CASE STOCKMANN: Better replenishment management

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Introduction

Finland’s leading chain of department stores, Stockmann, consists of seven major stores, all of which include a grocery department and carry the branding Stockmann Herkku (Delicatessen). Catering to a demanding clientele, the company provides an extremely wide selection of foodstuffs and beverages (up to 16,000 items) and many speciality food items.

Challenges

Stockmann wanted to build further on its established reputation for customer service and improve the availability of items at the grocery stores. So a project was started to develop store ordering.
The demand for high-quality service, outstanding freshness and the tight scheduling of deliveries needed to achieve this, presented the chain with a major challenge and required that demanding criteria be set for replenishment management.

Before the project began Stockmann’s stores relied on manual re-ordering. This process needed updating. Having identified the changes needed, Stockmann entrusted Tuko Logistics, with help from RELEX, with providing a 21st Century replenishment service for the chain.

The aim was to increase dramatically the proportion of orders generated automatically, thus reducing staff time consumed by manual ordering both at the stores and at Tuko, Stockmann’s wholesale supplier. This would allow staff to shift their focus towards managing exceptional situations and customer service.

Stockmann at a Glance

Finland’s leading chain of department stores

  • Founded in 1862
  • Revenue 2 005 million Euros
  • Employees 15,000
  • Divisions he Department Store Division and the Fashion Chain Division
  • Operating in sixteen countries

www.stockmann.com

Other objectives included improving the reliability of supply, guaranteeing the freshness of items offered to customers, and reducing stock levels.

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loss reduced in waste on average; even more for some fresh items

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availability maintained at the same time

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automation level of purchase orders

Solution

An ordering development project was started in the spring of 2011, and Stockmann unveiled the positive results of the RELEX systems implementation in late spring 2012. All objectives set for the project were achieved, even exceeded, despite the tight schedule.

“The investment paid itself back in just a few months, thanks to reduced waste and better availability,” says Development Manager Kimmo Jokilahti from Stockmann.

Now customers are able to buy fresher products at the stores and forecasts for seasonal, campaign and holiday sales have significantly improved. Thanks to RELEX, delivery vehicle journeys to the stores have undergone optimisation and the trucks now routinely carry fuller loads.

“The skilled, professional service teams of RELEX and Tuko played an essential part in the success of the implementation,” continues Jokilahti. “Especially since we renewed our ERP system at the same time as the implementation, which proved challenging with regard to resources.”

Department store

The Results

  • System support for selection and outlet design
  • Fast ROI. The project paid for itself within a few months
  • Tuko is responsible for operating and maintaining RELEX, so Stockmann avoided adding to its system maintenance workload and did not need any new resources
  • Working hours spent on ordering reduced; it is now easier to cover shifts during vacations

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