Case: Fritz Hansen
When Complexity Demands New Decisions: How Fritz Hansen Released DKK 13.2M from Inventory
“When Inact finished the presentation, it was a no-brainer. We had to get started.”
- Interview with Jesper Birkmose, Purchasing Manager, and Morten Schou Jakobsen, Commercial Manager
Highlights
The Challenge
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A growing portfolio with more categories and SKUs increased supply chain complexity and intensified the need for consistent data and decision principles.
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Demand surged significantly during COVID-19 and normalized quickly after the reopening — changing the requisites for inventory management and planning.
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Several processes were handled manually, making it harder to identify trends.
The Solution
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A cross-functional initiative focusing on inventory and tied-up capital, assortment complexity, and stronger alignment between supply chain and the commercial agenda.
Key elements included:
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Shared policies and principles for inventory, service levels, and assortment.
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Inact Now as a platform to operationalize data, categorization, and recommendations in daily work
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Workshops and sparring with Inact’s best practice experts to turn principles into action
The Result
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DKK 13.2M released through differentiated safety stock
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DKK 8M shifted from stocked items to make-to-order
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20–25% reduction in product families
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Stronger collaboration between sales and supply chain through a shared language
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Improved decision-making foundation across the organization
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When Complexity Changed the Rules
For many years, Fritz Hansen was defined by tight control and a strong heritage: quality, design, and a business where decisions were made close to production and customer needs.
But as the portfolio expanded with Lightyears (2015) and Skagerak (2022), daily operations changed. New product types, more SKUs, and different planning requirements meant the supply chain had to be managed differently.
Where they previously operated a make-to-order setup with almost unlimited variants, they now had a finished goods inventory.
This meant that the organization now had to handle minimum order quantities (MOQs) from external suppliers, longer lead times from international sourcing markets, and a more differentiated approach to inventory management.
“It’s a completely different business strategy. It requires a completely different way of working as an organization,” Jesper explains.
This increased the need for clear principles around inventory, complexity, and decision-making — especially as the portfolio grew faster than the organization’s overview.
But just as the organization was adapting to the new complexity, demand took off.
When the market shifted
During COVID-19, demand surged. Consumers shifted spending toward the home, driving record-breaking sales — the strongest in Fritz Hansen’s 150-year history.
“Demand was so high that the main focus was simply ensuring we had enough products to keep up.”
Jesper Birkmose
Purchasing Manager
But when society reopened, demand dropped quickly.
And when you simultaneously have goods on their way home, minimum order quantities (MOQ) that cannot simply be canceled and inventory dimensioned for yesterday’s demand, the equation can quickly turn.
“The market changed quickly when society reopened, and it created a completely new situation for our inventory and purchasing,” Jesper explains.
Inventory grew. But the overview was limited.
At the same time, planning parameters and safety stocks were largely handled manually without always being anchored in an overall inventory strategy.
Therefore, the challenge was not only high tied-up capital, but also a clear realization:
Fritz Hansen needed a shared approach to managing inventory and handling complexity – an approach both supply chain and sales could stand behind.
This became the starting point for a larger cross-organizational initiative focusing on inventory, tied-up capital and assortment complexity.
From “how we usually do it” to shared policies
Fit for Growth became Fritz Hansen’s framework for optimizing the company for future growth.
Not by chasing growth at any cost – but by making growth healthy through greater control over tied-up capital, policies and complexity.
The project consisted of three central tracks:
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Inventory and tied-up capital (differentiated planning)
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Assortment complexity (assortment)
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Strengthened collaboration between sales and supply chain (S&OP)
The core was to define and automate the policies that had previously existed as tacit knowledge:
Service level, safety stock and how to differentiate between products that should be stocked and products that should only be produced when the order is placed.
Here, Inact became an important part of the work.
“Previously, we ran with one fixed safety stock across almost all products. Now we can differentiate and treat products differently.”
