Inventory and Purchasing Optimization
Reduced tied-up capital
Mekonomen is Sweden’s leading automotive parts chain, with a distribution center that delivers stock to its own stores. Mekonomen offers a wide and easily accessible range of reasonably-priced and innovative solutions and products to both consumers and businesses.
Facts in Brief:
Sweden’s leading automotive parts chain has used SOLO inventory optimization ever since 2004. The 30,000 meter distribution center in Strängnäs has 65,000 items, and delivers 300-400 pallets per day to 220 stores.
Sales total SEK 3.5 billion.
Effects: a doubling of inventory turnover from 2-2.5 to 4-4.5
The right quantity of the right product delivered on the right day.
Mekonomen was established in 1973 under the name of Bileko by two entrepreneurs, Ingemar Fraim and Leif Möller. They drove around in an old Mercedes and delivered exhaust systems to gas stations.
The customers received their parts within two hours after they ordered them. The fast delivery times proved to be the key to success, and their assortment soon grew to include brakes, front ends, wheel bearings and other spare parts.
Today, Mekonomen is the leading automotive parts chain in Scandinavia, and has its own wholesale operation and about 220 stores. The company also cooperates with more than 1,100 car repair shops and garages throughout Scandinavia.
“We have experienced fantastic growth,” says Niklas Nordén, “and this shows that we have the right model: we challenge distributors of original parts by offering a more affordable solution. "
The distribution center where Niklas Nordén works has about 65,000 items that fit a total of 5,000 automobile models. Collaboration with contractor/suppliers who deliver directly to the shops, gives the company access to an additional 400,000 products.
In connection with the implementation of the SOLO inventory management system in the distribution center in Strängnäs, the company built up an entirely new logistics organization with completely new methods of working.
“This was necessary in light of the enormous growth we have experienced over the years. We supply 220 shops in Scandinavia with 1.5 to 2 pallets of goods every day, five days a week. This means that a total of 300-400 pallets are sent out every workday. During a day, we receive 200-250 pallets from our suppliers. All the suborders are done through SOLO,” explains Niklas Nordén.
“But SOLO doesn’t do the job alone. Without our competent employees, it couldn’t function."
The logistics department in Strängnäs currently consists of a logistics development function, customer service, and logistics planning. Those placing sub-orders use SOLO as their tool in optimization inventory levels. They are engaged in a continuous dialog with the suppliers.
“Thanks to our great personnel, the system works fantastically. This has resulted in great changes since we began using PromoSoft’s systems. The workload has become more even, as has the logistic flow, and we have doubled inventory turnover from 2-2.5 to 4-4.5, which naturally means considerable savings as there is less capital tied up in inventory.
“Without the inventory optimization system, there would be times we would have a mountain of goods on pallets outside the distribution center. It would be completely unmanageable. SOLO is combined with a system for WMS that is used in order picking.
“Assembling the system was problem-free, which is basically a requirement if this system is to work. SOLO is a stable system that almost never causes difficulties. We are very satisfied with it,” Niklas Nordén observes.