparing sales with previous years’ figures, buyers can establish when sakes patterns are different to determine price elasticity, so stock items can be priced correctly and mid-season promotions can be changed overnight when necessary. Merchandisers’ minimum stork levels are predefined for each store. When new stock arrives in the warehouse, it is sorted quickly and dispatched in a very smooth operation. This allocation/replenishment method is extremely efficient. Management uses Futura’s (futurauk.com/) performance management and analytical tools to model future sales, costs, cash and inventories, then define the top-level budget.
Discussion Question: What is the impact of real-time visibility on managers’ performance at Bank? What efficiencies have BI and DSS capabilities provided Bank? How was Bank able to increase the number of stores and reduce the number of employees?