Tuko Logistics, a leading player within the Finnish grocery retail sector, is to partner with RELEX to implement a new replenishment system at its central warehouse. The new system will be implemented early in 2012.

Tuko Logistics is owned by Suomen Lähikauppa Oy, Stockmann Oyj Abp, Wihuri Oy as well as Heinon Tukku Oy. The company offers logistics and purchasing services to its clients within the grocery sector. Tuko Logistics operates a central warehouse in Kerava as well as a nationwide logistics network consisting of multiple cross-docking facilities. The company also offers a complete portfolio of purchasing services, ranging from a product database, to a selection of private label products, such as the Eldorado brand. In 2010, the company’s revenue was €760 million and the number of employees was approximately 900.

Grocery distribution is extremely demanding, and the replenishment process faces strict requirements; product freshness and high service level standards cannot be compromised despite the fast pace and the massive volumes being handled.

Tuko’s diverse client base makes an already complex operation even more challenging: “Every one of our clients has a slightly different way of doing things and with each we also have to factor in special events such as campaigns and assortment changes,” says Tuko’s Purchasing Director Markku Kettinen.  “There are thousands of these activities taking place every week. We need to integrate our daily operations tightly with the business processes of our customers’. This means, for example, that replenishment of our central warehouse has to be based on customer specific forecasts, taking into account each customer’s promotions and activities.”

Tuko Logistics acquired its existing replenishment software nearly ten years ago, but was never completely satisfied with its performance.  “Our current solution offers quite a wide range of functionality. Yet, the product managers in charge of replenishment are required to manually manage control parameters and to adjust order suggestions even for routine orders. The most challenging situations, such as our clients’ campaigns, have to be dealt with entirely manually,” says Tuko’s Planning Manager, Lauri Loikkanen. “With RELEX’s solution we can, for example, calculate customer specific forecasts automatically and set the right replenishment logic for fresh goods according to the characteristics of each individual product group”, says Mr Loikkanen. “We chose RELEX’s solution because of its advanced forecasting functionality and high degree of automation. This enables our replenishment team to focus their time on truly challenging or exceptional situations, of which we have plenty.”

When the need to further develop the replenishment process at Tuko Logistics was identified, RELEX was the natural choice, according to IT and Development Director, Peter Klenberg. “We have been cooperating with RELEX since 2007 on a number of projects. RELEX has amply demonstrated its expertise in retail logistics, and has always been able to keep the projects on schedule,” he says.

Tuko’s Purchasing Director Markku Kettinen says the goals have been set high: “Our most important goal is to improve our main KPI’s: service level and freshness for our clients, as well as reduced stock levels. This by itself is, however, not enough – we will also use RELEX’s forecasts for capacity planning throughout our entire logistics network.”