HG International boost service amidst international growth

“Inventory management is a real skill,” says Theo Vos, Director of Operations at HG International. Through working in cooperation with the inventory specialists at Slimstock, the manufacturer has used Slim4 to store its knowledge in order to take a more dynamic approach to inventory management.

The implementation of the inventory optimisation software, Slim4, has resulted in an inventory reduction of 10 percent. In addition to this, availability has also improved considerably and HG International now achieves service levels in excess of 99 percent.

HG International develops, manufactures and distributes a range of cleaning and maintenance products. Since the 1980s, the company has strived to not only focus on the industry, but also on the end consumer. With over 200 formulations, HG offers something for every type of cleaning and maintenance problem in and around the house. As a result of HG’s customer focus and extensive product range, the manufacturer boasts an annual growth rate of between 8 and 10%. With its headquarters in the Netherlands, HG’s products are now
sold in over 45 countries around the world.

Seasonal demand forecasting

“Because our products are labelled and packaged for each individual country, the actual assortment is much larger than the 200 base formulations. In total, we manage around 3,000 SKUs,” explains Vos. “As a consequence of this growing range, managing the inventory was becoming an increasingly complicated undertaking. With the additional challenge of managing seasonal peaks, this issue was only further exacerbated”. The manufacturer now has a tool which guarantees optimal inventory control, and, as a result, production orders and planning are more effectively managed. “Slim4 is especially beneficial for managing customer demand fluctuations as a consequence of item seasonality,” adds Vos.

Knowledge sharing to achieve the best results

To get the most out of Slim4, it is important that all processes are fully understood. “Slim4 can do a lot, but it cannot perform magic. Without the correct data and knowledge, no system can achieve optimal results. Our main goal when implementing Slim4 was to secure our existing knowledge. The experts from Slimstock have helped us in translating this knowledge in order to develop more efficient inventory management processes”.

With a service level of 96%, HG already had a high level of control over the inventory. “With Slim4, we were able to further improve our service level,” says Vos. While inventory levels have been reduced by 10%, availability has increased considerably. The service levels now exceed 99%. “As we expand into new international markets, our turnover grows rapidly. However, despite this growth, our inventory levels are now much lower than when we first implemented Slim4,” states Vos.

Management by exception

As a result of Slim4’s dynamic nature, the software solution has the capacity to adjust the forecast as demand fluctuates. Safety stocks are re-evaluated based on the historic demand on a monthly basis. “Our ERP system, Microsoft Dynamics AX, is not able to do this,” adds Vos. “In the past we lost a lot of time doing repetitive tasks. However, with Slim4, we can spend 100 percent of our time focusing on the 10 percent of items with exceptions. As a result, our inventory managers now enjoy their jobs a lot more”. He estimates that 25 to 50 percent of their time is saved.