Jens Schultz A/S was established in 1969 and has developed into being the largest supplier of timber products, building materials, tools, fasteners, work clothes and house and garden equipment of South Funen in Denmark. The company has a turnover of DKK 200 million and 85 employees in 3 departments.Thomas Skovlund Madsen, CEO, Jens Schultz A/S
When Jens Schultz A/S first initiated the optimisation project, it was to reduce the too heavy burden of administration. Today, the company works according to the principle "smarter not harder", and savings worth several millions have become reality.
It was obvious to CEO Thomas Skovlund Madsen that the company had to optimise the way it ran the business. He was – and remains – convinced that smart use of IT is the path to progress. At the same time, it was also clear to him that a shift had happened in relation to the industry system, which was no longer aligned with the business needs of the company. An adjustment had to be made.
Focus on business before technology
The purpose was to establish a business-oriented approach rather than focusing solely on IT. On the basis of previous experiences, EG Management Consulting (EG MC) was brought in to manage and realise a holistic process based on a business-oriented upgrade analysis.
The streamlining process would entail better utilisation of the company resources, specification of better procedures and better utilisation of ASPECT4. This is why the company decided to combine a business analysis with an upgrade to ASPECT4 version 3.1.
We had a strong need for efficiency improvement within selected focus areas such as the processing of quotations and orders, purchase planning, warehouse processes and invoice verification.Thomas Skovlund Madsen, CEO, Jens Schultz A/S
The expected benefits have become reality
With a focus on realisable financial effects, 13 projects were defined which were to represent a total profit potential of DKK 4.5 million over a period of 18 months. Through systematic involvement, the employees also gained business understanding and insight into the significance of each person's efforts for the next link in the chain.
"The clearly described objectives, specific projects and large employee commitment have been absolutely crucial to the fact that we can now place check marks next to several of the expected benefits. For example, we have reduced our inventory levels by 10 %, which gives us a reduction in amounts tied up of DKK 4 million," says Thomas Skovlund Madsen.
Reduction in debtors and faster warehouse turnover
Already a year after the adjustment of the company processes and the customisation and upgrade of ASPECT4, the results were visible on the bottom line and in the daily business operations.
The facts that the company no longer wastes time looking for items in the warehouse and that it immediately follows up on debtors originate from the systematic review of the company processes performed in the initial phase. Once the ideal workflow had been identified, the processes and the financial system were adjusted accordingly and now support the exact workflow that makes best sense for the company.
We simply do things smarter today, which means e.g. that items are in the warehouse for a shorter period of time, and that payments reach our bank account more quickly.Thomas Skovlund Madsen, CEO, Jens Schultz A/S
Even though it is always particularly interesting to achieve visible results on the bottom line, it is important not to underestimate the value of the qualitative benefits, which have had equal focus in the work of optimising the company processes. The working day has become easier for the employees, and the service level for the customers has improved significantly. For example, the alignment of searches means that every customer can be serviced more quickly because data is found quickly. Customers can be serviced in the yard, and transactions can also be completed there. This also gives a faster and more coherent buying experience.
No resting on laurels
At Jens Schultz, the employees now know that it can be both fun and good for the economy to review processes carefully. "I had not dreamt of us achieving such impressive results. I thought that if we could achieve half of this, it would be very good. We continue to build on the motivation, sense of ownership and dedication that have been created," Thomas Skovlund Madsen says.
Systematically and using a list of prioritised areas for improvement, Jens Schultz continues the work. Bit by bit, the company processes are optimised and the benefits harvested.
The company's industry solution did not sufficiently support the business, and it was obvious that many of the daily processes could be handled in a smarter way. Jens Schultz A/S had become too bureaucratic, and optimisation was needed.
A business analysis coupled with an upgrade to ASPECT4 version 3.1 – implemented by a business consultant from EG DIY and headed by EG Management Consulting. 8 of the key processes in the company were reviewed in cooperation with both employees and management and formed the basis for 13 optimisation projects.
The following realised benefits all result directly from the analysis and upgrade work:
- Reduction of capital tied up in stock with a value of DKK 4 million
- Considerable savings in the employee area resulting from better planning
- Streamlining of inventory management in connection with dispatch and handover of items from the warehouse and reduction of the number of days in the warehouse by almost 10 %
- Better follow-up on debtors and shorter credit times, which has had a positive effect on liquidity.
Jens Schultz A/S was established in 1969 and has developed into being the largest supplier of timber products, building materials, tools, fasteners, work clothes and house and garden equipment of South Funen in Denmark. The company has a turnover of DKK 200 million and 85 employees in 3 departments.