- Inefficient forecasting due to demand fluctuation
- Needed a flexible and adjustable solution
- Clear overview needed
- Stock levels were too high
Managing order exceptions in retail
Johan Rönning is a leading supplier of electrical products in Iceland and also sell white goods and consumer products. They run 9 stores around Iceland and have averaged over 100 employees in recent years.
- 35% lower inventory levels
- Exceptions managed efficiently
- Improved service levels
- Workload and employee reduction in the purchasing process
- Increased management overview
“One of the first tasks after I completed the buyout of Johan Rönning was to ensure optimal inventory planning by investing in AGR ́s solution. That decision was based on prior experience with the system at two other companies I have managed.”
Bogi Sigurodsson, owner and board chairman of Johan Rönning
Johan Rönning has for decades been the leading supplier of electrical products in Iceland for the professional market. The company has in recent years developed further and is now also a significant player in supplying quality products and solutions to other sectors of the industrial and contracting area. The company markets its offerings to the BtoB market under the brand names of Sindri and Hebron; as well as Johan Rönning. The company also holds a significant market share in the middle and high end range in white goods consumer products. The company runs 9 outlets around Iceland and the number of employees has exceeded 100 in the last years.
Rönning had identified the need to forecast future demand more accurately and systematically in order to lower inventory levels and reduce stock-outs. They were seeing great demand fluctuations in their operation and needed to address this throughout their product line. “We neededaflexiblesolutionthatcouldeasilybeadjustedtoourspecificneeds.” SaysGísli Jónsson, purchasing manager at Johan Rönning. They also wanted a better overview of inventory levels on store level as well as improving the purchasing process.
Managers at Johan Rönning had previous experience with the AGR solution at other companies, as Bogi Sigurodsson explains. They therefore knew the results that could be expected from the system. The Manage by Exceptions or MBE module was installed and adjusted to recognize situations needing special attention. MBE is designed to deal with situations that do not fit predefined patterns. Reports can easily be defined to meet specific customer needs and can be generated at predefined intervals to draw attention to situations that need special attention. This increases efficiency and forecasting accuracy, producing impressive results by tuning stock levels to the desired service level.
“Since we implemented the system we have lowered our inventory levels by over 35%, this has freed up valuable working capital in our business. The main reason for this staggering reduction is the powerful MBE module.” says Gísli. Today, companies need to follow best practice solutions in order to keep a market advantage. AGR is currently helping organizations moving from inventory optimization theories towards practical initiatives that improve corporate financial performance, while maintaining customer satisfaction.