Established as a family business in Melbourne in 1979, Baby Bunting is Australia’s largest nursery retailer and one-stop baby shop. The retailer operates more than 60 large-format stores across Australia and a growing online channel serving Australia and New Zealand.
The Challenge: Disconnected, Manual Planning Causes Replenishment Issues
Baby Bunting’s business is heavily promotion-driven. Beyond maintaining their regular assortment, Baby Bunting’s primary challenges were managing inventory for holiday sales spikes and promotional events such as their semi-annual “Storktake” sale.
The lack of a centralized supply chain planning platform meant Baby Bunting’s stores managed their own orders through time-consuming, manual processes. Because stores were not able to base orders on demand, they often over-ordered regular stock items, resulting in markdowns or under-ordered items, resulting in stockouts during promotions or seasonal spikes. Further, Baby Bunting had difficulty providing their suppliers with visibility into future orders or an accurate view of stores’ needs due to siloed store and distribution center (DC) planning processes.
The Project: Automate and Unify Forecasting and Replenishment to Drive Order Accuracy
Baby Bunting needed to centralize their planning to help them take control of inventory allocation, drive supply chain improvements, and provide scalable support throughout a rapid growth period. To meet these needs, Baby Bunting implemented RELEX’s demand forecasting, replenishment, allocation, and promotion forecasting.
The project kicked off in August 2019 for the 53 stores that were open at the time and a DC network consisting of one owned distribution center and six 3PL distribution centers. Baby Bunting had several key goals that they needed to achieve with the implementation, including:
- Eliminating manual processes to drive demand-based ordering, increase accuracy, and give staff more time to spend on customer service, which is a key part of Baby Bunting’s value proposition
- Automating replenishment to reduce out-of-stocks on promotional inventory and over-ordering of regular stock items that led to markdowns
- Integrating forecasting and replenishment to remove silos and provide DCs and suppliers visibility into inventory needs across all channels
- Improving planning processes for future initiatives such as expansion into new territories and ecommerce channel growth
By May 2020, all 60+ stores and Baby Bunting’s online channel were live, and their complete integrated supply chain was live by August 2020.
The Results: Collaboration and System Flexibility are Keys to Success
Results at a glance:
- 7% availability improvement
- 8% reduction in inventory value in like-for-like stores
A key aspect of the success of Baby Bunting’s project was the high level of collaboration between them and RELEX. From the beginning of the partnership, Baby Bunting realized they could rely on the expertise of the RELEX team to understand their business needs and recommend the best solution options to meet them. To work with the RELEX delivery team, Baby Bunting dedicated full-time resources including a Project Manager, Business Analyst and Supply Planner (to act as subject matter expert). The Supply Planner continues to act as the RELEX solution superuser, a critical role that supports fellow Planners and ensures the RELEX system continues to deliver value.
To further illustrate the success of the collaboration, the entire project was conducted with RELEX team members working remotely. RELEX did not have an in-country resource for the project, so a working model was developed that utilized RELEX’s European team and included several visits to Australia by key team members. This model became essential when COVID emerged in early 2020, forcing the project teams to switch to 100% remote delivery. Despite the disruption of COVID lockdowns, all Baby Bunting stores were live by the end of May and integrated DC replenishment was quickly rolled out with all DCs live by August 2020.
“RELEX has helped us improve how we manage and optimize our resources—labor, inventory, and freight,” says Scott Teal, Baby Bunting COO and sponsor for the project. “It is a testament to the RELEX and Baby Bunting team that we were able to deliver a project of this magnitude working remotely and that the project was delivered on schedule and has delivered significant benefits.”
The benefits that Baby Bunting realized from the project directly aligned with their initial goals. By centralizing and automating forecasting and replenishment, they have increased availability by 7% up to 94%. The AI-enabled system has eliminated manual ordering, giving store employees more time to focus on customers, providing the service that Baby Bunting prides itself on. Further, automated ordering driven by demand forecasts has increased inventory accuracy for all channels, considering year-round inventory for Baby Bunting’s seven catalogs as well as seasonal and promotional items, including their signature Storktake events.
The ability to accurately allocate inventory across all channels provided Baby Bunting with efficient seasonal and promotion management. Automated, demand-based ordering helped reduce issues with over-ordering of regular year-round items. Stores can go beyond simple min-max ordering, achieving the accuracy needed to reduce markdowns and inventory value in stores. Using RELEX, Baby Bunting reduced inventory value by 8% in like-for-like stores.
Beyond reducing over-ordering, Baby Bunting is able to more accurately allocate promotional and seasonal items to the stores that need them. Delivering inventory at the right time and in the right quantity to meet specific stores’ demand enables Baby Bunting to avoid dreaded out-of-stocks and the need for costly transfers of goods between stores. Further, removing silos between stores and distribution centers provides visibility into the store needs, enabling suppliers to accurately prepare for orders in advance rather than react to individual store orders.
“Not only do RELEX have a good technology solution, but they also care about the goals of Baby Bunting and actively support us to configure their solution to deliver those goals,” says Matt Rodda, CIO for Baby Bunting. “By understanding our business, the RELEX team was able to quickly and confidently recommend the best configuration without a lot of revision. The relationship is genuinely one of partnership.”
In this video, Sarah Serle, General Manager of Merchandise, and Matt Rodda, CIO for Baby Bunting, share the challenges they faced with siloed and manual ordering processes, why they selected RELEX, and the positive benefits they have seen since implementation.
RELEX and Baby Bunting are continuing their successful partnership by extending the use of the RELEX platform to support supply chain planning for Baby Bunting’s 10+ store expansion into New Zealand and growing ecommerce business.