Situation
The Nordic wholesaler A.O. Johansen has more than 50 craftsman stores in Scandinavia and needed help with their handling of stock. In 2011, A.O. Johansen had an inventory level of DKK 460m and needed to reduce their inventory significantly to reduce costs.
Approach
Valcon helped A.O. Johansen reduce their inventory level realising a reduction of inventory by DKK 100m in total within 12 months. The reduction was achieved by training people in the IT systems and by changing relevant parameters for safety stock and for order sizes. To avoid double storage, rules were in addition made on how warehouses were to store different units. In the same 12-month period, revenue increased by 11%. Valcon worked closely together with the person responsible for procurement in respect to decisions and changes made, and the achieved results were accomplished without making any changes to IT systems and without compromising the customer service levels. Furthermore, negotiations with suppliers were executed to optimise lead time and order quantities.
Results
The project resulted in a significant inventory reduction and new and clear work ways for handling inventory.
