Frits Dijk transforms supply chain with Slim4 platform
Truck and trailer supplier, Frits Dijk, has upgraded its approach to supply chain planning with Slimstock’s Slim4 platform. This has led to a massive improvement in service levels and a stock reduction of 15%. Yet these are not the biggest benefits of the improvement project. By sharing planning data with suppliers as well as customers, the company has also strengthened its supply chain position.
“This provides a perfect starting point for future growth,” says CEO, Louis Dijk.
As an exclusive importer of lighting and electronic components, the family-owned company plays an important role within the supply chain of truck and trailer manufacturers.
“These are mostly medium-sized companies that are too small to buy directly from the big component manufacturers,” says managing director, Louis Dijk, son of founder, Frits Dijk. “Moreover, our customers often want their materials delivered faster than those that the big multinationals can offer. We relieve them of this dilemma by keeping the right parts in stock and delivering them quickly. Our strength is that we are completely geared to the ordering behaviour of this specific group of companies.”
By upgrading its inventory management system to Slim4, the company has managed to take its pivotal role within the supply chain to an even higher level, says Louis Dijk. He adds: “The people at Slimstock showed me that the latest version of Slim4 would enable us to use it more widely than we were currently able to do. They suggested a reset, which consisted of redesigning the inventory management process and upgrading to the latest version of the software.”
Less safety stock
As a start to the project, Slimstock’s consultants mapped out the improvement potential. They demonstrated how significantly Frits Dijk could not only boost its own stock performance, but that suppliers and customers could also benefit from Slim4.
Louis Dijk explains: “You can create specific forecasts for your suppliers in Slim4. By actively sharing these with our component builders, they can know in advance what demand they can expect from us. They can then use this information to plan their production processes more efficiently. This in turn has the advantage that their deliveries to us are more reliable, and we need to hold less safety stock. This reduces costs for both parties.”
Sharing supply chain data has strengthened the bond between Frits Dijk and its suppliers. As a result, the company gets deliveries earlier in times of scarcity.
Louis Dijk notes, “We saw this clearly when there were shortages of electronics components some time ago. Suppliers did not know what to do with the flood of back orders that formed. We helped them by issuing forecasts and prioritising our orders. This also ensured that there were hardly any swing effects in our supply chain.”
Service level has gone from 85% to 97%
Once the latest version of Slim4 was installed and all the parameters set, Frits Dijk’s staff became increasingly confident in the system. Buyers saw that the system came up with order recommendations that they hardly needed to change.
“Because of those optimal orders, combined with higher reliability from suppliers, our service level went up like a rocket. From 85% to 97%!” Louis Dijk enthuses. “We got a grip on our inventory and can now start reducing it without affecting the customer. At least 15% of our stock consists of safety stock, which we will soon no longer need. If you consider that we have four million euros’ worth of stock, you can calculate what that will mean for us.”
The new Slim4 environment has also increased internal efficiency. Purchasers spend less time looking at stock levels and deciding what to reorder.
“Previously three people were busy with this, now only one,” says Louis Dijk. “That person now has time to spare, which he can spend, for example, on consultation with suppliers to come up with process improvements together, or to make stock analyses and see which articles are in danger of becoming obsolete.”
Unburdening customers even more
During the project, another supply chain application of Slim4 came to light that is providing Frits Dijk with even greater benefits, namely ‘thinking along’ with truck and trailer builders in their procurement planning.
“By sharing our sales forecasts with our customers, we are able to help them identify their own equipment needs. This may sound strange, but the average trailer builder is simply less mature in terms of supply chain organisation than companies like DAF or Scania. They do not look as far ahead and often do not order their parts until the last minute. If we don’t have those parts in stock, they have a problem, because then they can’t produce. So that was always quite a risk for them.”
Since Frits Dijk has begun sharing forecasts with its customers, something has changed substantially in its relationships, the CEO has noticed.
“We are now seen much more as a partner than as a supplier that not only delivers high-quality items, but also supports them in their stock management. For instance, we now make long-term plans for our customers that include agreements on availability of critical and customer-specific items. By mapping out for them what their needs will be and how we will meet them, we all understand each other better. Then we can make better agreements, for instance, on purchasing obligations.”
Starting point for revenue growth
The new form of supply chain cooperation will ultimately also have a positive effect on sales, observes Louis Dijk.
“When customers notice how nice it is that they no longer have to worry about their input materials, they soon think: ‘why can’t we do the same with other items?’ I am regularly asked if we can’t also supply certain components that they currently buy elsewhere. This offers great opportunities for us to further expand our market share and continue to grow as a company, even in times when the market as a whole is stagnating.”
And so, by recalibrating its Slim4 system, Frits Dijk has not only boosted its own stock operation, but also its competitive position within the supply chain.
“In hindsight, I am extremely happy that I let Slimstock convince me. This project gives us a perfect starting point for future growth,” says Louis Dijk.