Actona case study

Disruption hits supply chains in unpredictable ways. A challenge that businesses across the furniture industry knows all too well. Following a boom in demand for furniture & homeware products during the pandemic, the tables have now turned. Normalising customer demand coupled with record-high inventory levels has left many businesses in the industry feeling the pressure. But how did one of the leading names in furniture mitigate the impact of the post-covid bullwhip effect to gain a competitive advantage?

Challenge

For more than 40 years, Actona has been the supplier of choice for retailers around world. From its state-of-the-art facilities in Denmark, Actona offers an extensive range of modern, fit-for-purpose and sustainable furniture products. With the opening of a new warehouse in Poland, the furniture specialist is committed to creating a supply chain it’s customers can depend on.

Dorte Bakgaard, Senior Vice President of Operations at Actona Group explains: “We are constantly innovating our operation to provide our customers with greater value. From developing more sustainable manufacturing practices to opening our new warehouse facility in Poland to better service the needs of our customers in Northern Europe, supply chain excellence is top of our agenda.”

However, to respond to the evolving dynamics of the market as well overcome internal warehouse capacity constraints, Dorte and her team needed to take steps to improve flexibility and visibility throughout the supply chain.

Results

• 60% inventory reduction
• Optimised utilisation of warehouse space
• Sustained service level improvement

Why Slimstock?

As a long-standing partner, Actona and Slimstock have worked together for nearly a decade. Dorte explains how the relationship has gone from strength to strength: “Since implementing Slimstock’s optimisation platform, Slim4, we have built a close relationship with Slimstock’s team of supply chain experts. And during the pandemic, Slimstock played a particularly key role in helping us to overcome the disruption.”

Focused on upskilling the planning team, improving supply chain visibility, and improving utilisation of its limited warehouse capacity, Actona once again joined forces with Slimstock as it embarked upon a major supply chain optimisation project.

The Senior Vice President of Operations goes on to add: “Slim4 was already an established tool within our planning process. However, following a successful upgrade to the latest web-based version of Slim4, we realised how much untapped potential was left on the table. For this reason, we were eager to work with Slimstock’s team to unlock further performance improvements throughout our operation.”

Solutions

Enhancing knowledge

As the first step of the optimisation project, Actona’s team completed a comprehensive training programme. Led by Slimstock’s consultants, this programme was designed to provide the team with the knowledge to make supply chain decisions with confidence.

“For us it was vital that our people understand what levers they need to pull to deliver the best outcomes. As a result of the training, our team can now explore root cause optimisations to drive efficiencies throughout our supply chain. By allowing our planning team to make critical decisions with confidence, we have been able to attain a 60% reduction in stock while still improving service levels,” states Dorte.

Enhanced forward visibility

Given the volatile nature of sales both during and after the pandemic, Slimstock helped Actona to fine-tune its forecasts to create better forward visibility.

By autonomously prioritising the periods with the most relevant demand, Actona was able to minimise ‘noise’ in its forecasts. Furthermore, through helping Actona’s team to establish a robust demand validation process, this ensures the business can generate the most reliable demand insights possible.

Dorte highlights how better visibility has helped the business to remain responsive: “With more confidence in the numbers, we can take more rational decisions on where we need to act. By creating visibility and allowing us to dynamically adjust orders based on the data available, Slim4 has provided the flexibility required to minimise the impact of the bullwhip effect. Ultimately, from a financial perspective, we are in a much better position to anticipate what’s on the horizon.”

Greater control

Even with the opening of the new warehouse facility in Poland, space was still at a premium for Actona. To optimise utilisation of the space available, the furniture specialist took advantage of the Power BI module within Slim4. Furthermore, to bring harmony to its inbound logistics operation, Actona also rolled out Slim4’s powerful multi-location functionality.

“To gain greater insight into how best to utilise the available warehouse space, Slimstock’s consultants helped us develop a warehouse capacity BI report within Slim4. This, in combination with Slim4’s multi-location functionality, has helped us to balance inventory throughout our network and improve our overall efficiency”

Dorte Bakgaard |  Senior Vice President Operations

“The results of our new initiatives in Slim4 quickly became very evident when we compared our position in the industry. We could suddenly observe that, compared to many of our competitors, we stood significantly stronger in terms of both inventory levels and delivery performance.”

Next steps

Pleased with the results so far, the planning team at Actona are now working with Slimstock to identify new opportunities for optimisation: “As we look towards the future, we are convinced there is further scope to improve our knowledge & processes. In additional to creating new reports in PowerBI, we are also exploring how we can utilise Slim4 scenario planning capabilities to further improve decision-making.”

“Where many companies in the industry have struggled in a post-Covid-19 world, Slim4 has helped us navigate an unpredictable market. The outcome has not only been better results throughout our organisation but has contributed to helping us become a preferred supplier for both retailers and online retailers across Europe.”