Clicks is South Africa’s largest retail pharmacy and health and beauty chain with more than 450 store locations and more than 18% share of the retail pharmacy market. The company maintains thousands of SKUs in its stores throughout the year, though a constant stream of new product launches combined with frequent promotions and high SKU seasonality means that the company’s SKU base changes frequently throughout the year.
The distribution centers themselves were running out of space to handle the growing number of SKUs and volume, which would require either extending the size of existing facility or building an additional facility. Clicks needed a way to drive service improvements across the organization especially to stores, reduce transportation costs and increase productivity without making significant capital investments.
Fortna helped Clicks achieve the desired results by conducting an in-depth analysis of the company’s SKU velocities, storage capacity, order profiles and operational processes. The storage media was re-designed to accommodate the current number of SKUs and handle significant volume growth. The DC was re-slotted according to SKU velocity and store category layout which helped to eliminate unnecessary travel and improve productivity in the DC as well as increase efficiency of restocking shelves in the store. Finally, a slotting tool was recommended to maintain optimal slotting into the future as the company grows and adds new products over time.
As a result Clicks was able to delay building an additional facility by up to 2 years, saving the company R24 million in capital expense. The changes also gave them breathing room and additional capacity for future growth while they design the next evolution of their distribution network.
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