Over the past few months on this blog, we have sporadically covered the complex topic of statistical inventory sampling. After a brief introduction to this highly effective and accurate counting procedure, we dug deeper into the procedural aspects and covered the two main mathematical models used in inventory sampling: difference estimation and sequential testing. These articles provided readers with a theoretical background and we were able to generate some great discussions both here on our blog as well as on LinkedIN.
This article will serve as an attempt to bridge the gap between theory and practice with the presentation of a firm using this method (with a twist) to count its inventory. K&L Ruppert, a German fashion house, turned to the statistical sampling approach eight years ago, and has never looked back. In fact, riding the technology wave, K&L Ruppert, since 2010, has been conducting its inventory counts using the statistical sampling approach in the cloud (hence the twist).
K&L Ruppert is one of the leading German fashion houses and has been championing enthusiasm and competence in fashion for 49 years. The company’s first store was opened in 1962 in Weilheim (close to Munich) Germany. Today, the medium-sized family-owned company runs 64 fashion houses and fabric companies, with a total storage space of 130,000 square meters, located in south Germany.
All stores are supplied by the central warehouse in Weilheim, which currently moves around 15 million items per year – around 77,000 each day. The central warehouse itself receives supplies from 29 countries worldwide. One could imagine the importance of accurate inventory data in such a dynamic, highly active warehouse. One could also imagine the headaches associated with conducting full physical end-of-period counts in such a fast-paced distribution center. However, in 2005 K&L Ruppert began using the statistical sampling approach to complete its inventory counts. The results have, time and again, proven to be just as accurate, if not more accurate, than full physical recordings. The company does not have to shut down its warehouse for counting purposes and human error has been reduced to a minimum.
I encourage you to request a copy of the K&L Ruppert success story and read about how the company has been using this counting method successfully for over eight years, including three years in the cloud.