4R Systems
Driving Inventory Optimization To The Next Frontier

In the real world, retailers make investment decisions every day. How much to buy, where, when and how much inventory to position in a store or a DC are all decisions that have a big impact on profitability and ultimately customer satisfaction. 4R‘s Profit Optimized Inventory approach takes retailers to the next frontier of supply execution and planning by better understanding the impact of these decisions on the ultimate KPI–Profitability! Headquartered in Berwyn, PA, 4R Systems provides retailers with services designed to maximize profitability by the application of sophisticated retail and supply chain analytics.

“4R not only applies efficiency and optimization in their scientific approach but also in the way they deploy their business”

“Traditionally, existing technologies used by retailers today are based on KPI’s such as service levels, turn and store in-stock rates that have the tendency to conflict with each other and are generally a poor performance indicator for multi-channel retailers,” says Mark Garland, Vice President Sales & Client Development of 4R Systems. “When you peel back the KPI layers of all retailers, the one common indicator of performance is “profit”, however large or small the business. Hence 4R starts with the notion that retailers are investors and that inventory is an investment portfolio. Every decision that is made throughout the inventory lifecycle is a “profit” optimized decision and not based on an array of conflicting KPIs.”

The firm has designed the next frontier of inventory and supply chain management with Profit Optimized Inventory. A philosophy that places “profit” at the core of the inventory supply chain decision process and maximizes the economic value of inventory, through an efficient portfolio modeling approach. This approach balances the cost of the inventory against the cost of not having the inventory and the impacts on lost margin which drives overall profitability and customer satisfaction.

4R not only applies efficiency and optimization in their scientific approach but also in the way they deploy their business. The business process is executed through a service subscription model that the retailer requires no upfront investment to get started, which provides for a quick return on investment, no deployment of software or expensive infrastructure and sustained overall profit improvements.

Retailers using 4R have seen consistent profit improvements of hundreds of basis points while better satisfying customer demand and maximizing the economic value of their inventory investment. That’s precisely how it helps retailers such as the Vitamin Shoppe, Family Dollar Stores and Crate and Barrel, to improve and maintain their profitability by millions of dollars. One of the key clients of the firm is Family Dollar, a Fortune 300 company operating value/convenience stores in the U.S., whose main challenge was to find creative ways to improve the overall margin mix as well as top and bottom line performance. After applying 4R’s solutions, Family Dollar saw tremendous changes in their business. “Family Dollar stores understood that as good as they were in what they did and as far as the stock market had rewarded them, they needed to challenge themselves to be better which is why they chose us to better manage their inventory,” claims Garland.

According to Bryan Causey of Family Dollar, “4R’s profit optimized store inventory service has improved our ability to maintain inventory levels that satisfy customer needs better and more profitable for Family Dollar.”

Retailers now have the ability to drive profit improvements and balance on-shelf availability objectives with inventory objectives to satisfy shoppers, which improve cash flow and reduce working capital with 4R profit optimized inventory services.