KAISER + KRAFT case study

As part of TAKKT AG, KAISER + KRAFT is Europe’s market leader in B2B mail-order business, warehouse and office equipment. The product portfolio includes around 115,000 items distributed via a network of six warehouse locations across Europe. Every year, an average of 10-20,000 items are added.

To manage such a vast number of items, KAISER + KRAFT worked with inventory optimization software before implementing Slim4. Despite the existing software, for Alexander Herzinger, Group Leader Logistics manager at KAISER + KRAFT, managing all of the items across multiple warehouse locations efficiently was becoming a growing challenge.

“One shortcoming of the old software was that we couldn’t quickly access the data we needed to make any data-based inventory decisions. The IT department had to extract all of the data to produce special reports. Consequently, this always led to time delays of a few days and ultimately had a major impact on the efficiency of our team,” explains Alexander Hezinger.

The group logistics manager continues: “Before Slim4, our inventory management processes were limited to ordering safety stocks with spreadsheets based on outdated data or using gut-feel alone.”

In addition, there were missing or inadequate functionalities of the software, such as seasonality detection. Seasonality could not be recognized automatically and therefore had to be calculated manually. This meant the business could not align inventory with demand during a specific sales window. Consequently, several months of inventory were held to prepare for the peak period. The software’s graphics also left a lot to be desired and the two-colour, one-dimensional display was becoming extremely dated.

KAISER + KRAFT planned to reorganise the existing warehouse structures. In addition, to help the business attain a higher inventory turnover rate and lower inventory level, the office equipment supplier set up a regional hub for fast-moving lines in the Czech Republic.

As a result, the ability to efficiently manage relocations between the individual warehouse locations and clearly map the multi-level allocation of the goods at any point in time, the business needed to achieve the highest level of transparency. This need for multi-warehousing functionality was ultimately the impetus for the purchase of completely new software.

In 2019, KAISER + KRAFT decided to connect new software to their ERP system as well implement additional functions and extensive analysis options.

With the new inventory software, the business could visualize reports and understand the influence of how changes to certain logistical criteria on the business processes impacted the wider business. This, in turn, allowed Alexander and his team to make well-founded and data-based inventory decisions.

“While we used to hold high levels of inventory to ensure the highest possible service level, it is now company policy to ensure the highest possible turnover rate, taking the service level into account,” explains Hezinger.

In order not to lose sight of these goals, KAISER + KRAFT created a catalogue of requirements and an evaluation matrix for the selection of new software.

The modern, extremely flexible and intuitive browser-based user interface of Slim4 convinced us very quickly in the selection process.” Alexander adds: “Every Slim4 user can configure his user interface individually in just a few minutes – without having to have any programming knowledge. Furthermore, with the web-based platform, we can now access Slim4 from all devices.” After looking at 5 other non-browser-based tools, Alexander did not want to forego this flexibility.

“KAISER + KRAFT had already given us June 30, 2020, as the deadline to go live in our first discussions. That means that on July 1st, 2020 Slim4 had to go live with three existing warehouses and a completely new warehouse in the Czech Republic,” explains Constantin Klingel, Sales Manager at Slimstock.

He goes on to highlight how this was an ambitious but feasible goal: “At the beginning of the project, it was not yet clear to us that we would have to do the entire project remotely.”

The implementation was only possible with a tight project plan and the necessary human resources. Alexander Hezinger admitted: “In the beginning, KAISER + KRAFT only had rudimentary project management for the implementation as the implementation of existing software was completed many years ago. It was therefore very helpful for us that Slimstock also actively supported the project management on KAISER + KRAFT’s side. Thanks to the precise project plan with the defined milestones, we were able to involve the necessary specialist departments in good time and thus structure internal work processes efficiently. Not every milestone was reached precisely – we sometimes exceeded the deadlines by a week but caught up with other milestones. Ultimately, however, the project was delivered on time.”

The fact that the schedule could be adhered to so well was also due to the fact that the introduction of new inventory optimization software for KAISER + KRAFT was a ‘hypercare’ project. This meant that sufficient human resources were planned for this. The master data was also well prepared so that errors could be rectified quickly. KAISER + KRAFT itself provided the interface for the connection to the Microsoft Dynamics AX ERP system. This was tested technically and functionally in close coordination with the Slimstock consultants so that a smooth flow of data could be made possible.

