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We decreased the seasonal stock value by 1.5 million euro in one year - SIKO


SIKO is a prominent Czech company with an interesting history. To make a long story short, SIKO is a family-owned Czech business with a growing network of branches. Currently it has 29 branches (including 8 branches in Slovakia) and an additional 17 partner branches. Consolidated revenue is 2.4 billion CZK, which is generated by 600 employees. With more than 50,000 items on offer, SIKO is the largest bathroom and kitchen expert in the Czech Republic - it serves more than 500,000 customers a year. Immediate availability of key products at the stores is a rule, which SIKO wants to offer to its customers every single day.

“In the seasonal peaks, the stock values reached 20 million euro.“

SIKO’s situation before implementing Planning Wizard substantially differed from our average customer’s. SIKO always had a feel for an efficient inventory management and sales planning. Retrospectively, these processes were already well managed in an old DOS system, which was over time replaced with a SAP system implemented by Mibcon. As a part of the implementation, SIKO brought its know-how to SAP and constantly worked on its improvement. Before introducing Planning Wizard, item availability was already at 97%. In seasonal peaks, up to 20 million was locked in the inventory. Mibcon actively assisted also with the implementation of Planning Wizard.

A special, and in the Czech environment, rather rare deal increased SIKO’s top management’s motivation to buy Planning Wizard: the project was to be financed in a 100% success fee regime. This means that the fees connected with the implementation and the new software were to be charged only if the pre-defined measurable objectives would be met.

KEY INDICATORS FOR THE SUCCESS FEE:

  • Increasing the item availability from 97% to 98.5%
  • Increasing the revenues for new items that can be stocked thanks to inventory levels reduction for the common products. (Note that inventory level reduction was only a secondary effect in this project.)
  • Satisfaction of the owner (subjective assessment based on the success rate as viewed by the co-owner Tomáš Vala)

AS YOU CAN SEE FROM THE GRAPH, PLANNING WIZARD, AFTER ITS IMPLEMENTATION IN MAY, RESULTED IN THE EXPECTED IMPROVEMENT OF THE KEY INDICATOR OF AVAILABILITY, WHICH LED ALSO TO MEETING THE CRITERIA FOR THE SUCCESS FEE.

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THIS INDICATOR IS ALSO CLOSELY INTERCONNECTED WITH THE LOWERING OF INVENTORY LEVELS FOR COMMON PRODUCTS, WHICH BROUGHT THE NEEDED WAREHOUSE CAPACITY FOR STOCKING OF NEW PRODUCTS.

Inventory level reduction was possible even though new branches were opened this year, including the most luxurious and the largest bathroom studio in Prague - Zličín.

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AN IMPORTANT STEP OF UNSTOCKING OF THE UNNECESSARY ITEMS IN INDIVIDUAL BRANCHES FOLLOWED, ACCOMPANIED BY STOCKING OF APPROPRIATE, I.E. “HEALTHY” PRODUCT RANGE.

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