Remarkable gains in availability, sales and inventory turnover
Plantasjen is Scandinavia’s largest chain of garden centres and an established RELEX client. With 110 stores across the region, and an annual revenue of approximately €433M it is the market leader in Norway, Sweden, and Finland. In 2010, Plantasjen began a major overhaul of its operations, partnering with RELEX in the area of supply chain management.
Plantasjen at a glance
Founded in 1986
Annual revenue €433M
Market leader in Sweden, Norway, Finland
Active items 30.000 per store
Project Pre-study summer 2010, live pilot & rollout to stores 2011, full warehouse rollout 2013
Background and challenges
Plantasjen’s aggressive expansion in the years before working with RELEX had taken its toll and the company’s processes and operations had fallen behind. Store personnel were still responsible for replenishing all ‘year-round’ items manually.
Allocation of seasonal items was done centrally, but as this was very time-consuming the central team was forced to push the entire available stock into the stores in one go, well ahead of the season, leaving little room for reactions and adjustments in-season.
- Highly seasonal demand; 85% of profits is generated between April and June
- Wide range of products varying in value, origin, and shelf life
- Regional diff erences in climate and weather affecting local demand
Implementation and goals
The co-operation with RELEX started with a pre-study to establish the business case for improved forecasting, replenishment, and allocations. Plantasjen’s Nordic Supply Planning Manager, Anna Ståhle, explains “We already knew that significant improvements were attainable, but the pre-study was very valuable in quantifying the effects, using our own data. It is easier to make decisions with all relevant facts at hand.”
- Centralise store replenishment in order to free up time for increased customer service and sales in stores
- Implement “push-pull-push”– a combination of pre-season allocation, in-season replenishment, and end-of-season allocation – for seasonal items, to achieve high availability and attractive store presentation while simultaneously minimizing residual stock
- Efficient replenishment of year-round items in order to improve inventory turnover and availability
- Better and faster decisions supply planning with more
Plantasjen has made significant organizational changes, introduced a whole new product category, and moved from two warehouses to one central warehouse.
The RELEX system’s flexibility has supported these changes. ”In business nothing stands still,” says Ståhle “We never stop developing our processes and improving our organisation. It’s great to be able to draw on RELEX’s supply chain expertise, but because their systems are so adaptable and we’re empowered to make all the changes we need means we can make any changes whenever necessary and operate as independently of them as we choose.”
Moreover RELEX’s own R&D brought further improvements. “The version of RELEX we started with worked well, but the new one has taken performance to a new level,” says Ståhle. “Our daily forecast updates and order proposal calculations for ~1.7 million item-store combinations take under an hour. Although we have historical data for ~5.5 million item-store combinations in the system, reporting is very fast.”
Increase in on-shelf availability
increase in sales
in-store inventory decreased across the group (during 2011–2013)
At the outset Ståhle was hoping to reduce inventory by around 25 % and increase sales by 3–4 %. During 2011–2013 in-store inventory across the group fell by 32%, sales rose by 8% with the in shelf availability of items supplied by the central warehouse rising 12%! “Our best hopes weren’t simply met,” says Anna Ståhle, “they were comfortably exceeded.”
“It has been very inspiring to see our original vision come true,” says Ståhle “We now have a small, but highly efficient team managing replenishment to our stores and central warehouse, with excellent results. While time spent on ordering is a fraction of what it used to be, the gains in availability, sales and inventory turnover are remarkable. A great tool in the hands of a few brilliant people makes a world of difference.”
Significant increase in ordering efficiency; time saved in stores corresponds to about 10 FTE’s
Improved accuracy of pre-season allocations, increased responsiveness to local demand in-season, and more effi cient stock clearance; increased revenue
Purchasing to central warehouse seamlessly integrated with store replenishment; service level at the central warehouse, in many categories up more than 10%, while value of total in-store inventory down 32%
“We already knew that significant improvements were attainable, but the pre-study was very valuable in quantifying the effects, using our own data. It is easier to make decisions with all relevant facts at hand.”Anna Ståhle
“While time spent on ordering is a fraction of what it used to be, the gains in availability, sales and inventory turnover are remarkable. A great tool in the hands of a few brilliant people makes a world of difference.”Anna Ståhle
RELEX delivers measurable results in months
At RELEX we have helped businesses to master the retail and supply chain challenges they face – indeed the more complex the environment, the bigger the impact of RELEX. Working with us is easy, and you get measurable results in months. If you want to improve your company’s profitability fast, contact us to discuss more.