Newcakes releases over €800,000 of extra cash through reducing stock

NewCakes offers end consumers and retailers a selection of over 5000 different baking products. Following several years of rapid growth, the warehouse was becoming ever more cramped as their ecommerce and wholesale business continued to expand.

However, since implementing Slim4, stock has been reduced by 40%, freeing up over 800,000 euros of cash. “Thanks to the additional space created in the warehouse, we have been able to avoid moving to new premises and we not have more freedom to explore new markets,” explains Nijboer, CEO at NewCakes.

In 2005, Inge Zaagsma and Danny Nijboer launched the Dutch webshop Deleukstetaartenshop.nl. As the popularity of home baking continued to grow, the couple soon decided to add a wholesale operation to their offering. “There has​​​​​​​ been times in which the year on year turnover has tripled. Managing this growth has been our biggest challenge for a number of years”, explains Nijboer. To complement the wholesale operation, the company also introduced their own line of baking products. These products are now also available via their webshop, wholesale outlet and through eleven retail stores.

Greater insight into seasonal patterns

Thanks to Slimstock’s inventory optimisation solution, Slim4, NewCakes now have greater control over their fast growing assortment. “Given that our existing ERP was not providing us with sufficient insight into demand patterns and emerging trends, we held high levels of safety stock and as a consequence, high levels of excess stock. Before using Slim4, the parameters used to manage inventory remained static throughout the year. However, Slim4 highlighted the seasonal influence on demand and thus helped us to manage items more effectively. As a result, in just a matter of months, inventory levels were decreased by up to 40%.”

Quick implementation

“Thanks to the team at Slimstock, Slim4 was implemented in a fast, professional and customizable manner. The expert consultants knew what they were talking about and took great pride in helping us”, explains Nijboer. The software integrated with NewCakes’ Mamut ERP-system without any issues. “Safe in the knowledge that Slim4 will provide sufficient support, I can now allow our inventory managers to take far more responsibility. This, in turn, has saved a huge amount of time. The fact that Slim4 has the capability to keep the total inventory under control is also a huge advantage for us”, states Nijboer.

Management by exception

Nijboer praises the management by exception principles of Slim4 which also allows the team to closely monitor new items as well as the insight provided by the economic order quantity functionality of Slim4. “The system shows us exactly what happens to the inventory and service level if, for example, we cut the order quantity in half or doubled the order quantity. This in turn has helped improve the way we work with suppliers and thus should enable further inventory reductions: something which has been a major issue in the past.”

With an inventory value of over two million euros, the 40% reduction in inventory has released no less than 800,000 euros of cash. “I know that’s what they promised me beforehand, but it’s still unbelievable. The fact that we are still reducing inventory means that we are able to create more space in our cramped warehouses. As a result, we have been able to hold off moving for at least ten more years. The extra cash has given us the freedom to invest in new products or markets. Furthermore, we can now afford to take more risks.”