How DJ Direct cuts 16 days from their average purchase order cycle time with Goflow Inventory Forecasting software

The Company: About DJ Direct

DJ Direct is a multi-channel ecommerce seller with about $120 million in annual sales. They sell on many channels, including on Amazon, eBay, via their own website and in their brick & mortar shops.

DJ Direct operates with around 20 buyers, selling their own brands as well as third party brands. From products locally sourced in the USA and other sources overseas, they cater to a wide range of industries including homegoods, construction equipment, toys and much more.

DJ Direct's journey with Goflow began approximately five to six years ago, and their active involvement in the software’s beta testing phase allowed them to suggest features that would better suit their needs. These days, the software is an important part of their purchasing decisions and overall business operations.

"Goflow is indispensable for our operations. Every purchasing agent uses it daily to streamline tasks and make informed decisions. It’s not just a tool, it’s the backbone of our efficiency."

DJDirect
Ruben Werczberger, CEO

Their diverse product range comprises both their own brands and third-party brands, sourced both locally and internationally, which leads to variations in product lead times. Operating from four U.S. warehouses adds another layer of complexity to their inventory management.

The Challenges

DJ Direct, a dynamic and multi-channel e-commerce retailer, faced numerous challenges in their inventory management due to a complex business model involving 20 buyers, diverse product categories, multiple sales channels, and several warehouses.

“In the past, the complicated process of placing a purchase order overseas could take their buyers an average of 21 days. Now, with 90% of the data supplied automatically in Goflow, buyers are able to cut this task down to 5 days - even for complex purchase orders. That’s a time savings of 16 days from every purchase order cycle!”

DJDirect
Ruben Werczberger, CEO

In this case study, we’ll take a closer look into how DJ Direct uses Goflow Inventory Forecasting Software to not only reduce time spent on purchase orders, but also achieve an accuracy rate of 99% and prevent stockouts and overstocks.

Before implementing Goflow Inventory Forecasting Software, DJ Direct grappled with several challenges:

Diverse Product Sources

Since DJ Direct imports their own brands, as well as third party brands from overseas, this means that the lead time for those products is much longer. As a result, they run the risk of unforeseen circumstances which might lead to inventory shortages.

Multiple Warehouses

Managing inventory planning across four warehouses requires precise forecasting and adds an additional layer of challenges. They needed a way to estimate the inventory they needed, as well as which location they would need it in.

Inefficient Tools

Before using Goflow, DJ Direct relied on in-house, non-live data tools that were prone to inaccuracies. Their buyers were relying on manual data gathering and were constantly updating their own tools and spreadsheets. These solutions were not sustainable for the growing complexities of their business.

The Solution: Results and Benefits of Using Goflow

Here are some of the reasons why Goflow has become a critical forecasting tool for DJ Direct:

99% Accurate Purchase Orders — 76% Faster

Before using Goflow, DJ Direct’s buyers could sometimes take up to two or three weeks to place a PO overseas. Goflow cut down this time significantly, because 90% of the data is already there within the software.

Ruben estimates that the average time it takes buyers to create a purchase order has decreased from 21 days - to a mere 5 days. That’s a 76% improvement!

For a company with 20 buyers who are making thousands of purchase orders per year, it’s easy to see how quickly the value of these time-savings can add up.

“It also cuts down on mistakes and the human errors of pulling data from different sources and matching it up,” adds Ruben. DJ Direct now boasts a 99% Purchase Order Accuracy Rate, which means they have effectively minimized wrong items, incorrect quantities or inaccurate vendor details.

Goflow also cuts down on buyers making incorrect assumptions on what they had sold, because they didn’t have the hard data.

Real-Time Data

Before using Goflow, these supply chain forecasting problems were addressed with ad hoc solutions such as Excel spreadsheets with formulas. These in-house systems, however, didn’t have real-time data so they were ultimately limited and caused buyers to make inaccurate decisions.

“Before, you had to constantly download reports from Amazon and other channels,” Ruben explains. “And by the time you gathered all the information, it already criss-crossed with new information. For example, there might have been a new PO put in that was not on your sheet. You were ordering double because you didn’t know you had a PO out there.”

“So, it needs to be live data in order for it to work.”

Goflow provides the real-time data that makes it possible to avoid overstocking or understocking products. This helps to avoid operational inefficiencies, as well as potential revenue loss.

Stockouts cause considerable harm to the growth of a business, as they not only result in loss of revenue but also increased backorder cost and damage to your brand’s reputation. According to this study reported in the Harvard Business Review, the potential cost is more than most realize and retailers could lose nearly half of intended purchases when their customers encounter stock-outs.

Thanks to Goflow, DJ Direct was able to reduce stockouts by 22.5% over 8 weeks, which resulted in a 3% increase in sales.

Per-Warehouse Forecasting

Goflow's inventory forecasting module was initially company-level focused. However, with DJ Direct's feedback, it evolved to provide per-warehouse forecasting, aligning with their multi-warehouse operations.

“The more detailed per-warehouse forecasting was something that was very important to us,” said Ruben. “In addition to our own warehouses, we distribute stuff into fulfillment centers as well. So, just running numbers without getting detailed warehouse numbers was inaccurate. It just didn’t make sense.”

DJ Direct has even used this feature to help with routing inventory as well as buying. If they have overstock at one warehouse yet are understocked at another warehouse, they can quickly and easily create internal transfers. This helps to make purchasing decisions even more tailored and accurate.

“Quite frankly, the numbers speak for themselves. We’re seeing a 76% improvement in PO cycle time, and 99% order accuracy rate with Goflow Inventory Forecasting, which is pretty amazing.”

DJDirect
Shulem Eisenberg, Purchasing Manager

Enhanced Manager Oversight

Using Goflow also means that managers are able to see all the data that buyers are working with, without having to ask them for the backup or figure out what matrix they used to make their decisions. This saves managers a lot of time and makes their job much more streamlined.

“As a manager,” says Ruben, “when reviewing POs that buyers put in, it gives me a tool where I can double-check and see, based on the forecasting, if the PO makes sense.”

With powerful on-demand interactive graphs and reports, it’s much easier for managers to oversee what’s going with clarity and control.

The forecasting tool provides data analytics and reporting capabilities, allowing for informed decisions about pricing, promotions, and product selection based on historical sales data and customer demand forecasts.

Conclusion: The Power of Data-Driven Decision Making

If you’re spending too much on things that aren’t selling, or if you’re missing out on sales because you’re understocked, these are both problems. The real-time data supplied by Goflow helps to avoid these issues - allowing them to make 99% accurate purchase orders in 5 days, rather than three weeks.

Goflow Inventory Forecasting Software has not only resolved DJ Direct's complex inventory management challenges but has also paved the way for streamlined operations, reduced labor hours, and enhanced decision-making.

Designed specifically for e-commerce businesses, Goflow harnesses the power of predictive analytics to monitor sales, orders, daily inventory, vendor activity, costs, lead times and more. This real-time data allows the software to make accurate demand predictions and provide precise purchasing suggestions. Find out more about how Goflow’s inventory forecasting software works here.

“Now, our buyers are confident telling the vendors that they’ll have the PO by the end of the week,” says Ruben. “They know they have the data and they just have to sit down and do it.”

In the past, the same buyers didn’t have a clearly defined time scope of how long purchase orders would take and they were often making inaccurate assumptions about customer demand.

As DJ Direct continues to expand its business, opening additional distribution centers (DCs), they anticipate an increased reliance on Goflow Inventory Forecasting Software. The tool's simplicity and efficiency align perfectly with their growth strategy.