The Challenge
Inefficient forecasting due to demand fluctuation
Needed a flexible and adjustable solution
Clear overview needed
Stock levels were too high
The result
- 35% lower inventory levels
- Exceptions managed efficiently
- Improved service levels
- Workload and employee reduction in the purchasing process
- Increased management overview
“One of the first tasks after I completed the buyout of Johan Rönning was to ensure optimal inventory planning by investing in AGR ́s solution. That decision was based on prior experience with the system at two other companies I have managed.”
- Johan Rönning
- Bogi Sigurodsson, owner and board chairman of Johan Rönning
Solutions
Managers at Johan Rönning had previous experience with the AGR solution at other companies, as Bogi Sigurodsson explains. They therefore knew the results that could be expected from the system. The Manage by Exceptions or MBE module was installed and adjusted to recognize situations needing special attention. MBE is designed to deal with situations that do not fit predefined patterns. Reports can easily be defined to meet specific customer needs and can be generated at predefined intervals to draw attention to situations that need special attention. This increases efficiency and forecasting accuracy, producing impressive results by tuning stock levels to the desired service level.
Results
“Since we implemented the system we have lowered our inventory levels by over 35%, this has freed up valuable working capital in our business. The main reason for this staggering reduction is the powerful MBE module.” says Gísli. Today, companies need to follow best practice solutions in order to keep a market advantage. AGR is currently helping organizations moving from inventory optimization theories towards practical initiatives that improve corporate financial performance, while maintaining customer satisfaction.
