DAFA produces a wide range of products and total solutions that seal, damp and protect in construction and industry. DAFA is a family-owned wholesale and manufacturing company with 130 employees which is headquartered in Aarhus and has affiliated companies in Germany, Sweden and China.
Top line and profit margin
DAFA wanted to grow and, among other things, looked for ways to reduce costs. The key was to introduce range management where the decision-making basis was data rather than gut feeling.
“Previously, we sometimes bought products for inventory if a single customer purchased the product just once. Now, we have become data-driven in procurement, and everyone knows the ABC codes. The next step is to analyse and prioritise customers in the same way,” says Business Controller and Project Manager Pernille Sehested.
Results
- Turnover rate increased from 6.8 to 8
- Reduced inventory by 20%
- Maintained reliability of delivery of 98%
A management tool
Once a month, a group of managers challenge each other to optimise DAFA’s business. The basis is figures from ABC Analyzer, prepared for each meeting by Business Controller Pernille Sehested.
“We invited the production manager to the last meeting. We had stocked several semi-manufactured goods, but our analysis showed that this did not make sense: We should only produce to order. So we are focusing on changing this. It’s a matter of prioritising. We can’t do everything, so we have to make a conscious choice about what we don’t do,” says Pernille Sehested.
Supplier negotiation
Strategic buyers use the concept in supplier negotiations. They can choose to prioritise volume discounts or delivery times and reliability of delivery, so that, for example, AA products have an improved lead time.
Listen as Business Controller Pernille Sehested talks about their project and the prospects for DAFA in the video below.