Case: Frederiksen Scientific

How a Commercial Approach Optimized Frederiksen Scientific

“Supply chain and procurement can only go so far if they don't collaborate across the organization" 

– CEO at Frederiksen Scientific, Torben Lynge Overgaard

← Go Back

Highlights

The Challenge

Frederiksen Scientific faced a high number of item numbers without a clear overview. This resulted in high resource consumption, large amounts of capital tied up in inventory, and a lack of focus on which products and customers were actually creating value.

 

The Solution

Frederiksen Scientific turned their supply chain on its head, making the customer their starting point. The customer segmentation supplemented the ABC analysis of the inventory that the company had previously conducted, and it enabled the company to create a common, data-based language that connected all departments in a unified commercial direction.

 

The Result

  • A strategic and data-driven approach to their supply chain

  • Better resource management

  • Targeted selection of goods

  • Clear prioritization of customers

  • Healthier growth
frederiksen_2018_016-3

“What kind of company do we want to be?” 

That is a question most growth companies ask themselves sooner or later.

At least, it was the fundamental question that Torben Lynge Overgaard posed to the board and management team at Frederiksen Scientific 3 years ago.     

The reality was that the company had too high a number of item numbers - around 5,500, of which approximately 2,000 were unprofitable. All products were treated equally, as there was a lack of a commercial approach to the creation of item numbers. At the same time, there was a lack of focus on the products' lifespan.

The initial analyses showed that 40% of the company's goods only accounted for 5% of the revenue. The high number of item numbers and the lack of differentiation led to less efficient use of resources, high capital tied up in inventory, and a lack of focus on the core business. 

To meet the company's challenges and to develop in the direction they desired, it became clear to Torben that inventory was the starting point for change. But the key lay with the company's customers.  

Supply chain meets sales

Therefore, the first step was to identify the customers who created value for the company.

"A general pattern that had formed," notes the supply chain manager, "was a lack of a commercial approach to things." Despite updated inventory policies, there was no connection between the creation of products and the priorities between them - and that required action.  

For the company's supply chain to become a commercial strength, it had to be turned on its head. It shouldn't just be about purchasing and inventory; it had to start and end with the customer. Frederiksen Scientific had already categorized their inventory for several years through an ABC analysis, but Torben knew that the company's new customer-centric strategy made it relevant to revisit the company's product assortment in light of the new data.

“We created a customer strategy because we needed to use our time in purchasing most effectively. Despite having brought structure to our purchasing, too many resources were being spent on CC-items.”
Frederiksen Scientific

Supply Chain Manager

The solution was a customer matrix that segmented customers into four categories based on profit and sales volume. By combining customer data and ABC analysis, they created a simple but effective decision-making tool that highlighted which customers actually created value:

  • Nurse/protect: High profit and high sales volume.
  • Grow: High profit, low sales volume.   
  • Develop: Low profit, high sales volume.  
  • Turnaround: Low profit, low sales volume.

The customer segmentation framed the service level and resource allocation for the different categories and gave the company a holistic view that made it possible to remove an additional 1,000–1,500 products. These were "difficult items," Torben emphasizes, which could only be removed because of the new customer-centric strategy.  

frederiksen_1200-pixel kopi

 

When a Common Understanding of Value Arises 

By turning their supply chain around and starting with the customer, Frederiksen Scientific began to think commercially across the business - including in operational management. Employees began to understand the value of both customers and products. Additionally, they were better able to differentiate between them and understand cross-functional connections.

Specifically, they became able to: 

  • Streamline resource use: Customers who were not profitable now had to pay extra for special items or change their behavior 
  • Reward their best customers: Their best customers received prioritized service and better prices on volume. 
  • Grow healthily and strategically: Segments with high potential became the target for active upselling—there was money to be made here.

With the help of Inact, Frederiksen Scientific could now incorporate customer data directly into the optimization of the supply chain. In this way, they gained a data-based decision-making foundation that made the meeting between sales, management, and purchasing easier. 

Structure Becomes Strategy

With the new customer focus, Frederiksen Scientific began to see their entire supply chain as one coherent system -  not just as inventory and purchasing, but as a tool for targeting the market and the most value-creating customers.

However, there was one final step - to unite the entire organization around the commercial logic.  

Even though Torben and his team had created a data-driven structure, they knew that the change would only succeed if it was anchored in all departments. They recognized that "supply chain and purchasing could only get part of the way, not all the way, if there was no cross-functional collaboration."

Therefore, the team translated the new customer focus into a commercial rule set for customers and products that adapted the company's tactics to the different customer groups. They implemented the necessary restructuring so that the customer-centric strategy became reality in in all departments.

Here, Inact Now was central, as the platform gave the entire company a unified data overview that translated complex data into actionable opportunities daily. Slowly but surely, the customer-centric strategy began to spread - from commercial decisions to operational processes.

The journey to Supply Chain-driven Growth

Ultimately, the strategy did not just become a project in the supply chain, but the entire company's shared direction.

The improvements were clear:

  • Common Logic: The entire organization now works based on the same commercial logic.
  • Sales Department Prioritizes: Everyone can see which customer category a customer belongs to and how they should be handled. 
  • Data-Driven Collaboration: Where collaboration was previously based on feelings and gut instincts, they now have the same data to collaborate on—all gathered in Inact Now. 

Frederiksen Scientific is pleased with the development and the positive changes the commercial approach has brought. Now, it is clear how it is "the entire organization that is engaged," and that they have "the right goods in stock for the right customers."

The collaboration with Inact clarified that the challenge wasn't that people refused to collaborate. The challenge was that there was no transparent data to collaborate on. 

With the customer-centric supply chain, the entire organization now knows where the growth opportunities are - and where they are not

In just a few years, Frederiksen Scientific went from reacting to the market to proactively managing it, but the journey is not over yet. Together with Inact, they now take the next step toward a value-creating supply chain - the suppliers.

About the Case

In this case, you meet Frederiksen Scientific's Supply Chain Manager and CEO Torben Lynge Overgaard. Together, they set out to develop a commercial approach to the company's supply chain.
 
At Frederiksen Scientific, the supply chain manager is responsible for the operational side of the business, while Torben is responsible for the commercial side.
 
With Inact's End-to-End solution, they developed a customer-focused overview of their supply chain that combined the two sides and created a common commercial approach across the entire organization. This made it possible to make decisions based on data rather than gut feelings and strengthened their business through more targeted inventory management, improved customer service, and increased profitability.
 
Now, Frederiksen Scientific's supply chain is not only operational - it actively drives growth.

 

About Frederiksen Scientific

Frederiksen Scientific is a company that sells science equipment to educational institutions and businesses in more than 35 countries. Founded in 1954, the company has over 70 years of experience and knowledge in the field. 

www.frederiksen-scientific.dk

← Go Back

Ready to take your supply chain to the next level?

Book a demo and discover how we can help you translate your organization's strategy to action in day-to-day operations, enabling you to make faster, smarter, and more profitable decisions. 

End2End is for you, who:

  • Wish to prioritize customers, products, and suppliers based on actual business value. 

  • Want to connect strategy and operations so decisions support the core business. 

  • Need insights and overview, so you can make better and faster decisions.