The performance improvement services provided by Practus assisted the Middle-Eastern chain of hypermarkets in reducing the current shrinkage of inventory reported (2%) of sales to between 0.5% to 1%, in line with the industry benchmark of 0.5%.
|Client Name||ROI||Industry||Ownership||Management||No. of Employees||Size||Project Duration|
|A Chain Of Hypermarkets & Supermarkets||5x||FMCG||Family Owned||Family Managed||~700||$80 million||24 Months|
About The Company
MAAL Group is a family-owned and operated hypermarket and supermarket network established in the United Arab Emirates. Last year, the company’s yearly sales income was over $110 million. MAAL employs over 1,000 people from international and multicultural backgrounds and operates 27 retail and two C&C outlets across Abu Dhabi, Sharjah, and Dubai.
Practus’ Role in Performance Improvement
- A detailed review of the data revealed faults and inefficiencies. Analysis of top SKUs and imported SKUs revealed that $20 million in valued SKUs were overstocked, resulting in $1 million in additional expected financial expenses.
- Identified and assessed chances for additional improvement and cost reduction in areas such as logistics, labor expenses, and DMD function.
- Best practices were used, and approval hierarchies and charts of accounts were reorganized, as well as vendor masters and location masters.
- For visibility, created a complete MIS pack and dashboards, as well as a formal review procedure to identify important gaps or issues.
Impact Delivered in Performance Improvement
- Allow for sufficient lead time for all SKUs to avoid over-and under-stocking. The average margin of the 23 distinct categories is currently 15%, but it may rise to 16% to 16.50% in the future.
- The results of the analysis revealed that optimizing vehicle maintenance, standardizing labor at stores, and offshore DMD duties will save more than $30 thousand per year.
- Current inventory shrinkage was reported to be between 0.5 and 1% of sales, which is in line with the industry average of 0.5 percent.
- To see if there has been a year-over-year growth in debt, a first draught of a three-year military plan was made to reduce long-term obligations to annualized EBIDA in 3.5 years.
- Assistance with providing PL Visibilities to divisional heads and identifying several cost-cutting opportunities—implementation is still ongoing.