Over the last 12 months, the supply chain department at packaging wholesaler, Moonen Packaging, has recently completed one of Slimstock's inventory management training programs with the Slimstock Academy. Through undertaking a range of in-house inventory management training programs as well as playing the supply chain game, awareness and knowledge of inventory management have greatly improved throughout the entire organisation.
Taking full advantage of Slim4
Moonen has been using Slim4 to manage their inventory for more than 10 years. Over this time, the number of backorders have been almost entirely eliminated while the stock turn increased by 20%. However, when Van Bussel joined the company in 2016, he could see that there was the potential to get far more from Slim4. There was only one person in the organisation who knew the system really well but they only used it at an operational level. Van Bussel goes on to explain: “It was a real shame; we had a really advanced system, but no one knew how to really utilise it.”
Extensive inventory management training programs
Van Bussel turned to the Slimstock Academy to help develop a program that could improve the level of knowledge of Moonen Packaging’s entire supply chain team. In addition to the operational training around inventory management and Slim4, this program consisted of five-days of in-house training that focused on addressing the business’ tactical and strategic inventory issues. Furthermore, through playing the supply chain game, the whole team were able to improve their awareness of the dynamic nature of inventory within a supply chain as well as the crucial role of communication.
Tactical inventory decisions
The training program has now been completed and, already, it has provided us many new insights, says Van Bussel: "We have decided to create a new planning layer for making tactical inventory decisions based on ABC analysis. We have worked with these general guidelines for a number of months to determine which articles we wanted to stock.
In order to further improve our position, our planners have reviewed C-products, which sell relatively slowly and take up a lot of time to manage, in order to re-negotiate smaller minimum order quantities. Throughout the training, we could see that our planners should spend more time focusing on A-products. However, from a tactical perspective, we must also work on creating the right business conditions.
Now that the knowledge programme has been completed, Moonen Packaging will implement the latest version of Slim4. This was a carefully considered decision, says Van Bussel, to ensure that the new insights gained from the training can be translated directly into the new system. "We now have the knowledge in order to take full advantage of Slim4." The company has set itself new supply chain goals. The investment in inventory must fall from 7 to 6.5 million euros. Furthermore, the availability of A-items must increase to 98%.
One of the world’s leading ferry operators Stena Line has decided to implement Slimstock's inventory optimisation solution, Slim4, to optimise the inventory of its central DC in Malmö. Onboard stores, restaurants and bars for more than 40 vessels are replenished from this DC and four regional DC's.
Stena Line provides ferry transportation services on its extensive route network of twenty routes covering North Europe and connecting ten countries. Last year, approximately 7.3 million passengers, 1.6 million cars and 2 million freight units were taken across the waters around Scandinavia, on the Baltic Sea, the North Sea and the Irish Sea.
The replenishment of the vessels is taken care of by Stena Line Onboard Services. This subsidiary and unit within Stena Line is responsible for the replenishment of the onboard shops, restaurants, cafés and bars. They are located in Malmö, with a purchasing team and a central warehouse. There are smaller DCs in Holyhead in Wales, Hoek van Holland in the Netherlands, Gdynia in Poland and Gothenburg in Sweden.
Stena Line decided to implement Slim4 to reduce inventory, improve efficiency and maintain the high service levels towards the vessels. The implementation will start in September and is planned to be finished before the end of the year. During the project an interface will be made between Slim4 and the ERP system Oracle JD Edwards.
Since 1983, Drive Products has supplied truck mounted equipment for commercial vehicles from operations across Canada. By replacing their existing planning tools with Slimstock’s software, Slim4, they immediately realized inventory could be further reduced by $6Million, and the end is not in sight.
Drive Products is the country’s leading integrator for commercial vehicles. Next to sourcing truck mounted equipment, the company specializes in installation and repair services. The inventory contains 412,600 SKUs, which includes anything from snow plows to bulk transport, towing & recovery solutions, to garbage truck equipment. Mike King, corporate manager supply chain operations explains; “If it can be attached to a truck, Drive Products most likely sells it.”
Slimstock supplants the competition
Due to several acquisitions, the assortment of inventory at Drive Products grew fast and relying on support for their outdated software was turning inventory management into a complex task. To get rid of excess inventory and re-balance it across their distribution network, Drive Products decided to integrate Slimstock’s, Slim4 to their Great Plains ERP and replace their outdated planning solution. “Our previous solution was rather cumbersome to use,” says King. “We considered upgrading with the same vendor, but experience with their support had not been positive. Replacing it with Slimstock’s software was a good choice for us. It far exceeds the speed, accuracy, and performance of our previous solution. The support from Slimstock has been outstanding in comparison too.” The implementation completed well under budget and Slim4 immediately highlighted $2Million in excess purchase recommendations from the previous planning solution.
