Air Spiralo streamlines its inventory management with Optimact
Time consuming and prone to errors. That is how inventory management at Air Spiralo could be characterised in the past. But Optimact, the supply chain planning software from Xeleos Consulting, changed that. The software package enabled the Dutch ventilation specialist not only to manage its company-wide stocks more efficiently, but to make forecasting more responsive as well.
Who is Air Spiralo?
Air Spiralo produces a wide range of ventilation ducts and fittings. These products contribute to a healthy living and working climate in homes, industrial buildings, and office buildings. In order to have the activities run smoothly, the independent family-run business has three branches, employing about 250 people in total. While the site in Finland primarily produces semifinished products, the Polish site focuses on manufacturing finished products. The distribution to customers mainly takes place from the Dutch branch in Schagen. Sometimes items are also shipped directly from Poland to the customers. Apart from its home market, the Netherlands, Air Spiralo also sells its products in many other European countries. As Air Spiralo is particularly strong in manufacturing, the company prefers to distribute its products through stockholding parties, such as technical wholesalers. Therefore, many full pallets and trucks leave from the warehouse. Larger ventilation specialists purchase directly from Air Spiralo.
Need for a less risky solution
Air Spiralo offers no fewer than 15,000 articles, of which about 1,100 are in stock in the warehouse in Schagen. Dave van Diepen, Operations Manager at Air Spiralo: “To manage our stocks, we used to
use Excel files, which we have continuously developed over the years. To calculate the order quantities, for example, we had also integrated the Camp formula. However, it remained a time-consuming and error-prone task to obtain the correct information from those Excel files. At some point, we decided to look for a solution that could lower the risk of false results and save us time.”
Air Spiralo hired an independent consultant in order to get a clearer view of the improvement potential. He concluded that the inventory management as such was good. The benefits of switching to a different solution would mainly be the reduction of risk and time saving, rather than a large inventory reduction. Moreover, a standard solution would make the organisation less dependent on that one and only employee who fully mastered the self-developed tool.
In the end, the Optimact software from supply chain specialist Xeleos Consulting emerged as the solution. D. van Diepen: “During the selection process, we immediately noticed the great flexibility of both the package and the supplier. Moreover, there were many similarities between our point of view and the vision of Xeleos Consulting. Like us, they also want to go further than just inventory management in their roadmap. They were immediately interested when we said we wanted to forecast better at customer level. That they had an eye for the supply chain as a whole really appealed to us.”
The report of the external consultant was the starting point for the implementation. “It contained a number of analyses about our supply chain and how we could organise it best. We drew up the implementation plan based on it,” Dave van Diepen says. “We were very cautious during that implementation. It wasn’t until we fully trusted the result of our calculations, that we flipped the switch and synchronised with our ERP system.” In the first phase, we focussed on better inventory management of the finished products in the Dutch warehouse. After some time, the finished products from the Finnish and Polish sites were added. Then, the semi-finished products and raw materials followed. Today, the stocks of the entire scope of articles are managed with Optimact. D. van Diepen: “This step-by-step approach – along with the guidance from Xeleos Consulting – turned out very well for us. In recent years, there have also been some shifts in which products we manufacture at which locations. Optimact has managed to deal with those continuous changes swiftly. Moreover, we have grown by no less than 20% in terms of turnover in the past five years. Therefore, we are very pleased that we have gotten rid of the limitations of Excel.”
Profit on various levels
Ever since Air Spiralo has been working with Optimact, the expected time saving has also been achieved. “This is undoubtedly one of the most important benefits. We used to spend up to three days a month going through the entire cycle. Nowadays, the job is done within a couple of hours. As a result, we can focus much more on “management by exception”. Every month we quickly go through all the exceptions. Also the package is much more user-friendly than our Excel tool. There are currently three employees who know how to work with the solution, two of whom use it daily. Obviously, we did have to fine-tune here and there. For instance, Xeleos Consulting made sure that we can introduce changes in batches in order to work more efficiently. As a result, we are able to work with the package very smoothly.” Another advantage is that Air Spiralo can now respond faster to changes in the product mix of customers. For example, the calculation rules in Optimact take the transactions of the past year into account in the forecast, though they have a heavier weighting factor in the last three months. “Because we used to include the twelve months as a whole, we often responded far
too late. Now we can adjust our stock levels more quickly based on changing demand,” Dave van Diepen explains. “We are also able to better link the history of products, so the transition from
old to new products is seamless. In fact, we combine two processes to forecast as accurately as possible. On the one hand, Optimact makes a forecast based on the history, on the other hand,
the sales department makes a forecast for the next twelve months, only with greater accuracy for the first three months. Apart from Optimact, we also calculate what it will mean in terms of the number of items at customer level. Combining these two processes enables us to manage our supply chain very efficiently.” Air Spiralo is also able to easily phase in and phase out customers now. “It is useful to know as from a certain moment, we no longer have to take the volumes of a certain customer into account,” Dave van Diepen says. “The other way around, when a new customer joins, this obviously has significant consequences for our stock. In the future, we would like to include the phasing out of products in the system as well, so that we can avoid obsolete stock even better.”
Evolving together with Optimact
Now that inventory management is largely in place, Air Spiralo wants to focus on even more optimising the total supply chain. “In that sense, it is nice that the Optimact package is also continuously being expanded with functionalities that can help us with this,” Dave van Diepen says. For instance, Air Spiralo and Xeleos Consulting are currently looking at how the system could further improve the EOQ (Economic Order Quantity). “We have our own permanent contact at Xeleos Consulting who is thoroughly familiar with our situation. It is nice to ‘spar’ with him when we want to add or change things. It is very important that we can count on the necessary knowledge and experience. And this is even a must when it comes to the design of our supply chain processes. In addition, it is reassuring that the flexibility that we opted for during the selection, is indeed provided.”