The Challenge
With approximately 50,000 active SKUs, 750 suppliers, and 500 employees, BYKO must balance product availability across multiple locations while maintaining the high service standards that have helped it earn the title of Iceland’s most customer-satisfied retailer for nine consecutive years.
Increasing supply chain complexity
BYKO has worked with AGR for nearly two decades, but as the business grew, its supply chain complexity increased dramatically. While the company had access to large volumes of inventory data, many replenishment decisions still relied on manual intervention and local decision-making
Siloed teams
With multiple teams influencing inventory decisions, from buyers and store managers to sales staff and distribution teams, conflicting actions sometimes led to overstock in one location and shortages in another. The result was unnecessary firefighting, reduced confidence in the process, and less time available for strategic work.
Manual replenishment
The company recognised that continuing to manage tens of thousands of inventory decisions manually was not sustainable. To support future growth, BYKO needed a more automated, scalable approach.
The result
Rather than using AGR simply as a planning tool, BYKO made a strategic decision to allow AGR to take a much larger role in managing replenishment and distribution.
- 80% of replenishment automated
AGR now manages approximately 80% of store replenishment and distribution activity. This allows BYKO’s teams to focus on exceptions, promotions, supplier collaboration, and strategic initiatives instead of routine ordering.
- More than 50% fewer stock-outs
By automating replenishment and improving inventory allocation across locations, BYKO has reduced stock-out rates by more than 50% while maintaining strong service levels.
- Lower inventory levels
The company has reduced overall inventory holdings while continuing to improve product availability, creating a more efficient and responsive supply chain.
- More time for strategic work
Buyers and category managers now spend less time managing daily replenishment activities and more time developing categories, strengthening supplier relationships, and supporting customers.
“We really made a decision that rather than having our people use it from day to day, that we would let AGR completely run the distribution.”
- BYKO
- Bragi Antoníusson, Head of Procurement, Supply Chain and Marketing
Moving to Automated Replenishment
The company shifted from warehouse-centric planning to a demand-driven approach, focusing first on what each store needs and then aggregating that demand through the supply chain. This gives BYKO a more accurate picture of future requirements and allows inventory to flow where it is needed most.
Today, AGR manages the majority of store replenishment automatically, helping ensure products are distributed consistently across locations while reducing the risk of both overstocking and stock-outs.
“We really made a decision that rather than having our people use it from day to day, that we would let AGR completely run the distribution.”
This shift has enabled BYKO’s teams to spend less time managing routine replenishment tasks and more time focusing on category development, supplier relationships, and long-term planning.
Building Trust in Data
One of the biggest challenges was not the technology itself. It was changing behaviours and building trust in the process.
BYKO found that as employees saw AGR consistently replenishing products when needed, confidence in the system increased. Store teams became less reliant on manual workarounds and more focused on ensuring inventory records were accurate.
This change improved data quality throughout the organisation. Rather than working around inaccurate inventory records, employees now correct discrepancies when they find them, allowing AGR to make better decisions and drive stronger outcomes.
“Implementing a software is the easy part. Actually having people trust it and start using it is the tricky one.”
Looking ahead
For BYKO, automation is not a destination but an ongoing journey. The company continues to refine its processes, improve forecasting accuracy, and expand automation across the supply chain.
By reducing the time spent on operational decisions, BYKO is creating more capacity to focus on customers, suppliers, and long-term growth opportunities.
As Bragi explains:
“I believe that we’re in a place now where we’re much quicker to adapt and that’s future ready to me.”
With AGR automating the majority of replenishment decisions, BYKO has built a more agile, efficient, and scalable supply chain that is ready for the future.