Case Study
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Top 10 brand in the Kitchen & Dining category has increased its profit by 30%

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Karim Saydashev
oct 17, 2022
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Industry:
Location:
Company Type:
Marketplace:
Kitchen & Dining
USA
PL Brand
Amazon

With support of HyperC our client has achieved the following results:

Save over 20 percent annually on the shipping costs for containers and trucks

Fulfillment team productivity increased by

50%

Storage fees reduced by

48%

Profit increased by

30%

The Challenge

The company has been having high difficulty in managing inventory from 10 various suppliers with different production cycles, as well as correctly forecast demand for a large catalog of 70 products.

As a result our client had stock on Amazon for some positions for 5 months ahead, which resulted in extremely high Amazon storage costs

The client was also experiencing difficulties ordering their required supplies because of the varying lead times quoted for each product. These varied lead times made it difficult to schedule the production of the required goods by a specific departure day, and especially managing the process efficiently.

The client was also experiencing difficulties ordering their required supplies because of the varying lead times quoted for each product. These varied lead times made it difficult to schedule the production of the required goods by a specific departure day, and especially managing the process efficiently.

In 2021 our client had very high shipping cost (5% from total revenue)

5%

from
revenue

High storage cost
(4% from total revenue)

4%

from
revenue

Had consistent Out Of Stock events, which led to inevitable damage from ranking loss and lost sales (5% from revenue)

5%

from
revenue

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The Solution

Using HyperC, the client has found the best way to ship goods more efficiently, increased their Amazon inventory performance by 25%, and predicted future demand witha high degree of certainty as well as fixed supplier relationship management.

case content

With these updates our client was able to achieve regular FTL shipments to Amazon once a month with an accurate coverage of future sales 4 weeks ahead, with dynamically updating safety stock which has helped to avoid OOS events at low cost. The shipments have started to be grouped into new batches for maximum savings in transportation, storage, and handling fees.

Shipments became more regular, but with a smaller volume of SKUs that have low sales velocity. This helped to reduce the storage costs by 50%, avoid having old stock in the warehouse and
fill a full truck with more popular
and frequently sold SKUs.
50%

reduction of storage costs

Shipments became more regular with a lower number of SKUs that had low sales velocity. This reduced their storage costs by half, avoided keeping old inventory in the warehouse and filled a full truck with more popular and frequently bought items.

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Full truckload has brought significant savings of  transportation costrarely available before

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The optimal allocation of the truckload capacity by SKUs was achieved through with 95% accuracy Hypercet forecasting model.

The biggest achievement is that we made a full visibility of our future supply chain needs, including future inventory levels at Amazon and 3PL Warehouses. By doingso, we've been able to simplify the procurement process and planned purchase orders so that they're ready on time from multiple suppliers and shipped togetherin one single container.

Eventually the client has managed to lower shipping costs by 20%, avoided lost sales, and increased the net margins by 5%.

decreased shipping costs by 20%

20%

increased net margins by 5%

5%

Due to HyperC optimizations, the cost of trucking shipments were lowered from $0.11 to $0.05 per lb. Moreover,
the average pallet utilization was raised by 21%.
To save on transportation and storage fees for Amazon,a new 3PL facility was proposed at a close proximity
to Amazon FC.

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By eliminating Out of Stock, we were able to raise the client’s FBA
In Stock Rate to 100%

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Optimizing the products in the FBA warehouse led to a lower percentage of excess inventory. With this improvement, the IPI score went up (from 440 to 600), which then led to an increased restock limit for additional 56161 units and enabled our client to ship containers directly to Amazon from China

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As a result, we were able to get much shorter lead time than using 3PL in between. As a result, our client now has 100% reliable supply chain operations with no disruptions.