A Supply Chain Transformation for a Fortune 500 Wholesale Retailer

Introduction

A Fortune 500 wholesale retailer, known for its membership-based model, faced a critical challenge in its supply chain operations. Frequent out-of-stock items led to frustrated customers, abandoned carts, and lost sales. To address this, the retailer’s supply chain engineering team, in collaboration with Kitestring’s durable team, embarked on the Future Inventory project. This initiative aimed to improve inventory visibility by integrating real-time tracking of in-transit inventory across distribution centers, stores, and e-commerce platforms.

Problem Statement

Customers frequently encountered unavailable items during their shopping journey, impacting satisfaction and revenue. Key issues included:

• High Out-of-Stock Rates: 26% of product detail pages (PDP) and 5% of cart items were out of stock.
• Backorder Cancellations: Accounted for 0.5% of orders, leading to lost sales.
• Limited Inventory Visibility: The system lacked real-time tracking of in-transit inventory, making it difficult to manage supply effectively.
• Competitor Advantage: Other retailers provided better transparency on item availability, such as estimated restock dates.

These inefficiencies were estimated to contribute to potential revenue losses of up to $1 billion annually.

Solution

Kitestring’s durable team collaborated with the retailer’s supply chain engineering group to develop a real-time inventory visibility solution.

Key Components of the Solution:

• Data Integration: Aggregation of shipping data from multiple suppliers, including internal fleet and third-party carriers.
• Enhanced Fulfillment Systems: Systems updated to support ordering from in-transit inventory.
• Machine Learning for ETA: Predictive modeling using historical supply chain data to estimate accurate arrival times.
• API Development: Exposed real-time estimated time of arrival (ETA) data to distribution centers, store managers, and e-commerce platforms.

Methodology

Technology Stack:

• Cloud Infrastructure: Deployed on Google Cloud Kubernetes clusters.
• Microservices Architecture: Java Spring-based microservices connected via Kafka for efficient data streaming.
• Agile Development: Iterative approach with daily standups, sprint planning, and continuous testing.

Implementation Strategy:

• • MVP Scope: Focused on tracking inventory from distribution centers to fulfillment centers, with minimal customer impact in the initial phase.
  • Iterative Development: Two major architectural reworks were required to accommodate dependencies on other teams’ data pipelines.

Results & Impact

The Future Inventory solution delivered significant operational and customer experience improvements:

• Increased Sales: Enabled customers to confidently purchase out-of-stock items with real-time visibility into inventory movement.
• Reduced Abandoned Carts: Fewer lost sales due to unavailable items, improving overall conversion rates.
• Better Inventory Planning: Store managers and fulfillment centers could optimize labor and capacity based on more accurate inventory data.
• Seamless Customer Experience: Customers no longer faced uncertainty about item availability, leading to higher satisfaction and loyalty.

Extended Benefits:

• Store Managers: Gained better insights into upcoming inventory arrivals.
• Distribution Centers: Improved capacity planning for workforce and logistics.
• E-Commerce Sales: Enhanced member experience by allowing pre-orders on in-transit inventory.

Conclusion

By leveraging real-time tracking, data science and ML-powered ETAs, and cloud-based microservices, Kitestring’s durable team enabled a Fortune 500 wholesale retailer to optimize its supply chain operations. The Future Inventory project positioned the retailer to compete more effectively with improved transparency, operational efficiency, and customer satisfaction.

How can Kitestring help your business overcome inventory management challenges? Let’s connect to explore tailored solutions for your enterprise.