A clearer insight into irregular demand
Canada’s weather has a tremendous influence on Drive Products sales. Slim4 automatically recognizes seasonality, and based on predictions; we can assure sales that the right products will be available when needed. “Due to a more stable forecast, we have fewer short shipments from suppliers,” says King. He adds, “Slim4 isolates exceptions quickly and alerts us to trends. I now have much clearer insight into irregular demand too. Slim4 provides greater visibility than I ever had before.”
Inventory reduced by more than $ 6M
Previously, A-items made up a large portion of Drive Products’ stock, but only turned 4.8 times a year. With help from Slim4, the inventory value has been reduced by almost $ 6Million and the stock turn has doubled on many items. “Reducing inventory is about as easy as pulling a few levers now,” says King. He adds; “We’ve further centralized our planning process, which has drastically improved efficiency. Previously it took us three days to determine purchase requirements for just one location. Now it takes one day to buy for the entire company, and I can manage it all from one location”, explains King. “I now have more control over stock. We can see where we’re over, rebalance inventory for the start of a season, and stop out of season purchases before they affect our balance sheet.” King foresees a bright future. “I don’t have a lot of spare minutes in my day,” Says King; “but Slim4 is quick. It’s an efficient solution that has positively influenced the performance of our business.”
Upgrading an ERP system requires a huge amount of time and effort from everyone across the organisation. Thus, it may seem like a strange time to be thinking about bolting-on additional solutions.
However, when you consider that implementing a new ERP could take over 18 months to complete, a period which is likely to be full of trials and tribulations, having a tool in place that enables you to stay in complete control of your inventory during the transition will bring harmony to the ERP project. The question is, should you implement our inventory management solution, Slim4, before or after a new ERP is live?
There are solid arguments for implementing Slim4 before and after a new ERP system has been introduced. Ultimately, this decision will depend on your specific business circumstances. Download our infographic guide and explore which option is right for your business today.
Complete the form below to download our guide to implementing Slim4 before or after your new ERP system.
The Turkish branch of the Carrefour supermarket chain, Carrefour S.A., has recently implemented Slimstock's inventory management solution, Slim4, to optimise inventory across all of their stores. With 6 DCs and 630 stores located across Turkey, Slim4 optimises both the inventory at the central distribution centres as well the replenishment of the stores.
From major hyper market stores with over 50,000 SKUs to smaller supermarkets, convenience stores and speciality shops, Carrefour S.A. offers a range of formats in Turkey. However, with 12 million SKUs in total, planners must ensure that products are distributed from the DC’s to the stores effectively. With the support of Slim4, Carrefour can now calculate the optimal order point for each product and location.
Extensive selection procedure
The team at Carrefour were searching for a solution to optimise their inventory and drive the replenishment process. However, it was important that the tool was compatible with the retailers existing SAP ERP system. Following an extensive selection procedure, Carrefour S.A. decided to go ahead with Slimstock’s inventory management software, Slim4.
First results visible
With the support of both the team at Slimstock and Selco, the local partner of Slimstock in Turkey, Slim4 was successfully implemented earlier this year. As highlighted by Önder Kaplancik, IT director at Carrefour S.A., the results are already visible with increased in-store availability: "We are very pleased with the way the project has taken place so far.” Önder continues: “Carrefour S.A. is open to referrals from other retailers and hopes that Slimstock can expand its presence in Turkey."
Slimstock: internationally active in retail
Slimstock specialises in helping supermarket chains and other retailers around the world optimise their inventory. Slim4 is designed to optimise both stock in the central distribution centre and inventory in stores. Internationally, there are references in France, England, Spain, Scandinavia, the Baltic States, Panama and Singapore, amongst others.
AUTONET Group is one of the most prominent suppliers within the auto repair segment in the Central and Eastern European region. Founded in 1996, the company now supplies customers in 3 countries (Romania, Hungary and Slovenia). With over 160,000 articles delivered from stock across a network of 5 distribution centers and over 70 shops, customer satisfaction is the main objective for the team.
For more than 20 years, AUTONET has established itself as the largest supplier of auto parts in Romania. With a customer focused team of over 1500 professionals, the business strives to offer greater value amidst the ever-increasing market pressure that comes as a result of expanding assortments and competitive pricing. Currently, AUTONET is using Slim4 across all their locations. In total, the business offer over 1,000,000 unique articles, of which, more than 160,000 are delivered from stock.
In addition to AUTONET’s extensive supply network, which extends across 3 countries, according to Zoltan Bartha, there is another great challenge when it comes to inventory optimisation: “Our product portfolio and network are continuously growing. Since the start of the Slim4 project, we have increased new product-location combinations by 50%. Our team was already doing a great job but with such growth, their tasks would have been much harder. As a result, we needed to adopt a more agile working methodology with a different inventory strategy for every single article in every single location, all in one system and all with the same team”.
