flaconi reduces out-of-stock rate by 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 around 1,000 national and international brands with 50,000 products. It covers all product segments, 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 were looking for 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 ordering Procuros, all suppliers could be connected to each other via a single API, which helped reduce complexity for those involved, improve error handling, and promote digital order processing.

After the first few months, Procuros has been used to achieve 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 just-in-time ordering.

The challenge: improving inventory levels

Angesichts des umfangreichen Produktportfolios lag es nahe, digitalisierte Order-to-Cash-Prozesse. The Tech-Stack by flaconi existing already from different tools and providers, to make into the heterogenity of the supplier base, a major of the processes to digitalization. The technical landscape was divided in traditional edifact-connections about X400 and file based exchange and ERP add-ons.

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

• challenges in relation on the business continuous in the contract management, a increased risk that not more on stock is and corresponding sales losses, and a risk of risk of the supply.

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

The search: An outstanding 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.
• Workflows must be consistent: flaconi 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 to get results quickly.
• The focus is on the supplier's experience: flaconi knows that the way its supplier communicates and works with its customers/brands reflects back on it. Therefore, it is important to find a supplier 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 sure 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, you have found a partner that meets both requirements: innovative technology paired with a wealth of experience for both flaconi and its suppliers. The new technology, which is based on a single API connection, offers greater flexibility for future use cases and significantly simplifies setup and maintenance.

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 hybrid approach. This was made possible by starting a file-based connection and then switching to the provider in 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, ERP and Finance Team Leader.

The API-based approach not only reduced the 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 person and processed within the purchasing department using a self-service procedure. This enables much faster troubleshooting. 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 provider's experience with user-friendly and easy-to-use connection options. In addition, support materials and an intuitive portal for suppliers were integrated. This also included the fact that they scored 9.1/10 for the experience they had when connecting for the first time. Maintenance friendliness and troubleshooting were also taken into account.

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In November 2023, three different EDI systems were consolidated into one connection. flaconi also saw a significant increase in digitally sent orders and the adoption of automatic invoice posting. This led to lower internal costs in accounting and SCM teams, as well as a 30% improvement in the out-of-stock rate.

Next: Take advantage of additional benefits of the flexible platform

Thanks to its technological flexibility platform and a quick and easy onboarding process for suppliers, flaconi is able to continue to easily expand its EDI news feed (currently 95%) with additional notification types such as contract confirmation.

The transfer and use of additional message content via the order-to-cash process is now possible with Procuros. This is an advantage for improving inventory levels in advance and avoiding problems. As a prerequisite for improved cash flow, final positions are provided for improved cash flow. The flaconi plant also continues to work closely with suppliers to enable further use cases in the future.

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