flaconi improves out of stock rate um 30 %

With more than three million active customers, flaconi is one of Germany's leading online shops for beauty and perfume. The online shop's extensive portfolio includes approximately 1,000 national and international brands with 50,000 products. All product segments are covered, from drugstore and natural cosmetics to premium and luxury cosmetics. The company employs more than 700 people and is headquartered in Berlin, Germany.

SUMMARY

flaconi faced many challenges that prevented them from establishing a complete digital connection with their suppliers, leading to business continuity issues and risks related to stock shortages. They sought a partner that would fit their agile working style, offer innovative technologies, and be able to provide an excellent experience for all partners involved.

By switching to Procuros, all suppliers could be connected via a single API, which helped reduce complexity for stakeholders, improve error handling, and promote digital order processing.

After the first few months, the use of Procuros has led to a supplier satisfaction rating of 9.1/10. Looking ahead, flaconi is aiming for an EDI rate of 95% and plans to introduce additional message types to improve inventory forecasts and enable just-in-time ordering.

THE CHALLENGE: IMPROVING INVENTORY LEVELS

Given the extensive product portfolio, it was obvious to use digitized order-to-cash processes. The tech stack at flaconi already consisted of various tools and providers in order to digitize a large part of the processes in view of the heterogeneity of the supplier base. The technical landscape was divided into traditional Edifact connections via X400 and file-based exchange and ERP add-ons.

With a large number of providers and solutions, a good EDI message rate of 85% has already been achieved. Nevertheless, a gap in digital connectivity remained, which led to

• Challenges in business continuity in order management
• Increased risk of out-of-stock situations and corresponding sales losses
• Compromised supplier experience

To close the gap, the supply chain teams hoped to find a new solution with a provider that would help them streamline their processes based on a smooth connection process.

THE SEARCH: AN EXCELLENT PROCESS EXPERIENCE FOR ALL PARTIES

The criteria for finding a new partner were varied, as flaconi wanted to solve several problems at once:

• All suppliers, from small local brands to large international retail names, must be integrated: The partner must have a wide range of integration options to connect with a variety of suppliers.
• Working methods must be consistent: flacon always works in an agile manner in terms of processes and communication and expects the same agility from a partner. They need fast response and solution times in order to move forward quickly.
• The focus is on the supplier experience: flaconi knows that the way its provider communicates and works with its customers/brands reflects back on it. Therefore, it is important to find a provider that offers an excellent experience and takes a creative approach to solving challenges and improving processes.

In summary, flaconi was looking for modern and efficient technology, coupled with a strong focus on seamless collaboration. Only by combining these two aspects could they be certain that they would finally be able to consolidate all technical integrations and switch to a single provider with calculable risk.

THE SOLUTION: EXCITING TECHNOLOGY FOR CONNECTING ALL SUPPLIERS

With Procuros, they have found a partner that meets both requirements: innovative technology paired with a great experience for both flaconi and their suppliers.

The new technology is based on a single API connection, which offers greater flexibility for additional use cases in the future and significantly simplifies setup and maintenance.

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Flaconi also decided to use this transition to consolidate and renew the existing process logic. To minimize the risks involved in switching from the traditional, file-based approach with the old process logic to a new API-based approach with new process logic for the largest suppliers, the team opted for a special approach. This made it possible to start with a file-based connection and then switch suppliers or revert to the old integration if there were problems with the new process logic.

"This flexible, iterative approach has really helped us to accelerate the project and reduce risk," says Simon Berreth, Team Lead ERP and Finance.

The API-based approach not only reduced interface complexity, but also enabled functional and automated error handling. Instead of involving the IT department in operational purchasing processes, content errors can be forwarded to the appropriate contact persons and processed within the purchasing department using a self-service procedure. This enables errors to be corrected much more quickly. After going live, the IT department only had to deal with a single error, which was quickly resolved.

As a result, not only was flaconi's experience significantly improved, but so was the experience of suppliers with user-friendly and easy-to-use connection options. In addition, support materials and an intuitive portal for suppliers were integrated. This led to them rating Procuros 9.1/10 for the experience they had when connecting for the first time. Ease of maintenance and troubleshooting were also taken into account.

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Since November 2023, the consolidation of the three different EDI systems has been consolidated into one connection in a very short time. flaconi has also seen a significant increase in digitally sent orders and an increase in automatic invoice posting. These improvements led to lower internal expenses in accounting and SCM teams, as well as a 30% improvement in the out-of-stock rate.

NEXT: TAKE ADVANTAGE OF OTHER BENEFITS OF THE FLEXIBLE PLATFORM

Thanks to its technologically flexible platform and a quick and easy connection process for suppliers, flaconi is able to further increase its EDI message rate (currently 95%) and easily introduce additional message types such as order confirmations.

The transfer and use of additional message content along the order-to-cash process is now also possible with Procuros. This will help to further improve inventory forecasting and avoid problems. Ultimately, this is a prerequisite for introducing just-in-time ordering to improve cash flow. flaconi also plans to continue investing in closer cooperation with suppliers by enabling even more use cases in the future.

We thank you for your trust and look forward to supporting flaconi on its journey going forward.