Success Stories
Reducing Excess Inventory and Improving Service Levels for an E-commerce & Retail Leader
Challenge
A fast-growing e-commerce and retail player, operating across multiple sales channels (direct-to-consumer, marketplaces, wholesale), was experiencing serious inventory imbalances:
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- Excess stock of slow-moving SKUs, leading to high storage costs and risk of obsolescence.
- Stockouts on key product lines, directly affecting customer experience and sales performance.
- Lack of visibility and coordination between purchasing, sales, and supply chain teams, resulting in reactive replenishment and inefficient inventory planning.
The client’s objective: reduce excess stock, secure service levels, and optimize working capital across the product portfolio.
Diagnostic & Methodology
CoreChain launched a structured diagnostic, combining data analytics and stakeholder interviews.
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Collected data:
- Sales history per channel and SKU (seasonality, promotions, sales variability).
- Inventory aging analysis (stock coverage, turnover rate, slow movers, excess & obsolete).
- Purchasing parameters (MOQ, lead times, supplier reliability).
- Service level targets by product segment.
- Financial impact (working capital tied up in stock, storage costs, obsolescence write-offs).
Methodologies applied:
- Lean inventory management principles (waste elimination, flow optimization).
- ABC/XYZ segmentation and differentiated stock strategies.
- Demand variability analysis and buffer stock modeling.
- Risk analysis (FMEA) to identify vulnerabilities in supply continuity.
- Benchmarking against industry best practices.
Solution Design & Recommendations
CoreChain defined a targeted action plan, including:
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- Redesign of inventory policies by product category, with clear stock coverage rules adapted to demand variability.
- Implementation of dynamic safety stock models, calibrated to lead times and sales volatility.
- Replenishment strategy optimization, integrating purchasing constraints (MOQ, lead times, supplier performance).
- Financial scenario modeling to estimate savings potential per action lever.
- Recommendations on supplier negotiation levers and order batch sizing.
Implementation Roadmap
- Phase 1:
Quick wins — focus on top 30% of SKUs generating 70% of excess stock.
- Phase 2:
Deployment of the new inventory management model across all categories.
- Phase 3:
Integration of monitoring tools (Power BI dashboards, inventory health tracking).
Delivered tools:
- Inventory monitoring dashboard (turnover rate, stock aging, service level).
- Simulation templates for purchasing and replenishment planning.
- Training sessions on inventory policy execution for procurement and supply chain teams.
Results & Impact
- Inventory reduction of 22% across the full product portfolio within the first 9 months.
- Over $3.5 million in working capital freed through optimized stock levels.
- Service level improvement of +10 points on top-selling SKUs.
- Reduction in storage and obsolescence costs.
- Strengthened collaboration between purchasing, supply chain, and sales teams, with shared visibility on stock health and replenishment decisions.
- Supply chain governance reinforced through clear processes and real-time data monitoring.