Case Berner Oy – Profitable stock and purchase management
Company and challenge
Berner Oy is a family business established in Finland in 1883. Its functions cover marketing and sales, own product development and production as well as effective services for managing product and supply chains. The head office, product development and production facilities are located in Finland.
This family business functions in Finland, Sweden and the Baltic countries. The core customers of the company include the private and public sector as well as consumers. Annually, the company aims for steady 5-10% growth in turnover and net profit by developing and expanding its business activities. It also aims to grow by executing company transactions.
To improve its customer service and satisfaction, the company wanted to increase product availability and supply guarantee to its customers. Additionally, the goal was to decrease the amount of tied capital by lowering stock levels and increasing stock turnaround time. The management team/board of Berner has committed to achieve these goals by investing in a new purchase operations model and tools to support it.
"Stock value has decreased by 30 % and stock-related cost savings are 1,75 million euro per year."
Maarit Mäkynen-Heltimoinen, Purchasing Manager, Berner Oy
The goal of the Berner management team/board was to find a tool which supports the new purchase operations model, which is easy-to-use, flexible and helps to minimise “Out of sock” situations,while improving supply guarantee and lowering stock levels. To achieve such a result, the solution had to combine sales forecasts, inventory management and purchase fill-up suggestions. The purchasing team hoped that the purchase planning could be automated and manual routine work would become less frequent.
Berner chose to use Expak Supply Chain Management which was connected to both SAP and Merx ERP systems to achieve their results.
Stock value has decreased by 30 % and stock-related cost savings are 1,75 million euro per year.
Thanks to Expak, managing stock levels is now systematic and goal-oriented. With the help of the programme, Berner can manage stock levels, forecast changes and ensure that products are constantly available. Cooperation has produced results which are in alignment with the goals set by the company’s management team- Stock value has decreased by 30 % in a couple of years. Furthermore, the total value of the stock has decreased by 8 million euro since the cooperation started. At the same time, operative cost savings are 1,75 million euro per year.
Stock level management and fill-up suggestions automatically
Thanks to Expak, planning purchases have become quicker and more precise. The programme updates the data and the calculations done automatically for the needs of purchase planning. In this manner, purchase fill-up suggestions are always up-to-date and the programme directly shows what to order and what not to order. The purchase planner can also edit suggestions and in this way, make sure that the stock always has products that our customers need.
Clear operating model for cooperation between sales and purchases
Thanks to the new operating model and Expak, the cooperation between various functions is now clear and unified. The new model allows sales operations to focus on selling and and on the needs of the customer.The purpose of purchasing department then is to fulfil the customer needs, control availability and steer the development of stock value. With the help from Expak sales forecasts, stock management and purchase fill-up suggestions function as a unified entity.
Delivery ready in 2 months, programme taken to use much earlier than scheduled
The programme delivery to Berner was executed gradually. First, a Proof-of-Concept was made which proved that the programme really meets the needs of the users, cooperation works and exhibited that the programme could be integrated with two different ERP systems. Delivery in first phase was completed according to plan in two months. This cooperation met Berner’s needs so well that they decided to start using the programme in full force in the middle of the test period, over a month before the agreed test phase was supposed to end.
- Expak’s Project and customer responsibility manager have been communicating consistently with us. Whenever we have had a question, they have quickly taken care of the issue, says Mäkynen-Heltimoinen happily.
"It is a tool that works well and which users like."
Maarit Mäkynen-Heltimoinen, Purchasing Director, Berner Oy
Users like it and we are expanding
The programme has been adopted by the purchase planning with remarkable success.
- “Expak’s programme is a well-working tool which is liked by the users. It clearly helps us to see what is important and what is not. The planner can also re-evaluate and edit the suggestions as situations change quickly and demands vary.”, says Mäkynen-Heltimoinen.
Thanks to this programme, the company has focused purchases of all business area to only the purchasing team.
- The use of the programme has been expanding all the time. It is used today in all integral business areas, such as professional , sports, our own production, cosmetics and well-being. In the near future, garden and lifestyle will be added to the programme as well, say Mäkynen-Heltimoinen when asked about the project development.
Automatic and smooth planning
The company’s vast customer base and huge product selection have brought challenges to purchase planning. Smooth working requires automating calculations, since this allows purchase planners to focus on solving tricky situations.
– “Expak’s programme handles forecasts and gives fill-up suggestions automatically. Without it we wouldn’t be able to centrally control the current number of products, all forecasts, purchases and stocks, with our current resources.” summarises Mäkynen-Heltimoinen.
Stock value decreased by 30 % and stock-related cost savings by 1,75 million euro per year
Thanks to the programme, this family business can respond faster and more efficiently to the needs of its customers and overall, conduct a much more profitable business.
- During the past couple of years, the stock value has decreased by 30% and the availability has stayed steady all this time. The stock value has decreased during our cooperation by 8 million euro and we have also calculated the profit benefit through sales. If we would want to achieve the same benefit via sales channels, we should sell more than 25 million euro than what we currently do.” explains Mäkynen-Heltimoinen.
– We have achieved direct operative cost savings while getting rid of out of date products. Annually, we are currently saving 1,75 million euro per year from stocks.” says Mäkynen-Heltimoinen.