Improving a global beauty retailer’s supply chain

Challenge

EXL’s client, a global premium beauty retailer, was performing well at providing excellent customer experiences and the right product mix. However, the company’s supply chain function struggled to meet the growing demand for real-time availability and faster product delivery. Inefficient manual processes and a lack of digital interventions and analytics created limited visibility into product requirements, availability, and tracking. The data and reporting capabilities that could enable better decisions were cumbersome to access and decentralized. As a result, the client faced the following challenges:

• Lack of clearly defined Brand Compliance guidelines resulting in the receipt of damaged, short, and substituted inventory. Delayed shipments created fluctuations in the flow of products to stores.
• Disparate systems, manual processes, decentralized data, and cumbersome reporting overwhelmed the Supply Chain team resulted in a lack of attention to critical business analysis like Stock Keeping Unit (SKUs) forecasting, vendor chargebacks, problem inventory resolution, and other issues. This resulted in employee dissatisfaction, increased acquisition costs, and loss of revenue as products were not available to meet consumer demand during holidays or other peak seasons

Acting as unbiased consultants, EXL helps clients choose and implement the best digital solutions.

Solution

EXL has deep domain expertise in providing supply chain and vendor management solutions to retailers. EXL has helped a wide range of global retail companies in setting up supply chain processes and applying analytics to generate business insights.

Acting as unbiased consultants, EXL helps clients choose and implement the best digital solutions. Using a customizable framework for continuous improvement, EXL enables process efficiencies and then builds upon that success. This approach enables the client to transform their operations systematically, producing optimal benefits with minimal disruption.

Using this approach for the client, EXL implemented the following interventions:

• Introduction of robust purchase order tracking mechanism enabled by real-time visibility tool: This purchase order (PO) tracking tool reduced shipment lead time from eight weeks to three weeks, a significant distribution center (DC) to store lead time reduction.
• Partnered with the brand compliance team to design and implement a vendor chargeback process:
  - DCs were incurring high labor costs due to vendors not following shipping policies and guidelines. Vendors were committing repetitive violations, as they were not notified about the shipping guidelines they were violating. Furthermore, there were no penalties or chargebacks for not following these policies.
  - The EXL team played a pivotal role in designing and setting up a vendor chargeback process and educating vendors about compliance policies. The team implemented robust mechanism to track, report, and penalize repeated policy violations.
• Established a team to focus on periodic SKU reforecasting: This enabled accurate and on-time reforecasting of SKUs, resulting in improved forecasting accuracy.
• Established a team that focuses on simplifying, transforming, and delivering day-to-day operations: This reduced the burden on the onsite team through several interventions. Standardized request templates and approval workflows for PO/SKU creation
  - Improved PO accuracy, thereby reducing PO maintenance
  - Centralized, prioritized, rationalized, and automated inventory reporting
  - Improved discipline measurably for delivery timeliness and quality, meeting 100% of the defined targets
  - Weekend support for reporting during promotion seasons