Who We are

At Hona Analysis, a professional services firm, we are transforming supply chain of e-commerce, retail and manufacturing businesses FROM being out of stock, inefficiencies, trying different software and people to help, TO having not under pressure, efficient replenishment process, not lost sales, immediate cost reduction, cash flow improvement and an impressive increase in the revenue.

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Our Solution

What is the Key Problem

 

  • E-commerce businesses are growing very fast. They sell through different sales channels (like Amazon, eBay, their own websites, etc.) and different distributors across the globe. They might have a couple of warehouses, and, in addition, as most of them import from Asia, they experience very long lead times (3-6 months). At some point these businesses are lost in their inventory management. They don’t know what, how many and when to bring the products from their suppliers to each of their warehouses and distributors. Amazon has a special concern from the business owners, as it charges high fees for the inventory, if is not moving after a period of three months. In contrast, big distributors, like UNFI, charge their suppliers for shortages – items that were not supplied as per the purchase order.
  • Businesses try to hire different logistics persons and even experienced inventory managers, but the problem with these people that they don’t work with statistical tools, and many times, from our experience, they just estimate numbers. We start working with clients and realize that nobody has never looked at the big picture of the organization, analyzing the whole data of the sales and working with statistical tools.
  • A lot of businesses go for very classical approaches of predicting the demand, such as the average of the previous months’ sales or “the same as the last year” approach. These are totally wrong approaches, as they don’t capture seasons, trends or any upcoming marketing events within the forecasting process.

The Solution

 

In our company we have developed an own innovative and systematic approach to the inventory management for these complex e-commerce businesses (but also for any retail and manufacturing business). The approach is to always look at the big picture of the operations, analyzing and leveraging the whole data, and create a professional sales forecast for the further analysis, as the basis of all the inventory planning and supply management.

  • We gather the historical data of sales from all the client’s systems (Amazon, Shopify, distributor systems’ reports, etc.), compile it and upload into a statistical software. We leverage the data, seeing the graphs of the sales as per sales channels, categories of products and more; and apply statistical models, events, dynamic regression diagnostics and judgmental approaches in order to perfectly forecast the future sales. We track the forecast accuracy and improve it on a monthly basis. We can identify seasonality, trends, opportunities and other challenges, if applicable, through the forecasting process. We can create sales forecast for new or not having historical data products too.
  • Based on the sales forecast, current inventory levels, incoming orders, a desired service level and lead times, we build an improved inventory replenishment process, ensuring the company maintains enough stock levels to satisfy all customers’ sales opportunities, and not to be overstocked at the same time. The inventory control process includes safety stock level, order quantity and reorder point recommendations for each SKU.
  • We are doing analysis of slow-moving items, dead stock, A Pareto items, supply days, COGS, CAGR, cost benefits of different logistics scenarios, and much more. We are optimizing order sizes, order frequency, container capacity and whatever is relevant for the client and project. We are creating KPIs specifically for each business and making decisions accordingly.