In 2010, Le Creuset turned to AGR to deliver an inventory optimization and demand planning solution to deliver integrated and consistent results that would reduce stock holding while continuing to provide very high levels of product availability.

Prior to selecting Inventory Optimizer, each subsidiary of Le Creuset was carrying out very limited inventory control and forecasting calculations using data from different ERP systems uploaded into spreadsheets or even manual, paper-based systems. Gavin Wheaton, is UK Logistics Manager for the Group and he explains, “We put together a global plan to improve the accuracy and efficiency of our inventory management across the entire business. The objective was to have visibility of all our systems so we could benefit from faster reporting and significantly improved stock holding, both in terms of lower volume and higher availability. We began in the UK after investing in Microsoft Dynamics NAV but identified a huge area for potential improvement in our inventory management and forecasting capabilities.”

Other countries had different ERP systems and while the longer-term plan is to have consistent systems across the group, the immediate requirement was to implement a best-of-breed inventory optimisation system that could lower costs through better inventory management and demand planning. “We looked at a number of inventory optimisation products, but AGR appeared to be exactly what we were looking for in terms of straightforward implementation, integration with a range of ERP systems, excellent functionality, ease of use and scalability. We felt this was a system that could be implemented quickly in the UK and then be rolled out across the group for maximum benefit,” he adds.

Project Roll-out

Implementation of AGR in the UK was straightforward and yielded fast benefits. As Wheaton explains, “Like many of our subsidiaries, in the UK we had too much stock in the warehouse, but were often out of stock on the products we actually needed. There was no visibility of stock in our other sites around the world, which could have helped us be more responsive and efficient. We were in real need of putting standard operational processes in place so that we could work in a more systematic way. AGR has done this very quickly, helping us to reduce inventory while simultaneously improving product availability and customer service.”

With the UK up and running successfully, Le Creuset moved swiftly to roll the system out into further countries and it is now live in the US and Germany and is being rolled out into Scandinavia. From the central head office, Le Creuset can also pull in data from other subsidiaries, such as Japan, Hong Kong and Australia, in order to provide further visibility of inventory and forecasting in these territories. “Reducing inventory across all our locations is what has driven the need for this system. Once we put a spotlight on inventory it became clear that the subsidiaries were not forecasting properly. Until now, forecasting has essentially been guesswork. AGR has given us increased visibility and it is making a big difference. We can now see that there may be stock sitting in one country’s warehouse that we could move to another country, rather than manufacturing more unnecessary products,” says Wheaton.

Benefits of AGR Inventory Optimisation

“The implementation of AGR is a key part of our overall drive to improve operational processes throughout the business,” says Wheaton, adding, “The system gives us an accurate picture of our stock holding, which allows us to bring other key processes into place. For example, we will use AGR to forecast demand from factories so that we can purchase raw materials at advantageous prices to meet these forecasts.”

He continues, “Forecasting is working much better, which is helped by the consistency of format as well as the consistency and accuracy of data. We can pull in spreadsheets from many different departments, such as sales, marketing and purchasing and standardise this information across the whole organisation. This means we can plan key activities, such as marketing campaigns and promotions, with an accurate focus on what is best for the business.”

The US, which accounts for 40% of total group revenues, is particularly pleased with the AGR implementation. “The US have hit the product head on, and they are now running with it at a very high level. They are producing a range of reports, sourcing data from a several different systems, which has given them a very rapid improvement in forecasting and inventory holding.”

Support

With such a key global implementation, Le Creuset has appreciated the professional, knowledgeable and rapid support of AGR. “AGR’s support has been exemplary,” says Wheaton. “They have been very responsive to all our needs and the needs of each of our markets. We never wanted to dictate everything the local offices wanted, but we needed some consistency and the AGR team has allowed us to do this by being flexible and encouraging.”

In conclusion, Gavin Wheaton is looking towards the completion of the global roll-out, “So far, we have six of 22 subsidiaries on AGR, but many more can integrate their inventory data with a central system. We have been very impressed by the simplicity of implementation, despite the fact that it is clearly a very powerful piece of software. Similarly, the rapid effect the system has on forecasting accuracy and stock levels is helping us to lower costs, improve customer satisfaction and generally increase the profitability of the whole business. With AGR, we are enjoying a happy combination of low investment and high return.”