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Alfort & Cronholm daily provides goods and services to 150 distributors of paint, hardware and building supplies. In 1998, IFS Financials™ was implemented along with a complete solution for sales and distribution. Later additions include a Web store solution and IFS Human Resources™ to manage payroll, sick leave and time & attendance reporting.
Increased demands
The distribution side of the business is affected to a great extent by changes in the surroundings. Stock must be continuously adapted to demand, seasonal variations and trends. Moreover, customers often have service agreements that put tough demands on the variety of products available and delivery performance. There is also a growing demand for more individual pricing as the character of the market changes. One of the most important tasks for trading companies, therefore, is to streamline and gain better control of the goods and information flows. Changing market
In the past, hardware stores, paint suppliers and building suppliers lived their own separate lives, but nowadays the picture is different. The customer base is less homogenous, more fragmented than before. International vendors are entering “home” markets, with a trend toward gathering everything under one house, as in the Bauhaus concept in Germany. “The major actors do a lot themselves, often buying large volumes directly from the producers,” says Thomas Steenhouwer, sales manager for Alfort & Cronholm. “Adding value to products, such as sales material in the stores and customized concepts, is becoming a major challenge for us wholesalers.” Mapping IT requirements
Alfort & Cronholm began to review its IT systems in 1996. Each department was asked to define what it required for its specific line of business. The main issue was the need to manage flows more efficiently. Other business and technical requirements included how the new solution would communicate with other systems.
“Our existing system was well-developed and advanced, but is was becoming outdated. It was also closed and difficult to develop further,” recalls Joakim Keskitalo, director of IT at Alfort & Cronholm. “We wanted a more modern interface and tools, and on top of that, we had the turn of the millennium to consider. Our overall requirements were clear: we wanted platform independence, a relational database and a solution that was flexible and scalable.” Choice of vendor
Of the 14–15 vendors that were scrutinized, 3 made the short list. IFS was selected because it was sensitive to Alfort & Cronholm’s needs. Moreover, IFS Applications is component-based and easy to integrate with other systems. “Alfort & Cronholm put high demands on the software because they had so many mature processes in the legacy system,” explains Peter Gärtner, sales representative at IFS. “We support these processes with a standard solution that has been supplemented to meet Alfort & Cronholm’s specific needs.” Realizing benefits
The system went live on time, and today 50 of the company’s 100 employees are using IFS Applications. As usual, the greatest challenge was to change behavior, but it was not long before an increasing number of users discovered the advantages of the new interface. “It was tough initially, but we didn’t lose any distribution time,” recalls Joakim Keskitalo. “The new system is more open than the previous one, and it’s much easier to use. Now data such as inventory transactions can be saved much longer, and our finance department now find that follow-ups are much easier.” Purchasing and demand planning
The capability to perform follow-ups and even forecasts is an important ingredient for trading companies. Alfort & Cronholm uses forecasts to meet the campaign demands and seasonal variations. Since IFS Applications includes integrated demand planning functionality, it is easier to ensure that inventory and demand are as balanced as possible. Improved flow management
The solution has recently been upgraded, with a new version of the inventory management component being put in place. This will help to set priorities and distribute assignments among warehouse personnel. Supervisors will be able to follow the daily work on screen and see who does what, which makes it much easier to reallocate resources as required. Orders will now go directly to the warehouse trucks. Via a client with a radio link to the business software, pickers will see the order on the screen in their trucks. “This will improve procedures and make them more efficient,” says Joakim Keskitalo. “Likewise, procedures for incoming goods will be automated, which will give us better flow management.” The open system
With the new version, the company is also planning more sophisticated sales support. The idea is that sales representatives should be able to look for information more actively in the system to check pricing, agreements, and customer data, and to generate quotes.
Today, Alfort & Cronholm’s business partners can access the business applications via the Internet, and associated customers can place and trace orders via the Web store. The company plans to extend this collaboration even more.
Joakim Keskitalo concludes, “For example, it might be interesting for a customer to see the status of an existing order. We have been discussing functionality from PipeChain, one of IFS’ partners, concerning a solution for automatic inventory replenishment in stores.”
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