June 10, 2005, 12:00 AM

How Cooking.com moves more inventory at less cost

Cooking.com has increased the number of SKUs in its warehouse by more than 30% without increasing inventory costs or warehouse capacity, thanks to a new demand management system that lets it better forecast sales and manage delivery schedules, it says.

Cooking.com has increased the number of SKUs in its warehouse by more than 30% without increasing inventory costs or warehouse capacity, thanks to a new demand management system that lets it better forecast sales and manage delivery schedules, senior vice president of operations Bryan Handlen tells InternetRetailer.com.

“This supports our marketing programs and makes sure we have the right amount of inventory to support promotions,” Handlen says.

The Catalyst Connect Demand Management system from Catalyst International integrates with Cooking.com’s order management system to get data feeds on sales transactions, then provides real-time reports on what Cooking.com needs to order from vendors, Handlen says.

The system replaces a former method of manually compiling sales records and vendor delivery schedules on spreadsheets, followed by analysis to figure what Cooking.com needed to order.

But that process was so labor-heavy and time-consuming, it would take a few days to compile enough information to project sales and place orders on only the top 20% of products by sales volume. And that left no time to further analyze vendor delivery performance to pick the supplier best able to deliver within a certain window of time.

Now it takes less than half a day to analyze sales information on all products, Handlen says. The Catalyst system also integrates with Cooking.com’s warehouse management system, which enables the retailer to also view the amount of time it takes vendors to get products to Cooking.com’s distribution center after receiving a purchase order.

By combining the ability to project sales faster and determine the most efficient vendor deliveries, Handlen says, Cooking.com has been able to rely on less safety stock per SKU. Now the warehouse holds 6,000 SKUs, up from about 4,500, without an increase in inventory costs or warehouse space. “In the past, we’d buy more upfront or run out of merchandise before we ordered more,” Handlen says. “Now we can buy less and replenish faster.”

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