Danish production company has created a purely customer-driven value chain and leads the way in future supply chain control.
Using a new management model, Matas has gained detailed insight into product flow from its central warehouse to its stores. The model, which has helped its logistics function to manage inventory levels both at its central warehouse and in stores, now constitutes part of reporting to management.
Central management benefits all
Matas decided to transfer responsibility for store product ordering from individual store managers to its central logistics department, which now dispatches goods to its stores on the basis of a product range analysis. Excellent customer service is a cornerstone of Matas’ strategy and is now assured through precise inventory levels of the various product groups.
The goal is for the chain to be able to ‘stock the right product volumes at the right time and place’ at all times.
Some products are more important for customers and the business than others. The new move has been welcomed by the stores, which maintain daily customer contact.
Out of stock
“In the past, when we discovered that a product was out of stock in one of our stores, it was difficult for us to assess how urgent we needed to replenish the item. How important is the individual item in the individual store? Naturally, we always strive to maintain supply but when all is said and done, there’s a big difference in how important a given product is for Matas’ business,” says logistics manager Jesper Amsinck. “We therefore decided to team up with ABC Softwork and use their ABC Analyzer tool in our management group. It’s proven to be a good investment.”
ABC model ensures top and bottom line
With the help of the ABC model, Matas has analyzed its entire product range, dividing it into nine categories that show how profitable a given product is and how quickly it moves through the product flow. The theory behind the ABC model and ‘the double ABC’ is based on the idea that products have different values and buying patterns, and that a business’s success depends on its ability to focus on the key products (AA) that account for its core business.
ABC Softwork has given Matas A/S a practical management tool that provides a detailed picture of where the store chain has tied-up its capital investment.
This gives Matas’ top management and its logistics function a basis for balancing tied-up capital and customer service, i.e. reducing capital tied up in stock and maximizing revenue.
Put another way: Matas A/S has radically reduced its stock value while maintaining excellent customer service.
What did Matas do?
Ensuring excellent customer service while reducing capital tied up in stock locally and centrally.
The centralized logistics department now sees to it that the right volumes of the right goods reach the chain’s stores. Product flow analysis is handled centrally and the ABC model provides the basis for differentiated inventory and procurement management. The differentiation is reflected in a new form of management reporting.
The new management tool builds intelligence into managing the all-important product flow. The logistics function has radically reduced the business’s overall capital tied up in stock and gained a tool for maintaining excellent customer service. At the same time, the stores have more time to devote to customer service.
Matas employs approximately 2,500 staff, has 291 stores, a centralized warehouse in Allerød in North Zealand, a highly dynamic product range numbering between 15,000 and 20,000 active product items and up to 20% new products in its product range each year.
“We are constantly striving to reduce our stock. We therefore decided to team up with ABC Softwork and use their ABC Analyzer tool in our management group.
It’s proven to be a good investment.” says Jesper Amsinck