If You’re Not Using Fulfillment Slow Mover Logic, You Might Be Missing Out
This blog is co-written by Tony Verdi, Customer Success, and Jennifer Brox, Industry & Solution Marketing
Are you feeling pressure from above to squeeze even more margin out of your network? How many inventory dollars are tied up in C and D items? What percentage of your SKUs are segmented as slow movers? In conversations with retailers using Blue Yonder solutions, we guesstimate that about 40% of SKUs in a grocery store meet the definition of slow mover, selling less than one unit a week. If you are replenishing these items without Slow Mover logic, you are leaving money on the table. Now’s the time to make a change.
A manufacturer that has a limited number of SKUs might not have that many that are slow-moving. The vast majority of retailers, however, will have many items that sell slowly at the store level. For grocery stores, it’s not just the frying pans and meat thermometers in aisle 14 that sell slowly; specialty olive oils and spices, some ethnic foods, and odd sizes of products that sell relatively quickly will typically sell less than weekly. Remember, we’re talking about items at the store level. The next time you’re in a grocery store look at the shelves and think, “Will this store sell 50 of this item in a year?” If not, it’s a slow mover, and there are lots of them in every aisle.
For a typical large pharmacy, the percentage of slow movers is even higher. Think about the makeup aisle with all the colors, sizes, and blends. As a group they aren’t slow moving, but they have to be replenished as individual items. Now think about the big box DIY home center. For those stores, the percentage of total SKUs is closer to 75%. Does that seem high? Go to the back of the store and look at the rows and rows of spare parts for appliances, screen doors, and plumbing fixtures. They are almost all slow movers, and all require a better replenishment solution.
And now the big question: Why do you need Blue Yonder Slow Mover solution? The solution solves the two biggest problems that retailers face with C and D items. First, demand at the store gets bunched at the beginning of the planning horizon. Any SKU that is currently stocked at the proper level (usually called a presentation stock) and has any forecast at all will call for a replenishment as soon as possible. All these shipments will put demand on the distribution center (DC) today, even though there is virtually no chance that all will order within the next few weeks.
Blue Yonder Slow Mover algorithm turns these small decimal forecasts into integers that are properly spaced according to the forecast, and the first occurrence of an integer will be randomized across stores. The result is that the DC will have a much better picture of the demand that is likely to present itself in both the near and longer term, making ordering and safety stock calculations much more accurate and effective.
And finally, Blue Yonder Slow Mover logic makes shipments to the stores dependent on whether the store is likely to sell an item anytime soon, based on the forecast. If the retailer is planning a SKU that sells 40 units per year but sells 25 of those units in the month before Christmas, they need to plan differently in November, when they must ship to the higher forecast, than they do the rest of the year, when they want to wait until one sells. That is how Blue Yonder Slow Mover logic works, and it does it without any user interaction.
Why are we so confident in the value provided from the Blue Yonder Slow Mover logic? It was introduced in Fulfillment version 8.2, back in 2014, so we have had a decade of learning that proves almost all of Blue Yonder’s retail Fulfillment customers can reduce inventory and improve service levels with our Blue Yonder Slow Mover solution. Don’t wait another day to call your Customer Success Manager or Account Manager to schedule a one-hour session to learn more.
