Sport Zone Case Study

Company Overview

Sport Zone is the largest sports retail company in Portugal. It started its activity in 1997 and since then has been dedicated to promoting sports by offering the best sports goods and sportswear at highly competitive prices. Sport Zone is owned by the largest private non-financial Portuguese group – Sonae Group – with more than 40,000 employees in 29 countries. Sport Zone began expanding into the Spanish market in 2008, by opening its first store in Madrid. Today, Sport Zone operates over 30 stores in Spain.

Key Challenges

Following a steady annual growth of about 20% in the first 10 years of operation, Sport Zone encountered the classical conflict of having an overstock of slow-moving products while also suffering from stockouts of fast-moving products. Sport Zone relied mostly on a forecasted merchandise plan created at the beginning of the season. This plan was executed in a push-based mode.

Store managers had been constantly requesting additional replenishment, which was no longer available in the DC, when in fact many of the items were still widely available in other stores. At that time, Sport Zone was trying to handle a universe of 15 million SKU@Locations. In response to this issue, Sport Zone formed a dedicated team of 20 people, trying to get the right inventory to the right place at the right time. This team spent 90% of their time on the phone with different store managers.

The Solution

The implementation of OneBeat started as a Proof of Concept for a duration of six months. Three stores were chosen to assess the value of the software. During the POC time, initial buffer targets were calculated by OneBeat and challenged on a daily basis to capture market behavior in real-time. Results exceeded expectations with an average stock reduction of 15%, while availability increased by 20%.

After that, OneBeat’s Depth Management solution was deployed throughout all Sport Zone stores in Portugal and Spain. Stock buffers were introduced to the entire universe in all stores (20,000 SKUs per store), and the company moved from “Push” mode to “Pull”. The initial drop to the stores was reduced by up to 70%, freeing a lot of stock to be available for replenishment later on in the season for the stores that actually needed it.

Results

OneBeat helped Sport Zone to reduce the stock levels from an average of three units per item to as little as 1.3, without jeopardizing the merchandise plan and the store’s layout. Stockouts continued to decrease over time. In 2016, availability was at 97.5% throughout the entirety of the chain; in mainland stores, availability was higher than 98%. In addition to the financial and operational improvement, OneBeat gave the Sport Zone headquarters team full control and visibility over the supply chain. The team of 20 people which was established to balance the inventory