After an extensive comparative analysis, AUTONET chose Slimstock’s inventory management solution, Slim4. The return on investment was obtained within the first year and more importantly it paves the way for the long-term development plans.
Slim4 has brought a lot of benefits to AUTONET, including the reports and visibility required to maintain control, as well as the management by exception approach which has delivered efficiency, focus and greater productivity. Compared with our previous system and in tandem with AX ERP, Slim4 is adding more value to the planning and purchasing department by dynamically managing most of the business rules and giving the users a comprehensive overview of the past demand and future forecast.
The system is also highlighting SKUs of interest and potential problems such as future risk of out of stock while the user still retains the flexibility to integrate their own way of working and preferences.
Long term partnership
Given that Slimstock, a Dutch-owned company, did not have many local customers, nor did it have an office or a local team at the time, choosing Slim4 was a risk. However, according to Zoltan Bartha, it was one of the most rewarding decisions the business made: “the personal and continued support has been great.”
With help from Slimstock consultants, all the required specific business rules have been successfully translated into Slim4. This has resulted in a robust yet dynamic daily system. Zoltan goes on to add: “The dedicated consultants at Slimstock were experienced with our industry profile and challenges and were able to propose and deliver the solutions we needed. We have complete confidence that Slimstock will be able to meet our requirements for the long term.”
"I need a 100% service level" – a typical expectation of both management and commercial departments. Purchasing & operational divisions however, have a much better understanding of service levels and appreciate that attaining 100% is a utopia. In practice, determining an appropriate service level is an extremely complicated undertaking.
Service level optimisation
For many businesses, the criteria for setting service levels is unclear and as a consequence, service level targets are set as a given figure (based on a quick and vague analysis). Furthermore, the quality of the service level is difficult to measure as the effects only emerge after a certain period of time. It is only when an inappropriate service level has a negative impact on safety stock for example, that the service levels are reviewed and quickly adjusted (without any real analysis). Thus, service levels are not reviewed regularly. Should this worry you? Only if you think that service levels are a powerful instrument that have the potential to impact both your profit margins and overall business performance.
Do service levels really have such a powerful influence on your margin? And can a well-thought out service level provide your organisation with a valuable asset?
When describing a service level in its purest form, you are describing your company's goal. It is a translation of your business strategy to your inventory strategy: you are deciding to what extent you want to satisfy your customer's needs based on your stock capacity.
The service level is an operational translation of the maximum profit you want to generate.
When defining a service level, a number of components have to be taken into consideration including turnover, capacity, customer demand and cost. These components and their relations can be defined on an article level. For example, knowing that the cost component has an exponential character, an appropriate service level on an article level can result in a large margin boost at an assortment level.
Finding an optimal service level thus results into a margin boost on an article level, which in turn leads to a large margin increase at an assortment level. In addition to this, the insight into your assortment's margin performance can also lead to further opportunities to increase margins over time.
Insight into internal processes
The advantage of a well-adjusted service level goes beyond margin increases as a thorough analysis also provides greater insight into your internal processes. By internal processes, we mean the processes that should mitigate both the supply chain factors and the demand chain factors.
A service level reflects your ability to meet demand and the capacity you are willing to use to satisfy this demand. If it is based on the right criteria, it should fit with your company's strategy and the capacity of its processes. If your capacity is not based on the right criteria, it may not have the desired effects. This occurs because certain supply and demand influences are not taken into account and as a consequence, this can cause a margin decrease. In that case, simply increasing or decreasing your service level can make the issue even worse.
Your service level should be a reflection of your internal processes and the maximum profit they could possibly generate. From the service level and its effects, we can derive:
- To what extent the internal processes can handle the service level
- What this process input means for every individual article
You should ask yourself which element you want to change; the inventory process or the service level. Either way, one should be adapted around the other. However, there is a risk that you adapt the wrong one, which can lead to a decrease in quality of both elements. This in turn can have severe consequences!
In conclusion, the right determination of your service level can have a considerable effect on your margin, but it can also give your insight into the extent to which your internal processes and their capacity can be improved and aligned to your organisational goals.
How to get started?
The determination of a quantitative fact, based on quantitative data only, requires a formula. The correct determination of a quantitative fact, based on more than quantitative data alone, requires a perspective. The correct perspective.
With regards to the perspective of a service level, we mainly mean the way the cost and turnover components are approached. We should look at the relevant process input for each article. Superficial quantitative criteria like turnover (ABC analysis) and the cost of safety stock should also be taken into consideration. However, we have to accept that there are also other, less quantifiable criteria in play. For instance; think of the actions your customers will take in the event of stock outs, is the expected turnover guaranteed?
