Optimal replenishment, optimal inventory levels and freight cost savings are some of the benefits which Bygma Gruppen gets from introducing an intelligent purchasing system. The system has been tested in 8 stores and will be rolled out to all of Bygma's 60 stores in Denmark in the beginning of 2021.
Bygma Gruppen is the biggest Danish-owned supplier to the building industry. Since formed in 1952 Bygma Gruppen has gained a position as a strong supplier to the building industry with activities within sales and distribution of timber and building materials. Bygma Gruppen currently operates more than 100 business units in the Nordic region.
"The implementation is part of the digitalisation process that we have initiated in Bygma and which will characterise a large part of the activities in the coming strategy period, which will extend over the next 3-4 years," says Klaus Hadsbjerg, CEO of Bygma A/S.
A lot of purchasing benefits
“The intelligent inventory planning and order management system ensures optimal ordering frequency - so that there is not too much and not too little on the shelves - and it ensures a correct inventory level across the stores. It also takes into account products with seasonal fluctuations, so that we can have correct safety stock levels on these product groups as well” says Fredrik Stuhr Pedersen from Bygma's purchasing department.
“All of Bygma’s approx. 300 suppliers are being added to the system, which looks back 24 months and forecasts sales and calculates the inventory needed for each individual store 28 days ahead. AGR generates relevant order proposals and transfers the calculations to our ERP system (M3). On top it calculates the right quantities to order taking quantity discounts into consideration, a good time saver for replenishment staff. Store personnel do not have to do anything except from doing a sanity check and approving the order proposal”.
Adapted to the individual business
AGR Inventory system has run in a pilot project at Bygma Odense among others. Klaus Mertz Andersen, director, says “it is a super system where our fast runners are quickly identified. At the same time, the safety stock for fast runners has been automatically increased. It is also a great advantage that we no longer have to 'order based on feelings' but that the purchases match our current and future needs. However, it is important that we have the possibility to make manual adjustments, as the system does not know our store layout and cannot know much space we actually have. So sometimes we have to push an order to next week. But we have great confidence in the system, which will make our everyday life easier in the long run”.
The same is said by salesman Michael Stenmann Mortensen from Bygma Nyborg, which was the first store to run a pilot with the AGR system.
“We no longer have to go through all the items on a weekly basis to check minimum and maximum orders; it is managed automatically by the system. I am sure that over time it will free up time for us to focus on the customers”.