Electrolux, based in Sweden, is the world’s largest producer of appliances and equipment for kitchen, cleaning and outdoor use for both domestic and professional users. It is the company’s proud boast that every second, two people somewhere in the world buy a product from the Electrolux Group.
Electrolux Portugal has been in operation since 1925 and ranks among the top five suppliers in the country. Its customers range from small retailers to hypermarkets; from caterers, restaurants and hotels to construction companies who supply new homes with built-in appliances. Product lines, supplied from manufacturing plants abroad for distribution in Portugal, include household and leisure appliances, vacuum cleaners and professional catering appliances.
Electrolux employs over 82,000 people worldwide and generated sales in excess of EUR 13 billion in 2002.
Business issues
Electrolux’s manufacturing plans and stock levels are based on annual sales forecasts from all operations, including the one in Portugal. This means that full and timely reporting back to headquarters in Sweden is vital for success. It helps Electrolux to make the best decisions, see how the market is responding and adjust manufacturing and distribution based on full and up-to-the-minute data.
Customer relations also needed improvement, particularly the sales orders, which were taking too long to process. On a more detailed level, pick lists were identified as a serious problem: orders from the sales team that needed to be located quickly in the warehouse and loaded for delivery were drawn up on paper. Too much paper and too many people slowed down delivery times.
In 1992 Portugal had implemented an in-house application that was already in use at the group’s headquarters. The specific aim was to improve the Portuguese division’s management of after-sales technical assistance. However, dissatisfaction with the global IT application – mainly due to lack of proactive cooperation from the suppliers - led to a search for a new distribution software solution.
Solution and capabilities
Several options were studied until Electrolux Portugal decided to go with IBS integrated distribution management software. IBS was chosen because of the reliability and flexibility that distribution software provides. Staff from Portugal travelled to Denmark to observe how IBS financial management software was delivering pronounced results for the Danish Electrolux division.
Electrolux also worked with IBS on a specific application that has enabled the company to eliminate the use of pick lists altogether. The sales force now produces multiple-copy invoices at the same time as delivery notes are created.
Electrolux Portugal has also developed improved customer credit management with IBS. The financial system provides a detailed breakdown of outstanding invoices and the number of days they are overdue. Customer managers are now able to make much speedier and more accurate decisions regarding extended credit to individual customers.
The most significant step has been to equip the sales force with laptop computers, running an adapted version of IBS customer relationship management software. Initial results have been highly encouraging. The company plans to extend the use of the new tool to its entire sales force and add new capabilities to the process. This CRM application places all the relevant information at the immediate disposal of the sales person: customer orders, credit and payment history as well as product details, stock levels and delivery times. It also means that when a sales person leaves the company, someone else can take over the customers - already equipped with their full history and details.
IBS distribution software consists of supply chain automation software, warehouse management software, inventory management software, logistics software, sales-call planning, CRM software, financial management software, business intelligence software and e-business software. The IBS distribution solution speeds up sales and purchase processing, optimizes stock levels, minimizes errors and out-of-stock scenarios, and enhances logistics planning.
Benefits and value
The partnership with IBS has helped Electrolux gain a valuable competitive edge. The company can store and have immediate access to information about its customers such as sales trends, stock turns and ordering patterns. This information enables Electrolux to produce more accurate forecasting and planning and lets them anticipate their customers’ needs, which in turn leads to increased customer satisfaction.
The IBS distribution software solution has also benefited Electrolux by eliminating the time- and labor-consuming use of pick lists. The addition of multiple copy invoices has helped Electrolux to eliminate a large number of intermediary procedures, resulting in a fast, direct and profit-making routine.
IBS has delivered big improvements and valuable benefits in the way Electrolux operates in a highly competitive market. IBS provides Electrolux with dependable IT applications that work for the good of the company – not the other way round.
