Online Fitness Retailer Sees Back Orders Drop by 45%
Challenge
More than 32 million unique visitors head to Bodybuilding.com each month, making it one of the world’s largest online fitness and sports nutrition sites. From fulfilment centres in the UK and United States, the company ships fitness and nutrition products to customers in more than 150 countries.
When a popular bodybuilder unexpectedly posted a YouTube video quoting Bodybuilding.com as the place to purchase his 10 favourite supplements, demand spiked. One item that normally generated 30 sales per week sold nearly 800 units in a matter of days.
With unplanned celebrity endorsements causing demand spikes on top of an already highly-promotional selling environment, Bodybuilding.com needed more visibility to make better planning decisions and respond more accurately to customer demand.
The company’s planners wanted a better way to identify under- and over-forecasted products to avoid running out of stock and buying excess inventory.
Solution
Bodybuilding.com is able to proactively react to its market and produce a better forecast by implementing alerts linked to the Logility demand, inventory and replenishment planning system.
One of these alerts is Demand Planning Compared Forecast to Future Orders, which captures any item exceeding the forecast and highlights ones that Bodybuilding.com will not be able to meet with inventory on hand and expected inbound orders. At the start of each week, Bodybuilding.com runs this alert and then works with vendors to locate or produce more inventory as needed.
The Logility solution allows alerts to be customised and items prioritised for review, which helps planners quickly identify issues by priority level and take rapid action.
Impact
During the first 18 months of using Logility’s advanced analytics and activating alerts, Bodybuilding.com has seen back orders drop by 45%. In addition, overstocks are down 10% and total inventory has also reduced by more than 10%. Month on month, the business is seeing its forecast accuracy improving. That’s not just a benefit for Bodybuilding.com, but its customers too.
With the Logility solution providing Bodybuilding.com with greater visibility for better planning, the company has been able to reduce its US fulfilment centres from five to two. The business was able to quickly reconfigure to its new distribution network by leveraging Logility’s capabilities to adjust safety stocks and shift demand to fulfilment centres. Logility made it possible for Bodybuilding.com to make these major changes without increasing its back order percentages.
