Case Study: Automatic Ordering
Automatic Orders – without any manual effort
With neoalto, the shelf does all the work. All stock and goods movements are monitored first-hand, in real time and available everywhere. neoalto‘s Automatic Ordering revolutionizes ordering processes in retail, industry, healthcare and wherever there are shelves.
Learn more about the Automatic Ordering
- no manual ordering effort for orders
- 27 % less process cost
- 75 % improved availability of goods
- 50 % less orders
- 11h per month more time for skilled work
- Automatic Ordering for approx. 100 articles
C-Parts – More than a necessary evil
C-Parts are necessary goods of low order value, e.g. cleaning articles or products for repairs, maintenance and servicing. The effort and procurement costs vs value are particularly high for these products. Often, several people buy C-Parts from various suppliers – mostly on their own authority. In doing so, they consume time and resources, resulting in disproportionately high costs and efforts in the procurement process. Automated order processing, that bundles orders and triggers targeted orders, saves a lot of time and money.
The optimization potential lies primarily in internal process costs. The more frequently order processes are triggered, the greater the saving potential within the company.
How does neoalto Automatic Ordering work?
The neoalto order automation eliminates the manual effort for orders. Sensors in the shelves determine the stocks with the latest laser technology and the smart cloud application knows when and how much needs to be reordered. With each removal, the remaining products are automatically pushed to the front by the POS TUNING push feed system. The IoT technology (Internet of Things) from neoalto measures stock and goods movements directly on the shelf in real time and sends them to the neoalto Service Cloud. There they form the data basis for automatic orders.
Individual frame parameters regulate the stocks according to demand, sales and warehouse capacity for each article. As soon as an article reaches its order stock level, it is automatically placed in the electronic shopping cart and is thus included in the next order. Manual efforts for stock determination, order entry and ordering are eliminated.
The neoalto Automatic Ordering works autonomously. The time-consuming article creation and management in the ERP system is not necessary.
The four benefits for C-Parts management:
- Purchasing processes are transparent and optimized
- Process costs are reduced
- Lower costs for C-Parts (e.g. by increasing order quantities and/or supplier consolidation)
- Resource consumption within the company decreases
Automatic stock control – no manual ordering effort
Perfect availability of goods – 75% less Out of Stocks
Optimized procurement and storage – 50% less orders
Less order costs – Reduction of process costs by 27%
Time saving for skilled work – 11h/month
No investment effort – approx. 2.50 EUR/month per article
How Strenge and POS TUNING use neoalto Automatic Ordering
POS TUNING decided in a first phase to automate procurement for two areas: Maintenance material for machines and cleaning agents. Both goods areas were previously managed manually via SAP. In order to be able to trigger orders, material masters had to be created in each case. Since the consumption was not systematically recorded and booked (e.g. through production orders), various employees checked on sight when and how much had to be reordered. This not only caused an enormous manual effort, but also often led to goods being ordered several times or not at all. The stocks were then either too high or missing goods had to be purchased ad hoc from local sources.
In cooperation with Strenge, the product areas were first checked and as many articles as possible were converted to Strenge. In this way, the number of suppliers could be reduced from over ten to just one. In addition, POS TUNING was able to reduce the number of necessary deliveries by 50% through neoalto Automatic Ordering. In direct comparison to manual processing, POS
TUNING was able to reduce process costs by 27%. At the same time, the availability of goods has improved by more than 75%.
The neoalto Automatic Ordering Service is transparently invoiced by Strenge for POS TUNING. This avoids a dilution of the material prices.
“We would never have believed how much effort we put into processing C-parts every month. Thanks to automatic ordering, which we implemented together with Strenge and neoalto, we were able to reduce process costs by 27%. Now our specialists also gain more than 11 hours every month that they can use for their own tasks.”
Brian Corley, Production Manager POS TUNING
Benefits for POS TUNING
- Focus on one supplier
- Improvement of the availability of goods by 75%
- Reduction of process costs by 27%
- 11 hours additional time for specialist work every month
POS TUNING is a family-run, medium-sized company with one mission: MAKE. SHOP- PING. SIMPLY. BETTER. POS TUNING automates and digitalises the stationary retail trade in order to create time for the most important thing: the customer. With many innovations and strategic developments, POS TUNING stands for quality, professionalism and a cooperative partnership.
For 60 years, Strenge have been the experts in packaging, cleaning, lifting & lashing and occupational safety. A focus on innovation and customer needs ensures first-class products and solutions. Strenge supplies around 8000 customers from a wide range of industries. With neoalto Automatic Ordering, Strenge wants to relieve its customers from the time-consuming administration involved in the procurement of C-Parts.
“We relieve our customers during the process of supply of C-Parts so that they can concentrate on their core business. Thanks to neoalto Automatic Ordering, we were able to replace more than ten suppliers at POS TUNING and significantly expand our delivery volume.
As a next step, we are planning delivery to the shelf via KLTs. This will also eliminate the costs of incoming goods for POS TUNING and we will save on packaging. The automation of C-Parts supply is the future.”
Klaus Strenge, Company owner Strenge
Benefits for Strenge
- Saving of EUR 175 transport costs per month
- Reduction of CO2 pollution by 105 kg per year
- Monthly saving of EUR 163 for order processing
Costs and savings
The table shows the costs and savings for POS TUNING. Strenge was able to reduce the costs for deliveries by EUR 175 per month by halving the number of deliveries. The manual effort for order processing is completely eliminated for Strenge, as the orders flow directly into the Strenge ERP via the neoalto Service Cloud. With 14 previous orders per month, this results in a saving of EUR 163.30 per month (20 minutes at a full cost rate of EUR 35/h).
With the consolidation of suppliers at POS TUNING and the automation of ordering and order processing on both sides, neoalto Automatic Ordering has also led to a strong customer-supplier bond.
|Expenses per month||monthly savings from neoalto services|
|Task||Amount||Duration per task in Minutes||cost per Task||total cost||Amount||Duration||cost per task||total cost|
|manual order handling||7||20.40||11.90||83.30||–||–||–||–||83.30|
|handling of incoming goods||14||11.50||6.71||93.92||7||8.00||4.67||32.67||61.25|
|incoming goods control||14||3.00||1.75||24.50||–||–||–||–||24.50|
|storing in warehouse||14||17.00||9.92||138.83||7||17.00||9.92||69.42||69.42|
|organisation around OOS||16||20.00||11.67||186.67||4||20.00||11.67||46.67||140.00|
|neoalto service cost per month|
|net savings from neoalto system||153.80|
All amounts in EUR
Digitization and sustainability
Automatic ordering has reduced deliveries by half. This saves costs – and protects the environment. Fewer truck trips and less packaging waste are important steps toward better environmental protection and greater sustainability.
- 50 percent fewer orders and less packaging waste
- Reduction of CO2 pollution by 105 kg per year
These figures have also convinced the authors of the “EHI Whitepaper Sustainable Smart Stores 2021”! The project on which this case study is based is one of many exciting digital sustainability solutions presented by the EHI Retail Institute and Microsoft in their joint publication.
A glance at the system
The shelf at POS TUNING
The Virtual Shelf in the neoalto Service Cloud
The order is automatically transferred and process in the ERP-System of Strenge