Supply chain upgrade helps Argos improve stock control

Retailer targets savings from stores being replenished on a daily rather than weekly basis

Argos is poised to go live with new IT systems designed to improve its merchandise and supply chain planning.

The retailer wanted to replace ageing legacy systems to improve the automation of stock replenishment.

‘Some of our systems were very old, so we had to look at implementing a core merchandising system,’ Amanda Buckland, Argos supply chain business manager, told Computing.

‘For 10 to 15 years we’ve needed the expertise of our buying teams to make the old, distributed system work, and we want a system that will support these people in driving it forward instead.’

Buckland says the company used to replenish shops on a weekly basis, but in today’s competitive retail trading environment it is more cost-effective to keep as little stock in reserve as possible, so Argos wanted to move to a process operating on a daily basis.

‘The new systems will help us improve our forecast accuracy and view of supplier delivery performance, where we never had a view on the bucket of safety stocks we held,’ she said.

The merchandise and planning system from vendor Oracle will go live in the coming weeks, and is expected to start delivering supply chain cost improvements and a reduction in the amount of markdowns or out-of-stock products by the end of the year.

Richard James, Argos supply chain business manager, says better integration of supply chain and merchandising systems will be a major step forward for the firm.

‘This is the first implementation of this Oracle planning product so it will be a gradual rollout,’ he said.

‘The overall solution is aimed at fast-moving products.

‘We will tune the system for others later, but the initial benefits case had been made on inventory savings and savings in the distribution centres on products that we order often.’