During the implementation period, which was divided into 5 stages, 2 Slimstock consultants worked intensively on the project. The meetings took place regularly online via Teams. Otherwise, the exchange went smoothly despite the Corona conditions.

“At Slimstock, I always experience incredibly committed consultants who always find a solution for us as customers in our language. Sometimes an error occurred, for example, we did not deliver a database or a database in Slim4 did not work. The question is how do you deal with problems and how are they resolved. I never have any stomach ache with the Slimstock Team. I don’t have to wait 2 weeks as the problem is often solved within one day.”

Even if KAISER + KRAFT initially focused on the optimal management of relocations, today Alexander Hezinger and his colleagues appreciate many other advantages of Slim4 – such as the ToDo function. As soon as you open Slim4, the ToDo view appears on the user interface.

At KAISER + KRAFT, the ToDo list is set in such a way that an overview of all items is displayed that absolutely must be ordered on that day. This is extremely helpful for the entire team, as the number of stockouts could be reduced in a simple way.

“In Slim4 you have unbelievable design options and you can really pull all the data you need or even set up rules yourself,” emphasizes Hezinger. “The added value in reporting also goes beyond inventory management. You can filter according to all criteria such as service level, overstock, turnover, breaking bulk, long-tail factor, warehouse-managed or non-warehouse-managed and pull up the corresponding graphical evaluations.”

Hezinger utilises Slim4’s ABC analysis tool to prioritise articles with high demand fluctuations. The ABC analysis can be structured according to various dimensions such as certain product groups or individual articles. The individual warehouse locations can also be assigned their own ABC classification. If you combine this with the service level, for example, Slim4 then automates the distribution of inventory based on the service level of the individual items.

“It’s very helpful to see how safety stocks change when you adjust the service level. Slim4 illustrates this in appealing graphics so that you can quickly grasp the effects,” explains Alexander Hezinger.

The distinction between stocked and non-stocked can also be controlled via the ABC / XYZ matrix. The evaluation matrix can then suggest which articles belong to the third-party business and should be ordered on an order-related basis. KAISER + KRAFT also regulates this using logistical criteria such as dimensions, weight, branded product and the procurement period for the item.

KAISER + KRAFT takes advantage of Slim4’s advanced simulation functionality to explore the effects of various influencing variables within a few minutes; something which was especially helpful in times of the Covid pandemic. Delays in the supply chains as well as raw material shortages and price increases have a major impact on the entire KAISER + KRAFT range. “With the help of Slim4, we can clearly see the effects on our inventory. For example, if the delivery is delayed from 12 to 20 weeks. Based on these simulations, we can then make inventory decisions at an early stage and also keep an eye on the monetary impact.”

Initially, KAISER + KRAFT mainly used the standards tools in Slim4. But since going live, the company has implemented some additional modules. As a result, the business can now make more informed product range decisions as well as calculate EOQ all within Slim4.

High efficiency

With just a quick look at the number of articles, it is clear to see how efficient the new software is. At the beginning of Slim4, 10,000 articles were looked after by 3 users. Within three quarters of a year, the number of articles rose by 60%. However, the planning is still managed by just 3 users.

“This efficient control is only possible thanks to Slim4,” emphasizes Hezinger. “All of our colleagues enjoyed working in Slim4 and of course they also see the added value for their work.” Hezinger To this end, he involved his team at an early stage in the selection of suitable software. “In the meantime, of course, all colleagues are working in Slim4, trying out new applications and always bringing new ideas to the weekly meetings,” continues Hezinger.

Based on the positive experience that Hezinger and his team have had with Slim4, the solution is now being rolled out as the leading inventory management tool in its sister companies and in all KAISER + KRAFT countries. Slim4 is now in use at 6 warehouse locations. In the future, Slim4 will also be used at KAISER + KRAFT’s own production site and will precisely calculate when raw materials must be available to be able to serve the end customer order on time.

After nine months of working with Slim4, Hezinger sums up: “We now plan based on the real numbers. Inventory management is no longer done with Excel lists.”

He currently spends 2-3 hours a week adjusting reports and helping new colleagues in the European branches to get familiar with Slim4. He really appreciates the fact that Slimstock is internationally positioned and has offices in almost every country in which KAISER + KRAFT is active.