Fogliani reduces inventory levels by 13% and saves AUD 410,000 per year
Customer Story
As Italian electrical supplier Fogliani expanded, the company found it needed to expand its IT solutions as well. Optimised procurement has led to a 13 percent reduction in stock levels and saves the company EUR 250,000 (AUD 410,000)annually.
Samuele Fogliani, Sales Director of Fogliani saw ROI within 1.5 years of implemeting IBS inventory management software
Company background
Fogliani is one of the leading distributors of electrical products in the Lombardy region of Italy. The company, founded in 1971, originally specialised in industrial automation. It has since expanded its product range to include lighting systems, air conditioners, electrical tools and components and equipment for civil and industrial plant engineering.
Fogliani employees 40 people and had a turnover of EUR 40 million (AUD 66 million) in 2002.
Business issues
Fogliani's business strategy is focused on its customers. The company's aim is to forge closer relationships with its 4,000-strong client base. Fitters, electricians and retailers usually buy Fogliani's products directly from the wholesaler's numerous subsidiaries. Fogliani stocks in excess of 75,000 products ranging from cables to lighting systems. In fact, the majority of company's core business is derived from its multiple subsidiaries.
In addition to the company's headquarters in Busto Arsizio, Fogliani operates a number of subsidiaries. These include seven warehouses, two sales offices and a showroom in Italy along with a new subsidiary in Romania. As the successful Italian electrical products supplier expanded its operations, it found a need to expand its IT solutions as well to better manage its inventory.
In the last few years Fogliani has updated its IT system more than once, providing changes that responded to contingent needs, but without focusing on a structured approach. A consistent strategy was needed for the substantial growth that has characterised Fogliani in the last few years, especially with respect to opening new shops.
Solution and capabilities
Fogliani finally decided to replace its old Enterprise Resource Planning (ERP) system in order to better manage its growing business. The company chose IBS' software solution for supply chain management, IBS bEnterprise. IBS supply chain management software for distribution, marketing and sales were selected to support the company's activities.
From an operational point of view, the most important improvement has been the unsurpassed control of the warehouse. Available space has been optimised and inventory movements are closely tracked. IBS supply chain management software has helped the company with inventory location and replenishment routines that are based on real customer demand and market expectations. At the same time, Fogliani maintains constant control of the progress of purchase and sales orders, as well as the related documentation workflow, by allowing sales outlets to check on order processes.
With IBS supply chain management software, Fogliani is empowered with sophisticated tools that enable the creation of procurement suggestions. Demand forecasting enables Fogliani to make realistic projections of future requirements for sales and demand. By analysing the predictions given by the software, the company is able to plan orders by taking advantage of opportunities, such as extra discounts or other particular conditions offered by its suppliers.
Finally, IBS supply chain management software for' sales and marketing provides Fogliani with complete transparency and control of its customer relations, throughout the sales cycle and across the range of communication channels. Order entry and information access via the Internet will give Fogliani's customers enhanced interaction with the company.
Today, Fogliani boasts modern logistics systems driven by and focusing on the business decisions of the company.
Benefits and value
IBS automation has enabled Fogliani to optimise warehouse rotation by reducing the amount of excess inventory resulting in a reduction of delivery errors. IBS supply chain management software's intelligent functionality allows such errors to be catalogued and analysed, highlighting their causes to better prevent them in the future. Delivery errors and returns have been cut by 25 percent by simply improving the workflow of sales order documentation and creating visibility throughout the entire supply chain.
As a result of the decline in delivery errors, Fogliani's customer service levels have improved dramatically.
Fogliani's new IT solution has improved order and forecast information between sales outlets and manufacturing, optimised storage space per stock item, optimised procurement and eliminated procurement of non-selling items. These benefits have increased the company's stock turnover from 4.1 to 5.1 turns per year. Inventory levels have been lowered by a staggering 13 percent, translating to annual savings of EUR 250,000 (AUD 410,000).
Based on the improvements to Fogliani's inventory management alone, ROI with regard to IBS supply chain management software is expected within one year.
Name: Fogliani Region: Italy Operation: Wholesale and distribution Products: Cables, connectors, lighting systems, electric tools, electronic devices, alarm systems and air conditioners Employees: 40 Revenue: EUR 40 million (AUD 66 million) Website: Fogliani
Issues
Need to manage growing business
Need to manage inventory
Closer contact with customers required
Lack of a focused IT solution.
Solution
Integrated, modern supply chain management software solution for electrical products distribution
e-business
Sales order management
Distribution
Customer relations management
Procurement
Inventory management
Warehouse management
Business intelligence
Financials.
Capabilities
Enhanced procurement
Enhanced logistics planning
Stock level optimisation
Supply chain visibility
Demand forecasting
Business performance measurement
Improved workflow of sales order documentation
24/7 customer self-service online
Enhanced customer service.
Value
ROI in 1 year
Delivery errors and returns reduced 25%
Increased stock turnover from 4.1 to 5.1 turns per year
Inventory levels reduced 13%
Savings of EUR 250,000 (AUD 410,000)per year on inventory
IBS ERP Software