AJ Produkter redesign their approach to inventory management

Founded from the director’s parent’s basement in 1975, AJ Produkter has grown significantly over the last 40 years to become a global brand in the furniture industry. Today, their extensive operations, encompasses a state-of-the-art showroom, 2 factories located Eastern Europe and 13 subsidiaries. To maintain the exceptional standards of customer service, the designer and manufacturer of industrial, office, industrial and school products turned to Slimstock to help increase the efficiency of their forecasting and demand planning process.

“This year alone, inventory levels have been reduced by over 20%.” Jenny Tinusson, supply chain manager at AJ Produkter.

The team at AJ Produkter have one focus: to help their customers create a better workplace. With a product range including everything from canteen furniture to storage solutions, the furniture specialist has built a reputation for offering the best quality products, at the best price. However, given the diversity and complexity of the assortment, anticipating demand was quickly becoming an unmanageable task for the planning team. Consequently, the business needed a solution that could provide their people with the insight required to make optimal inventory decisions.

In the past, the team relied on their ERP system to forecast the demand. However, given that many of the items within their assortment form part of a wider bill of materials, their ERP solution alone simply did not offer the flexibility required to account for the complexities of their operation.

“Put simply, we had no confidence in the numbers. As a result, the planning team had to invest a huge amount of time and effort to manually amend the forecasts. Even then, this often meant our forecasts were based on little more than historic demand and our own gut-feeling,” stated Jenny Tinusson, supply chain manager at AJ Produkter.

Thanks to Slim4, Jenny and her team have been able to automate forecasting across the vast majority of the product range. By taking into account factors such as seasonality and evolving product lifecycles as well as relationships with other products within the assortment, the demand forecasting process is now far more scientific.

Jenny goes on to add: “Now that we have a more robust forecasting process in place, we can be more responsive to trends and take action sooner. Furthermore, with the time-savings delivered by Slim4, we can invest more of our time into the areas that really require our attention.”

The combination of AJ Produkter’s two factories in Poland and Slovakia coupled with their strong relationships with suppliers based in the Far East enables the business to maintain full control over the process of going from an initial idea to design and production. However, in order to achieve the levels of availability customer expect while still keeping costs under tight control, Jenny and her team needed greater insight to optimise their ordering processes.

Through providing optimal order quantity suggestions based on inventory costs and the forecasted demand, Jenny’s team can make far more informed decisions when it comes to ordering. “In the past, our ordering process was based on a lot of guesswork. However, with Slim4, not only do we have visibility over the optimal order quantity we can now easily determine exactly what we need to order to maximise the value of every shipping container.

Through improving forecasting and order processes, AJ Produkter has already seen some impressive improvements. “Despite continuous growth, we have been able to increase stock turn by 60%. As a result, this year alone, inventory levels have been reduced by over 20%.”

The business is now pursuing further opportunities to further increase the efficiency of their operation: “We are now working towards enhancing both internal and external collaboration through sharing purchase forecasts across the business. With support from Slimstock, I have no doubt we will only build upon the success we have achieved so far.”