A leading fashion group has shortened the inventories carried out in its central warehouse to just one day by using the sample inventory method and a solution from Stat Control.
Huge and multi-faceted: The dimensions of the new distribution centre can barely be controlled with conventional solutions. This is where around 100,000 different items are stocked in one fully automatic and two manual storage areas. During peak times, there are more than four million parts in up to 500,000 boxes or handling units – known as “HUs” for short – in this distribution centre. Most of them can be found in a shuttle warehouse with a capacity of 450,000 holding areas. There is also a forkliftmanaged high-bay warehouse and a paternoster warehouse for ties and similar small items and accessories.
All the items fall under the so-called packaged goods range. The storage and picking capacities were at their limits due to continuous growth. Over a construction period of just 15 months, a complex measuring 279 metres long and 122 metres wide was created on a surface area of 35,000 square metres. The sheer size of the new build required a new way of thinking in many respects – even when it came to the inventory.
“Performing a full count of all the items was no longer an option for us,” reported one of the company’s logistics specialists. Only the shuttle warehouse justified a new inventory method. “It’s like a black box that we can’t just go into and count,” added the logistics specialist. Another argument in favour of abandoning the full count method was the immense time and cost expenditures associated with it. “At the previous two warehouse locations, up to 25 employees worked on the full count inventory for two full days,” recalled the logistics expert.
The company opted for the sample inventory as an alternative to the full count during the construction phase. This requires computerassisted warehouse management and a certified inventory system.
While looking for a suitable supplier, the fashion group soon came across Stat Control, the Hamburg-based software and consulting company. “We were particularly convinced by Stat Control’s high level of expertise and the fact that it is the only supplier to exclusively focus on the topic of random sample methods for inventories and inventory controls,” said one senior employee, who was significantly involved in the selection process. They also added that “the chemistry was perfect right from the start”. In the first step, the company opted for the “Stasam” solution. The implementation of both the software and the interface to SAP EWM, the ERP system, went without a hitch. “We were impressed by Stat Control’s on-site service during the project. The responsible employees were on hand to help until everything was up and running,” pointed out one of the decision-makers.
Stasam works with all four approved extrapolation methods, whereby the regression estimation in particular provides the most accurate results in this situation. This type of inventory is recommended when there are conventional storage areas with different inventory reliability levels in addition to an automatic warehouse. The number of items to be counted during this type of inventory is roughly between 5 and 10% of the inventory items.
The first sample inventory saw the logistics specialists issued with the perfect certificate. In the end, the auditors confirmed that there was a relative sampling error of just 0.13% and a total value deviation of only 0.03%. A 1% sampling error rate and a 2% total value deviation would be permissible. For the inventory, Stasam had calculated a sample of 750 boxes, or around 10,000 parts, which were carefully counted by 20 employees in a single day. Compared to the 2.5 million parts that had to be taken in hand in the past, this was a giant tep forwards. But the advantage doesn’t just relate to the time and associated costs saved.
After all, counting errors are inevitable during full inventories involving several million parts. Incorrect inventories and thus an uncertain basis for planning are the result. Summary: The excellent result of the first sample inventory opened up further savings potential to the company, since the high level of inventory reliability means that even the sequential test – and the Staseq software – can be used for inventory purposes. This can radically reduce the counting work even further. In that situation, the minimum sample is just 30 items. So it’s certainly an attractive option for the future.