Purchasing Manager cuts excess inventory and has peace of mind

In this case, you will meet Kenneth Krogh Jakobsen, Purchasing Manager at Elcor in Southern Jutland. With factories in Denmark and Poland, the company offers complete solutions within electrical panels and related solutions, as well as a components division focusing on energy-efficient transmission solutions.

Without exaggeration, you could easily call Elcor a data-driven organization. Purchasing Manager Kenneth Krogh Jakobsen says that he has skilled analytical colleagues and that it’s standard in the company to use data as a guide rather than a gut feeling.

When we met Elcor, they were already good at working with data and had it served on a silver platter with traditional reports from business intelligence tools. And like many other professional companies, data was processed in Excel.

However, this presented a practical and all-too-familiar problem:

Everyday life’s to-do lists hit, and by the time Kenneth finally had time to dig into the inventory data, it was long since outdated.

Because reports are really good at what they do best: reporting. However, that’s where the party ends.

What was missing was not data or reporting but insights that the company could act on.

“We got excellent reports with data, but the reports didn’t tell us what to do.”

And with data without execution, Kenneth Krogh Jakobsen experienced several specific problems:

• High stock value, and an uncontrolled increase in inventory levels
• Over 100,000 SKUs were created, but only customer demand for around 10,000 of them
• Always on the back foot with outdated data and formulas in Excel
• Optimal inventory levels and parameters were not adjusted frequently enough

“We used a lot of resources on “firefighting” to satisfy customers,” says Kenneth Krogh Jakobsen, who was the driving force behind the collaboration with Inact.

In addition, Elcor wanted to better adjust their MOQ, where they previously had an MOQ of 10 pieces to get a better price, which is good when an item is in demand. However, when the demand on the item became smaller, they didn’t change the MOQ and ended up having five years of supply in stock.

In addition to the specific challenges with inventory, Kenneth says he was often in the middle of internal discussions about inventory levels and stock value:

In one corner stood Sales, who wanted to have plenty of items in stock to protect the relationship with customers, and on the other side stood Finance, who were screaming to reduce the stock value.

“Can’t we just do it ourselves?”

In 2022, the collaboration between Elcor and Inact began to cure the inventory headaches. In short, the goal was to:

• Get an analytical overview and specific instructions to reduce inventory
• Make the process of inventory management more intelligent and less manual
• Adjust inventory when the demand on an item changes

“Can’t we just do it ourselves?” was one of the questions Kenneth received from his colleagues who thought they could just develop their own solution. But in addition to the vulnerability and resource-intensive nature of programming their own solution, Elcor would be left on the platform with pure data, with no specific instructions. No execution. Again.

Working with inventory just got easier

There’s a world of difference between having a static reporting tool and a dynamic solution like Inact Now. What you can’t see is the team of Inact developers behind Elcor’s solution, constantly developing, maintaining and improving the platform.

Imagine coming in every morning to an updated inventory overview and clear instructions, so you know exactly which levers to pull to have complete control of the inventory. Imagine spending fewer hours on supplier meetings and internal discussions.

Today, this is the reality for Elcor. With Inact, Elcor has close collaboration with Inact’s consultants and automated daily calculations, so Kenneth and his colleagues always have fresh data.

“It’s a user-friendly solution that constantly updates itself and constantly guides us with specific recommendations on what to do,” says Kenneth Krogh Jakobsen.

Before Inact Now, Elcor’s insights into the inventory were based on static data and gut feelings, resulting in a reactive approach, which sometimes left Elcor feeling behind the curve. Working with Inact Now provides Elcor with automated and intelligent insights, allowing the company to stay ahead of the warehouse, and development.

“Now we have an automated solution that constantly monitors our inventory and tells us what to do,” Kenneth explains.

However, Inact Now is not just another Software-as-a-Service platform. The collaboration is built on, well, collaboration, where Kenneth uses the Inact consultants as experts and sparring partners.

“It’s much more than Software-as-a-Service. Every time we talk, I get a lot of specific inspiration and feedback because Inact talks to others in the industry every day.”

Peace of mind and reduced stock value by 18 million

“Inact Now gives us an analytical basis for decisions, and we can immediately see impact analysis calculations, so discussions and meetings are never based on gut feelings,” explains Kenneth, Purchasing Manager at Elcor.

From 48 million to 30 million in stock

Now you can safely call the CFO because during the period with Inact, Elcor has created results that really show on the bottom line:

• The turnover rate has increased by 37% in 12 months
• The stock value has been reduced by DKK 18 million in 12 months
• Since the last Business Review with Inact, the stock value has decreased by DKK 5.2 million

Previously, Kenneth noticed some skepticism between departments when he reduced inventory levels, and his colleagues in Sales were worried that it would affect delivery times and cause dents in customer satisfaction.

“They feared that we were doing it to optimize our own KPIs rather than thinking about delivery performance and customers,” explains Kenneth Krogh Jakobsen.

After working with Inact, the organization has a common starting point across the value chain. “There is greater trust and understanding because we can all see the same data. It takes emotions out of the discussions.” Kenneth explains.

He highlights three things about Inact Now as particularly positive:

• More execution than traditional business intelligence
• It’s user-friendly for colleagues and easy to deploy across the organization
• Faster to implement than building it yourself in, e.g., Power BI

In addition to results that fit in an Excel sheet, Kenneth Krogh Jakobsen reports better collaboration and peace of mind:

“We’ve gone from many long meetings and manual work to an automated tool that constantly keeps us informed. And I sleep better at night.” summarizes Kenneth Krogh Jakobsen.

Kenneth also points out that Inact Now acts as a defense for a frustrated Purchasing Manager who (often) fights an unfair battle to keep everyone happy. With Inact Now, Kenneth uses data as a starting point and can justify inventory to colleagues in both Sales and Finance.

The notifications you don’t want to miss

Finally, we asked Kenneth Krogh Jakobsen what working with Inact has given him, to which he replied:

“A massive bad conscience, because every time we talk, I realize that we can get more out of the system and the collaboration with Inact.” Kenneth continues: “Joking aside, we have an efficient operation and peace of mind about our inventory.”

Kenneth says that Elcor has gone from a reactive approach to the inventory, where they were often on the back foot when it came to adjusting the inventory, to being at the forefront today because Inact Now automatically notifies them of changes – before it’s too late

Eegholm is now part of Elcor. They have more than 200 employees in three factories in Denmark and Poland. The company offers complete solutions within switchboards and related services and also has a components division focusing on energy-efficient transmission solutions.

www.eegholm.dk