26 November 2009

Sport equipment and clothing specialists Newitts implements AGR's Inventory Optimiser to make its purchasing easier and more effective.

Established in 1902, Newitts is a family company that supplies specialist equipment and clothing for a large range of sports, from aerobics to weightlifting. Operating from a central warehouse in York in the UK, the company employs around 35 people. Its customers range from large public sector bodies, such as HM Prison Service and local councils, to schools and sports clubs as well as the general public.

Newitts has a long history of technical excellence and was one of the early adopters of e-commerce. It has been selling to the general public via its Web site since 1997 and owes its success to the high service levels it provides. The competitive marketplace generated by Internet shopping means having the right stock available at the right price is paramount, and while Newitts has been able to deliver 98 per cent of items from stock, this has also led to some over-stocking issues.

To ensure its continuity in providing a high level of service to its customers while significantly reducing its stock holding, the company decided to look for an inventory management system. “We are a growing business, often shipping more than 600 orders every day,” says Newitts’ IT manager Ian Wilson. “However, our forecasting was based on making sure we could fulfil every order any time. This meant we were spending far too much time creating back orders, making us much more reactive than proactive.”

Newitts reviewed the market and decided AGR Inventory Optimiser delivered everything it was looking for. The system, which uses data from any enterprise resource planning (ERP) or transaction system and employs sophisticated forecasting methods along with established inventory management techniques, is specially designed to make purchasing easier and more effective.

“AGR Inventory Optimiser integrated seamlessly with our existing Microsoft Dynamics NAV ERP system, which meant we could implement the system with no impact at all on other areas of the business,” says Wilson. “AGR’s approach is to focus exclusively on delivering accurate forecasting that results in less cash being tied up in stock holding and a more flexible yet comprehensive approach to customer service.”

Since purchasing AGR Inventory Optimiser, Newitts has adopted much more accurate and effective purchasing capabilities. The system’s intuitive graphic interface allows purchasing staff to gain greater insight from historical sales data and translate this into more accurate and effective sales forecasts. At a glance, they now see a clear and accurate overview of the current stock position, allowing them more time to manage inventory and less time wasted checking and matching incorrect data.

AGR Optimiser also includes an additional feature called Management By Exception, which allows the system to generate specific early warning reports that highlight and prioritise the key situations they need to attend to. Newitts is able to define exception reports to identify items that need special attention, such as potential stock-outs, late deliveries, high forecasting errors and slow movers.

“After being live for almost a year we have seen our inventory reduced by 15 per cent, which represents a cash saving of £350,000,” concludes Wilson. “At the same time we have the confidence to add more stock lines, knowing that we are not going to be saddled with excess stock that we cannot sell. Before Inventory Optimiser was implemented, our stock turns were under three times per annum and now they are over five times. This has increased our bottom line profit quite considerably.”

This article first appeared in the Retailspeak Partner Guide 2010

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