The Challenge
Purchasing used to be made based on min/max parameters, manually adjusted in Microsoft Dynamics AX
Too much time spent on managing SKUs
Stock levels were too high and service levels were suffering
The result
- 40% increase in turnover ratios
- Improved service levels
- Much less time spent on the buying process
- Dynamic recalculation of forecasts and safety stocks
- Increased management overview
“The reason for our investment in AGR was simple: It makes my life as a purchasing manager easy and it is capable of a lot more advanced calculations than our ERP system (Axapta). It has also helped us to increase turnover ratios by 40% on average while improving service levels at the same time.”
- Kalli K Ltd
- Davíð Hjaltested, Purchasing Manager, Kalli K
Prior to the implementation of AGR Inventory Optimiser, Kalli K had been doing the demand and inventory planning in Microsoft Dynamics AX. Purchasing was based on simple min/max methods. There was no dynamic update of these parameters, which meant that they became outdated when sales patterns or buying preconditions changed. Kalli K had to spend a vast amount of time in monitoring the stock situation and constantly reviewing the purchasing parameters. Stock levels were too high and the overview of ongoing trends was very limited.
Automation of inventory planning tasks
AGR automatically calculates order proposals at optimised intervals for all of Kalli K’s suppliers. Exception reports alert staff to any extraordinary stock movements so measures can be taken in time to prevent stock-outs.
Dynamic update of safety stock levels
Instead of using manually entered parameters for its purchasing, Kalli K now uses dynamic forecasting and calculation of necessary safety stock levels, based on optimal service levels.
“We have been extremely happy with the results. The payback on our investment was extremely quick. In addition to direct inventory savings, the AGR solution has helped us to improve our purchasing processes, increase overview and increase supplier collaboration,” says Davíð Hjaltested, Purchasing Manager.
