Case Granngården: Balancing stock between online and stores through virtual ring-fencing

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Introduction

Granngården is a nationwide retail chain in Sweden in the pets and gardening sector. The company has been an early adopter of supply chain management technology and had already achieved a high degree of automation in its replenishment at the time it approached RELEX. However, Granngården wanted to improve its forecasting and order proposals, extend automated replenishment to seasons and campaigns, and later on also ensure stock was available both through its stores and its ecommerce channels.

Background

Granngården planned to upgrade its existing ERP system to Dynamics AX and was simultaneously looking for a supply chain management system to integrate with it. Granngården’s previous inventory management system needed too much manual intervention and couldn’t help meet its development goals. Those required better forecasting and order proposals, time-saving optimized allocations, the ability to run simulations, and a higher level of automation especially for seasons and campaigns.

Granngården at a glance

  • Founded in 1880
  • Total turnover €182.1M
  • Employees 550
  • Consists of 110 stores, 250 distributors and 1 DC
  • The total assortment consists of 207 000 SKUs delivered directly to the stores and 591 000 SKUs centralized distributed via the DC

A system was needed that had a good visibility and an easier way of controlling the different channels and stock levels without contacting the supply chain vendor every time. Something RELEX could provide.

“We’re glad that RELEX kept on telling us that the go-live will be too risky with a big bang of both AX and RELEX the same day. The extra effort of carrying out a second implementation was marginal but the gains were tangible and well worthwhile.”

– Jimmy Olsen, Logistics Manager, Granngården

A double integration

The project to implement both AX and RELEX started in February 2014. The AX project was however delayed for more than one year, but the RELEX project went so quickly that Granngården decided to integrate RELEX with its old ERP system immediately rather than waiting for the AX project to be completed. This allowed the configuration of the SCM system to proceed and deliver significant gains before AX was up and running. The additional effort of integrating RELEX a second time with the new system was minor and more than outweighed by the interim benefits. The project was a success. All 110 stores, and 250 distributors through the DC were brought onto the RELEX system within 5 months.

“They understood our business and our challenges in no time.”

Jimmy Olsen

Logistics Manager, Granngården

“We were surprised by how straightforward the whole process was,” says Jimmy Olsen, Logistics Manager at Granngården. “It allowed us to get RELEX working successfully ahead of the AX project and reap the benefits of the new system sooner. And that meant we could devote more attention to the ERP implementation when that started.”

By the time AX finally went live with RELEX, Granngården could already see the initial results. For Granngården, this meant an even bigger win: a safe go-live with the ERP system. The decision to first implement RELEX ensured that AX could be safely implemented by simulating the go-live already before it took place. Due to the projections that were done, actions could then be taken in order to have enough stock for the go-live without jeopardizing capacity levels at the DC. By doing this, Granngården could ensure a safe implementation and make sure all stock levels and order proposals were accurate already 6 months before.

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decrease in stock value in stores

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decrease in stock value in the central warehouse

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increase in sales

Results

Prior to implementing RELEX, Granngården had been unable to maintain separate security stocks for its e-commerce channel, but wanted to honor its same day delivery guarantee on orders placed before 11am.

“It was typical of the collaborative relationship we forged with RELEX,” says Olsen. “We’d hit a problem, we’d ask for the RELEX team’s advice and they’d solve it. Simple. They understood our business and our challenges in no time.”

In this case the RELEX system was able to help Granngården achieve an essential goal; to put individual virtual ring-fences around stock. Specified quantities of stock can now be reserved for each of its channels, online and physical, whilst still remaining part of a single inventory held in one location. This allows imbalances between the two to be adjusted as soon as they emerge and without the need to actually move any of the stock.

“It was very much a conversation between us and Granngården,” says Erik Kinch, Business Manager at RELEX Solutions. “We listened closely to them and they listened too. Yes, it was about implementing systems but more than that it was about mutual understanding and achieving common goals.”

Results

  • Better data management enabling improved forecasting and control over campaigns and seasons.
  • Tighter control of seasonal introductions and ramp downs.
  • More efficient and proactive inventory and handling management, and better use of freight-free limits.
  • Retail staff freed from replenishment duties, all work is now done by the central organization.
  • Store and e-commerce stock ring-fenced within one pool for maximum efficiency.
  • Improved supply chain transparency throughout the whole organization.

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