The quantification of the appropriate service level is a company-dependent exercise, in which we should be able to determine the process input per article. Quantifying these criteria is not an easy thing to do. However, it is possible!
Would you like to have a more elaborate guide about how to determine the right service level for your organisation? In the near future we will publish a whitepaper including an extensive exercise helping you to determine your service level in a more pragmatic way.
Extreme volatility in demand, spiralling product ranges and increasingly lengthy lead times were all hot topics at this year’s Automechanika Birmingham event. However, in today’s uncertain business environment, maintaining the consistently high levels of availability that consumers demand, was undoubtedly seen as one of the most pressing challenges businesses across the automotive industry face.
The automotive industry is cut-throat at the best of times. However, according to the Guardian, automotive businesses are now at a tipping point. With an evolving political climate as a result of Brexit, rapid advancement of new technologies and a huge shift in car ownership, how can businesses attain the level of supply chain flexibility required to overcome the speed bumps that lie ahead?
Richard Evans, Managing Director at Slimstock UK, explains: “To keep up with ever-evolving customer demand and stay ahead of the competition, it is vital that businesses take steps to improve the efficiency of their supply chain operations now.”
Through the strategic re-alignment of their supply chain, automotive businesses can maximise availability, increase margins and mitigate risk: all whilst injecting invaluable working capital back into the business. Ultimately, through putting in place the right tools, technologies and knowledge, businesses can help their organisation action operational excellence.
With customers including some of the UK’s leading automotive brands such as FPS, Yuasa and Alexander Dennis, Slimstock has helped countless businesses to provide their customers with an industry-leading service level. “Given the speed at which the automotive industry is moving forward, now is the time business leaders must drive performance improvements across their supply chain,” concludes Richard Evans.
Register for our free inventory health check today and discover how you could reduce inventory levels, increase service levels and ultimately, improve customer satisfaction!
The Times revealed that demand for toys is booming. However, it seems children are not the only ones getting in on the action: the so-called “kidult” sector, adults that buy children’s toys for their own personal use, is set to grow at three times the pace of the rest of the market!
Given the growing number of grown-up gamers, this sector could offer some hugely lucrative opportunities to profit. However, out of embarrassment, it seems a large proportion of these customers are making their purchases via anonymous online channels. Thus, without any clear visibility over who these grown-up gamers are, how can businesses align their operations to the needs of a market they don’t fully understand?
In order to identify what caused this shift in demand (and thus determine what actions should be taken to exploit this increasing demand fully), simply looking at historical demand data alone is not enough. Supply chain teams must look beyond their data and collaborate internally. Given that marketing, sales and other teams within the business may have insight into how the market is evolving, operations could use such information to enhance their forecasts and better position themselves to meet this growing demand.
Whether positive or negatively impacting demand, virtually every sector will see new trends emerge over time. However, what steps should businesses put in place to ensure that they are able to keep up evolving demand patterns?
Slimstock ask Patrik Ohm, Purchasing & Inventory Management at Andreas Paulsen GmbH, five questions: What's his role? What does he do on a normal day and what impact has Slim4 had on the business? What's his biggest challenge at the moment? And what are his ambitions for the future?
What is your role within the company?
My role as inventory manager was created alongside the implementation of Slim4. I am one of six planners within the Paulsen group and every planner is responsible for managing certain suppliers. However, I am also responsible for coordinating the integration of Slim4 and I am the main internal contact person for all topics around both Slim4 and optimisation processes.
What does a typical day look like?
I use Slim4 to ensure the availability of goods from my suppliers and to schedule individual customer orders. Furthermore, managing any changes which impact the stock also comes under my remit.
What's the impact of Slim4 on your day-to-day job?
With Slim4, daily scheduling only takes up to about an hour a day of my time. In addition to this, I spend around four hours a day checking certain article groups and stock exceptions as well as supporting the rest of the team.
What impact has Slim4 had on a day to day basis? What would you do if you didn’t have Slim4?
The biggest and most impressive change we have seen since implemented Slim4 is the shift from paper forms to paperless planning. This has given us a significant time advantage! Scheduling has become much clearer and far more transparent. Through a combination of the parameters we established within Slim4 as well as through utilising standardised purchase orders, our inventory goals have become far more achievable.
What's the main inventory related or operational challenge/goal in your work?
The biggest challenge is to ensure a maximum level of service with the lowest possible inventory! There is always room for further improvement. The next goal for me is to dig more deeply into Slim4 in order to harness as many analysis and improvement opportunities as possible. Due to the variety of suppliers, there are still many ways to adapt Slim4 for our individual requirements and simplify purchasing processes even further.
What are your ambitions for the future?
The field of inventory management is incredibly wide and Slim4 represents only a small area for me. Given that we now have 54 locations, as we continue to grow we’ll always be facing new challenges and processes in the future.