Taking Inventory

Case Study
Taking Inventory
Almacenes Exito S.A.
Leading Latin American Retailer Almacenes Exito Leverages JDA Solutions to
Optimize Inventory Levels, Increase Customer Service
Almacenes Exito S.A.
Fast Facts
Industry
Grocery and Hypermarket Retailer
Headquarters
Envigado, Antioquia, Colombia
Description
Almacenes Exito is a leading retailer in
South America, operating more than 114
grocery and hypermarket stores in 45 cities
across Colombia, as well as a successful
online business.
Number of Employees
Over 48,000
“JDA Software’s replenishment solutions
have allowed our company to free-up
important resources that were previously
devoted to inventory management.
Moreover, the new system has increased
customer satisfaction by reducing
out-of-stocks, avoiding lost sales and
customers due to breaks in the supply
chain. We have been able to maintain
our position as a leading retailer in South
America with the support of JDA.”
-José Londoño,
chief information officer,
Almacenes Exito
Business Challenge
With more than 255 grocery and hypermarket outlets to manage, Almacenes
Exito realized it needed to address inventory management challenges with
new technology that would enable centralized replenishment, more efficient
processes for meeting customer demand, as well as support the company’s
rapid expansion.
Business Solutions
• JDA® Advanced Store Replenishment
• JDA® Advanced Warehouse Replenishment
Business Benefits
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Enhanced supply chain visibility
Centralized replenishment processes
Better and quicker decision-making abilities through improved data
Optimized inventory levels
Increased customer service levels
Reduced days of inventory
Improved demand forecast accuracy
Improved supplier partnerships
Enhanced buyer and inventory manager productivity
Quantifiable Benefits
• 10-percent increase in inventory turnover
• 60-percent reduction in overstocks
• 12-percent decrease in out-of-stocks
Almacenes Exito S.A. is a leading Latin
American retailer, managing multiple
grocery and hypermarket chains located
in 45 cities throughout Colombia. The
company operates 59 Exito hypermarkets,
40 Ley grocery stores, 11 Pomona
supermarkets, four Q’precious discount
stores, as well as a successful online
business.
Established in 1949 as a small clothing
company, Almacenes Exito has expanded
into a multi-channel retailer that provides a
variety of food products at its hypermarkets
and supermarkets, including produce,
dairy and meat products, baked goods and
beverages. The company’s hypermarket
chain sells clothing for men, women and
children, as well as home accessories
and electronics. When Almacenes Exito
acquired Carulla Vivero S.A., its chief
competitor and second-largest retailer in
Colombia, Almacenes Exito was faced with
the challenge of managing an additional
155 grocery and convenience stores located
throughout the country.
Addressing Inventory
Management Challenges
With more than 255 grocery and
hypermarket outlets to manage, Almacenes
Exito realized it needed to address
inventory management challenges with
new technology that would enable
centralized replenishment, as well as ensure
better and more efficient processes for
meeting customer demand. In addition to
optimizing inventory levels and improving
demand forecast accuracy, Almacenes Exito
required scalable, best-of-breed solutions
that could adapt to the company’s rapid
growth in a global market.
To support its rapid expansion, the retailer
replaced its in-house applications with
JDA® Advanced Warehouse Replenishment
(AWR) and JDA® Advanced Store
Replenishment (ASR) solutions to heighten
visibility into its supply chain.
After conducting a pilot study with ASR,
the retailer implemented the software at
all of its stores in a record eight-month
timeframe.
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JDA Solutions Deliver
Immediate Results
According to Almacenes Exito Chief
Information Officer José Londoño, the
project’s success can be attributed to the
company’s commitment and support.
“We immediately started seeing results
from the software implementation thanks
to the on-time installation of AWR and
ASR,” Londoño said. “One of the most
important changes was the centralization of
replenishment. This provided us with better
and quicker decision-making abilities, and
was a major improvement over our previous
purchasing process in which buying
decisions were influenced by suppliers on a store-by-store basis.”
Inventory levels across all of the retailer’s
selling channels were positively impacted
by the centralized replenishment system,
resulting in improved data and the
fulfillment of logistic agreements with
the company’s suppliers. Almacenes Exito
leveraged JDA Software’s solutions to
increase inventory turnover by 10 percent
and reduce overstocks by 60 percent. The
retailer also realized a 12-percent decrease
in out-of-stocks as a result of the new
technology.
In addition, Almacenes Exito’s buyers and
inventory managers were able to boost
productivity, leading to increased customer
service levels and market penetration.
Improving Customer Service
Levels
“Having a dynamic forecasting system
allows us to react rapidly to customer
demand,” Londoño explained. “The system
also enables us to establish cyclical forecasts
to better plan for seasonal fluctuations in
demand. We’ve been able to reduce our
inventory investment while at the same
time ensuring that our store shelves are
stocked with the right merchandise to
minimize lost sales and improve customer
satisfaction.”
In addition, Almacenes Exito has benefitted
from reduced days of inventory and is now
able to more effectively plan and execute
strategies for sales support during seasonal
campaigns with the support of JDA.
Almacenes Exito’s supplier partnerships
have also improved. By leveraging the
JDA solutions, the retailer is successfully
continuing collaboration programs with
several key suppliers, according to Londoño.
“JDA’s replenishment solutions have
allowed our company to free-up important
resources that were previously devoted to
inventory management,” Londoño added.
“Moreover, the new system has increased
customer satisfaction by reducing out-ofstocks, avoiding lost sales and customers
due to breaks in the supply chain. We have
been able to maintain our position as a
leading retailer in South America with the
support of JDA.”
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