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Footstar Engages 4R Systems to Optimize Case-Packs,
Allowing for
Maximum Flexibility in Store-level Replenishment
WAYNE, PA—May 24, 2005—4R Systems, Inc., a leading provider of software tools, analytical models and information services that help retailers and manufacturers significantly increase profits by optimizing their inventory and related supply chain decisions, announced today that Footstar, Inc., a leading discount footwear retailer, has engaged 4R to help them achieve the appropriate choice of case-pack design and quantities that provide the maximum flexibility in meeting store-level demand.
"To drive cost efficient replenishment, our products are shipped in case-packs, which are assortments of preset sizes in one package. Having the right case-pack configurations and quantities are crucial to our ensuring that we efficiently meet consumer demand without overstocking the store with excess products in the wrong size," stated Stuart E. Werner, CIO, of Footstar. "With the help of 4R, we are addressing pre-pack optimization more intelligently, enabling us to better match supply with demand in each store, giving our customers the right products in the correct size when they want them."
Case-packs provide retailers with significant reductions in handling and delivery costs, but if they contain product that is not needed in a particular store, often generate costs associated with stranded, excess inventory. Having the appropriate case-packs combinations and quantities at the warehouse determines how well demand can be supplied in high demand sizes while, at the same time, avoiding excess inventory in low demand sizes. Pre-pack optimization identifies the best mix of sizes in each configuration of case-packs as well as the proper amount of each case-pack configuration. 4R's solution accounts for many important factors that come into play when determining the optimal pre-pack configuration, among which the economics of the style being bought, demand by store/size, distribution (warehouse vs. cross-dock), handling and shipping cost, and vendor-driven constraints on case-packs.
"In the effort by retailers to increase profitability, it is crucially important to understand the balance between driving efficient operations and creating a satisfying shopping experience," said Jiri Nechleba, President and CEO of 4R. "We are pleased that Footstar chose 4R to help them drive sales, improve gross margins and enhance inventory productivity by utilizing advanced analytics and optimization in a key area of their supply chain."
About Footstar, Inc.
Footstar, Inc. is a leading discount footwear retailer operating licensed footwear departments nationwide in Kmart and Rite Aid stores. The company also distributes its own Thom McAn brand of quality leather footwear through Kmart and Wal-Mart stores.
About 4R Systems, Inc.
4R Systems, Inc. is a leading provider of software tools, analytical models and information services that helps retailers and manufacturers significantly increase profits by optimizing their inventory and related supply chain decisions. Founded by supply chain experts from The Wharton School and Harvard Business School, 4R provides capabilities that profit-optimize the matching of supply with demand. From initial launch, through replenishment and to end-of-life and for products ranging from short-lived fashion items to long-term staples, 4R provides retailers with solutions that fit their business. Clients using 4R solutions have seen increases in profitability of 1-2% of sales as a result of higher sales levels on lowered inventory. Representative clients include Linens 'n Things, Crate and Barrel, American Pacific, Footstar and Rodale. For more information, visit www.4rsystems.com or call 1-866-4RSYSTEMS.