Case Study
How Casas Pedro Reduced Out-of-Stock Rates and Average Storage Time with Automation
Summary: Casas Pedro's supply process was initially based on observations by managers and stock clerks, who manually filled out and emailed requests. In 2016, the company adopted an AI solution focused on demand forecasting. This tool began issuing order recommendations to the stores, optimizing a crucial part of the work and allowing managers and stock clerks to focus on more relevant business activities. However, the process still lacked visibility, and the teams involved couldn’t communicate with managers swiftly enough.
In 2023, Visagio introduced Pipefy to Casas Pedro, standardizing the distribution process, automating all related communication, and ensuring managers received recommendations on time. This innovation enhanced key retail indicators: the out-of-stock rate, which can cause financial losses from 5% to 10%, dropped by 5% after Pipefy’s implementation. Additionally, the average time products remained in stock decreased by 17%.
About Casas Pedro
Founded in 1932 as a small grocery shop by Lebanese immigrants, Casas Pedro is a well-known retail brand from Rio de Janeiro, Brazil. Over the last decade, the company has expanded from ten to 65 stores across the state of Rio and has grown to 1,500 employees. The brand specializes in bulk spices and seasonings, among more than 2,000 items. In 2021, Casas Pedro launched its own white-label products, and less than three years later, the company had 106 private-label brands produced by 21 suppliers from across Brazil.
The problem: finding the ideal solution for a less-than-ideal process
Like many retail businesses, Casas Pedro wanted to increase supply process precision, avoiding waste and stockouts while increasing customer satisfaction. Originally, the process followed these steps:
- Managers and stock clerks manually identified which products needed replenishment.
- They sent this list by email to the distribution center.
- The distribution center prepared the requested products.
- The stores received the requested products.
A significant amount of time was wasted in this manual process—managers dedicated an entire workday on average to restocking, time that could have been spent on more strategic activities. Therefore, the company asked Visagio, a consultancy focused on digital product development and business transformation, to create an AI solution. The goal was to use the company's ERP history to create a tool that forecasts daily demand for each store, considering sales behavior over the years, seasonality, and other factors.
The Solution: A New Orchestration Layer
Deployed two years ago, the AI solution improved the supply process. Managers received a pre-filled spreadsheet from the algorithm with restocking suggestions, eliminating the need to spend time looking at inventory and trying to predict what would be sold in the coming days. They only needed to adjust a few items on the received table and send it to the distribution center via email.
However, the process was not running ideally. "We had many issues with spreadsheet and SQL failures that ran overnight. In the morning when the store managers were supposed to receive the replenishment recommendation, they didn’t. Then someone had to access the database, see what stalled, and fix the spreadsheets until the store received the email and could continue the replenishment process," says Ivo Ferreira, CEO of Casas Pedro.
According to Ferreira, the automatic generation and issuance of spreadsheets frequently registered errors. Since the team did not use a process management platform, store managers often did not receive the documents. Moreover, the internal team was unaware of the error until notified by the managers.
Almost every day, Casas Pedro's IT team and the employee responsible for the supply operation spent up to an hour resolving these errors. To avoid missing the replenishment window and running risks, managers often resorted to ordering products based on the AI's suggestion, which was not ideal.
This process led to potential stockouts due to reliance on outdated data—a risk to sales and the reputation of Casas Pedro, whose main competitive advantages are stock availability and service. According to data from the Brazilian Association of Supermarkets (ABRAS), up to 42% of sales losses occur due to product stockouts, and an estimated 32% of consumers turn to competitors to purchase the item.
Internally, the constant need to resolve errors led to relationship problems between management and the service area, says Ferreira, in addition to growing anxiety, decreased motivation, and high-stress levels in the internal team.
The Impact: Stability, Visibility, and Lower Stock-Out Rates
The Visagio team identified the problem: they needed to integrate their forecasting solution, which had already improved supply efficiency, with a BPA platform. The goal was to achieve a standardized workflow covering the sending of spreadsheets to shop managers and their feedback to the distribution center.
They were looking for a stable, well-established solution in the market. As a partner of Pipefy, Visagio seized the opportunity to build integrated AI and business process automation solutions. In April 2023, a workflow in Pipefy was set up to optimize Casas Pedro’s supply operation.
Visagio integrated its AI solution with Pipefy via API. Since then, the spreadsheet with the AI replenishment suggestion has been generated, sent, and received by store managers and stockists within the Pipefy workflow. The integration increases visibility over all process stages to all involved parties and ensures that the communication history is fully recorded in the platform.
Positive results arrived before expected. The delays in receiving the spreadsheets were eliminated, and communication within Pipefy replaced the manual email exchanges involving managers and internal teams. With increased process control and visibility, Ivo believes the relationship with the managers also improved.
The processes are more stable, and we gained confidence that everything would run smoothly every day. The shops received their order suggestions as expected. We gained more control and visibility over the stages. When you have this degree of consistency, the relationship with the manager also gets better. The script instability is no longer a bottleneck."
Ivo Ferreira
CEO at Casas Pedro
Internally, Casas Pedro’s management also noticed a significant impact on employee satisfaction. Since Pipefy automated the process, over 12,000 work hours were saved by reducing the time spent on resolving issues like spreadsheet submissions and other manual activities.
"This improvement has boosted the team's motivation both in IT and business operations. Before, we had to solve the same problems repeatedly, working on weekends, early mornings, and late at night. When there's a problem, resolving it is always urgent, and that causes considerable stress. The workdays would start with a problem to be solved immediately, and the team had to immediately call for assistance to restart servers. We were exhausted, and it was affecting our motivation. Process stability now provides greater confidence and improves the work environment," states the Casas Pedro CEO.
Besides the qualitative benefits, there was a relevant reduction in the out-of-stock rate in the shops from 5%, and the average storage time lowered by 17%. Essentially, in retail, the out-of-stock rate refers to the proportion of unavailable products to the total number of products in the shop, whereas the average storage time is the duration a product remains in stock before the sale—the lower this rate, the healthier the business.
The out-of-stock rate has a huge impact on our revenue. It means a product a customer wants to buy is unavailable in the shop. Especially when it's an immediate purchase, people don't wait until next month to buy food—they go to a competitor’s shop and buy what they were looking for. Any improvement in this rate brings a clear increase in revenue and business efficiency."
Ivo Ferreira
CEO at Casas Pedro
