Case Study: Data-Driven Inventory Optimization for a Leading Retail Chain
Client Overview
A leading retail chain in Netherlands with stores across urban and semi-urban areas. The brand offers a wide range of consumer goods including FMCG, lifestyle products, and electronics.
The Challenge
Despite healthy sales volumes, the company faced persistent issues in inventory inefficiencies, including:
- Frequent stockouts of fast-moving products, leading to customer dissatisfaction.
- Excess inventory of low-demand SKUs, tying up working capital and storage space.
- Limited visibility into regional demand trends and seasonal spikes.
- Manual, intuition-based ordering processes with minimal data backing.
These inefficiencies were directly affecting their profit margins, customer experience, and supply chain costs.
Our Solution: Predictive Analytics for Inventory Optimization
Babcom partnered with the client to design and implement a data-driven demand forecasting and inventory management solution. Key components included:
1. Data Integration & Cleansing
- Aggregated 24 months of sales, customer, and supply chain data from POS systems, ERP, and online platforms.
- Standardized data across formats and sources for clean modeling.
2. Advanced Analytics Models
- Built region-wise demand forecasting models using historical sales, weather patterns, promotional calendars, and store footfall data.
- Developed SKU-level ABC analysis and predictive replenishment logic.
3. Recommendation Engine for Reordering
- Implemented ML models that generated store-wise reorder recommendations weekly.
- Integrated with ERP for semi-automated purchase order generation.
4. Real-Time Dashboards for Inventory Visibility
- Designed Power BI dashboards to show:
- Stock-out risks by location
- Aging stock alerts
- Profitability impact of demand-supply mismatch
Results & Business Impact
Within 6 months of deployment, the client achieved:
- >9% improvement in stockout rate from 18% to 7.5%
- Reorder decision cycle improved from 4-5 days to <24 hours
- Profitability improvement
- Excess inventory of low turnover SKUs reduced by 40%
The improved forecasting and inventory alignment also led to:
- +22% improvement in customer satisfaction (measured via NPS)
- 30% drop in emergency stock transfers across warehouses
Client Feedback
“Babcom didn’t just give us analytics—they gave us visibility and control. The ability to respond to demand faster and smarter has made our operations leaner and more customer-centric.”
— Head of Supply Chain
