Inventory value has decreased by millions of euros and sales simultaneously increased by six percent
RELEX, Europe’s fastest growing demand forecasting and replenishment systems provider, now manages the inventory replenishment of HVAC-wholesaler Onninen. Onninen offers a comprehensive materials service to contractors, industry, public organizations and technical retailers. Onninen, a family established company, has been in the industry since 1913, and generated a revenue of 1,5 billion in 2011. Operating in Finland, Sweden, Norway, Poland, Russia, and the Baltic countries, they employ a total of 2800 persons.
Onninen has tried several different systems to improve their supply chain management. At the onset of the cooperation between Onninen and RELEX, purchases to Onninen’s central warehouse were planned using the material requirements planning functionality available in SAP. Onninen was searching for a more flexible and adaptive system to match with their processes, and that replenishment ordering could be based on real demand forecasts. The goal was both to decrease the value of inventory in the central warehouse, and also to improve the availability of products. In addition, Onninen wanted to increase the level of automation.
The project was carried out with an ambitious schedule. The implementation project and technical integration were carried out in three months, after which Onninen piloted RELEX’s system for the products of a selected group of suppliers. Following the production expansion decision, usage has progressively expanded for the central warehouse in Finland. The SaaS-service provided by RELEX, along with their experience with effective management of a large assortment of products and SAP integration enabled the project to be successfully implemented according to the tight schedule.
Already in the pilot phase, major improvements in availability and inventory turnover in comparison to the same period from the previous year were attained for the five pilot suppliers. For the total range of products currently being managed by RELEX’s solution, inventory value has decreased by millions of euros and inventory turnover has improved by 25%. At the same time sales has increased by six percent. Additionally, a very high level of automation has been achieved.
“Our goal was to find a system that would adapt to our processes and requirements. With RELEX, we have increased the efficiency of orders, while also improving the results. Product availability has improved by two percentage points, even though inventory value has dropped significantly”, says Kai Särkelä, Director of Logistics for Onninen.
“Our buyers appreciate the new system for its intuitiveness, ease of use, and flexibility compared to SAP. After implementing RELEX’s solution, the routine work for purchasers has significantly decreased, because with RELEX, even the order proposals of the biggest suppliers only need to be checked over for a few minutes, and less than one percent of order proposals need to be adjusted. We believe that with the new system, the buyers’ job becomes even easier,” explains Tatu Lähteenmäki, Supply Chain Planning Manager for Onninen.
”Onninen is a forerunner in supply chain planning, and the fact that we have been able to further improve Onninen’s processes, is something we can be proud of. Our cooperation with Onninen is a good showcase of the types of benefits that a SaaS-model provides for project schedules, and especially of its benefits in the technical implementation. The cloud service allows the customer try out the solution through a risk-free pilot, during which measurable results are achieved, and the decision to implement the system can be made based on the results of the pilot,” says Mikko Kärkkäinen, CEO of RELEX.
Onninen’s plan is to quickly expand the use of RELEX’s solution to manage the majority of their warehouse products in all countries.