Saving Store Costs with Analytics

Background

Thangamayil Jewellery is among the fastest growing companies in India, with a chain of jewellery retail stores across several districts of Tamil Nadu--the state with the largest share of India’s total gold consumption. In the past year, four new outlets opened, bringing the total number of showrooms to 31. The Madurai-based company with 1,200 staff deals in gold, silver, diamonds and platinum with a majority of the ornaments bought from dealers in other states.

The challenge

Inventory and re-order levels were a major challenge for every store at Thangamayil Jewellery which had manual systems using Excel spreadsheets for business intelligence (BI).

There was no near real time access to inventory as also in-store detailed information which was easily available at the close of business each day. Dependency on store resources was high. In reality, actual store inventory could only be seen the following morning. Re-order levels and item needs were too complex to satisfy customer demands resulting in a loss of sales. It needed a solution that could not only fulfil business needs but also set an example of how an emerging technology could act as a game-changer.

The Solution

The Jewellery firm considered a local BI vendor using Microsoft SQL Server tools, but with help from Qlik Partner IBIZ Consultancy Services India, unearthed the power of QlikView 11 business discovery software. The company assisted with sales, training, deployment and knowledge transfer.

IBIZ Consultancy Services helped the organisation with the initial applications which were about getting high visibility of inventory. Previously, there was no real insight and what could be seen were three to five showrooms at a time. The business suffered.

Yadeenthra Nathan, Executive Information Officer, Thangamayil Jewellery

Yadeenthra Nathan, Executive Information Officer, Thangamayil Jewellery says, “The complete return on investment in just one year with QlikView is amazing. We’ve also reduced costs at our stores by 55 per cent with near real time sales seen by all stores at one place. This was achieved by using budget management dashboards in QlikView to  cut costs at each store.”

Benefits

There were multiple benefits as it delivered 50 per cent stock level, reduced expenses per store by more than 55 per cent, and obviously, helped boost employee performance. The solution has helped improve the usage of human resources and boosted profitability and productivity. Also, employee performance analysis has provided insights into employees who do their jobs perfectly.

“Our HR application is perfect for selecting the right person for the right job in the organisation,” says Nathan.

Stock levels reduced by 50 per cent

The IT team created multiple applications for its employees ranging from senior management to operations, inventory control, sales and purchasing.The key here is that QlikView provides details of sales growth year on year, thus helping the team provide the right stock at the correct showroom.

Yadeenthra says, “Once we have the parameters, it takes around three days to build a new dashboard. We can see what’s moving in our stock and what isn’t and where customer preferences lie. This has enabled us to reduce our stock levels by around 50 per cent--so some of the stock isn’t just sitting there collecting dust any more.”

Sales analysis and margins improved

The business is now far more agile; and in future, the company will introduce QlikView on mobile devices.Earlier, re-order level and item needs were not clear enough to satisfy customer needs. Yateendra and team can now see inventory in near real time which results in timely replenishment based on actual product sales and can get an accurate budget forecasting to take decisions on objective information.

QlikView has also helped the company improve its margins. Nathan points out, “We have come down from five to seven per cent margins before QlikView to something like three to five per cent on ornaments, for example, which is where we want to be to ensure customer satisfaction. This has been especially important in a year when the trade of gold has been dropping due to government restrictions in India. As a result, we are able to transfer these savings into reduced prices for our customers.”

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