Jesper Birkmose
Purchasing Manager
Not only as “software”, but as a shared foundation for data and decisions – and as a sparring partner with expert knowledge in supply chain best practice.
Inact gave Jesper a much stronger decision-making foundation in his work with purchasing and supply chain.
The data-driven insights made it possible to work consistently with the policies and principles that govern both supplier negotiations and internal prioritization.
At the same time, Morten’s commercial track was crucial.
Simplifying the assortment is not only a supply chain project, but also critical for sales: when the portfolio becomes too broad, it becomes harder to prioritize, sell and market the products that actually move the needle.
Here too, Inact plays a central role by making it easier to understand profitability and complexity across the assortment.
“We look at profitability in the products, and that is something we have used Inact for extensively.”
Morten Schou Jakobsen
Commercial Manager
The effect: lower tied-up capital, less complexity and more control
When Fritz Hansen moved from one-size-fits-all to differentiated policies, two things in particular happened:
- They released capital because they stopped applying the same buffer across products with different demand.
- And they created a shared language for decisions that were previously made on different premises.
“We update data every morning, so we always work from the same decision foundation – and the action lists make it clear where we need to act.”
Jesper Birkmose
Purchasing Manager
Fritz Hansen could see the effect in concrete numbers:
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DKK 13.2 million released through differentiated safety stock
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DKK 8 million moved from stocked items to make-to-order
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Reduction of product families by 20–25% through cleanup and focus on the core business
In addition, the S&OP track is part of the project, and collaboration between supply chain and sales has already moved closer together in practice.
“When you bring people from different departments together, you start asking questions you normally would not ask,” Jesper adds.
Collaboration has been strengthened because data, policies and insights are easier to share – and easier to act on.
“Today there is a completely different level of understanding – not only between supply chain and sales, but across the entire organization.”
Jesper Birkmose
Purchasing Manager
Externally, the project has also had an effect:
The company’s new policies support price and MOQ negotiations with suppliers.
This ensures best practice across the organization.
“If we follow the policies we have defined together with Inact, we know we are working according to best practice,” says Jesper.
Next step: same principles – globally
With clear policies and a transparent data foundation, Fritz Hansen can now make decisions with greater confidence and manage the supply chain more consistently across the organization.
As the next step, Fritz Hansen is rolling out Inact Now in the company’s international warehouses in the US, Japan and Korea.
The goal is to make planning easier, more consistent – and ensure management based on the same policies globally.
“Inact makes the complex simple.”
Jesper Birkmose
Purchasing Manager
But most importantly, the company has achieved something that goes far beyond inventory optimization and handling assortment complexity:
A shared decision-making foundation.
A shared language.
And a stronger supply chain foundation for profitable growth.
About the case
In this case, you will meet Jesper Birkmose (Purchasing Manager) and Morten Schou Jakobsen (Commercial Manager) from Fritz Hansen.
Jesper works with purchasing and tied-up capital in the supply chain, while Morten works with assortment, pricing strategy, and sales.
Together, they lead two key tracks in Fritz Hansen’s Fit for Growth initiative:
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Optimization of inventory and tied-up capital
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Reduction of assortment complexity with a focus on the core business
The initiative was launched as a cross-organizational project with one objective:
To create a stronger decision-making foundation for the company’s supply chain.
About Fritz Hansen
Fritz Hansen hardly needs an introduction — the company dates back to 1872 and is internationally recognized for iconic furniture and design classics created in collaboration with some of the world’s most renowned architects and designers.
Today, Fritz Hansen is a global design company with more than 300 employees, production in Poland, and a portfolio spanning furniture, outdoor, as well as lighting and accessories.
The portfolio has been expanded through the acquisitions of Lightyears A/S in 2015 and Skagerak A/S in 2022. These acquisitions have opened new markets and product categories, while also increasing the need for a shared structure and clear decision principles in the supply chain.
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For you who:
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Want to prioritize customers, products, and suppliers based on actual business value
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Want to connect strategy and operations so decisions support the core business
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Need insight and overview to make better and faster decisions