The company Electra in Kalmar was founded in 1949. A genuine Småland business acumen has been an important driving force in what can be described as a success story. At the turn of the millennium, sales had increased 3,000 times and one of the unique things is that Electra has never shown a negative result in its company history. Today, Electra is a listed group with Electra Gruppen AB as parent company. The majority of operations are conducted in the subsidiary Electra Sweden AB with the Electra Retail and Electra Logistics & IT business lines.
Some figures from the end of 2020 give a picture of the scope of the business; almost 2 billion in sales, deliveries to 500 stores, 55 new stores during the year and a range with almost 10,000 products. One of Electra's success factors is strategic collaborations with strong brands such as Samsung, Sony, Canon, LG, Philips and Nikon. A central part of retail is Electra's various chain concepts such as Elon Ljud & Bild with almost 140 stores, Ringup which is Sweden's oldest independent chain for telephony and IT solutions and the home electronics chain Digitalbutikerna with about 70 stores.
A strong support for the buyers in a company that constantly
growing in number of suppliers and items
Electra Sweden's purchasing organization has a total of contact with approximately 150 suppliers worldwide and in one year approximately 1.5 million items pass in and out through the gates of Electra. For buyers, it is a challenge to be in the middle of the value chain between suppliers, stores and end customers. It is an intensive work to handle a constantly growing flow of new products, and the work becomes extra intensive because, for example, the consumer electronics industry is rapidly changing and many products have short life cycles.
Peter Hultgren is one of eight buyers at Electra Sweden and he shares his thoughts on the importance SOLO has had in the daily purchasing work. For more than twenty years, Peter has worked as a buyer at the company. The buyers are responsible for their own category areas, which can be compared to business areas, and some of these are TV / picture, IT, Audio and Telecom. Peter has a shared role and works with both SDA (household appliances) and parts of the Telecom range. Like his colleagues, Peter works very closely with the company's sales department, whose sales people have close contact with the stores. Together, they discuss current customer needs, and then the buyers make sure to meet the need.
- A central part of my work is to have contact with different suppliers and also do good business with them. The fact that SOLO frees up valuable working time means, for example, that I can spend more time on supplier contacts and drive even better business. Before we got SOLO a couple of years ago, we worked entirely in the business system, with fixed order points, which required completely manual assessments of expected sales forecasts. You had to go a lot on gut feeling and it was the same for my colleagues, says Peter.
Dynamic order points based on history
instead of decisions made on gut feeling
As the single biggest difference with SOLO compared to the old routines, Peter highlights the proposals for dynamic ordering points left by the system and which are based on sales history.
- It has freed up a lot of time for us in purchasing and we can spend that time working more long-term and strategically. At the same time, the fact that many products have short life cycles means that we still have to make some manual assessments because there is not enough history. The fact that as much as perhaps 70% of the purchases are based on publishers from SOLO still means great time savings. Part of that time I can spend supplementing and optimizing the information in the system. This is how we get a real leverage effect where SOLO helps us with smart purchasing decisions.
Decreased inventory levels despite sharply increased sales
An important success factor for Electra has always been: "We dare to win, but take cautious risks and invest wisely". One of the investments has been the choice of SOLO as system support to, among other things, increase the inventory turnover rate, reduce inventory and facilitate the work for buyers. 2019 was the first full year with SOLO and the following year there was a clear indication of an important "SOLO effect"; average inventory decreased by 3.6 percent while sales increased by 10 percent.
These are impressive figures and although there are certainly more factors that have had an impact, SOLO is considered to have played an important role in optimizing inventory. For the employees at the purchasing organization, SOLO has also meant a big and positive change. They have taken the step from personally controlled routines and decisions to a more uniform purchasing process that is faster, smoother and more efficient than before.
An exciting future awaits Peter Hultgren and his approximately 150 colleagues within Electra. Towards the end of 2021, it became public with a merger between Electra and Elon Group, which has approximately 280 stores. The merger depends on decisions both at general meetings and by authorities, but the conditions exist for establishing a very strong “multi-retail player” in the market that becomes comprehensive in consumer electronics and white goods.