Alas-Kuul Case Study

How Alas-Kuul is making an offer their customers can't resist

17% additional sales

Thanks to cross-sales and portfolio expansion, the revenue has increased 17%

250% increase of inventory turns

The entire warehouse is turning 15 times a year, compared to industry standard of 6x

100K transactions

Automation has resulted reducing manual data entry in an amount of 4 full time jobs

“Scanbro has played a crucial part in our success in the past years. We are using Scanbro to provide our goods on consignment and manage each inventory automatically and efficiently. Our salespeople can concentrate on sales because the automated system works for itself. And even more importantly, our customers have a convenient purchase process because they don’t need to place POs anymore.”

– Indrek Orro, CEO

COMPANY TYPE

Wholesaler of industrial goods

TURNOVER

Quarterly turnover of €10M

TARGET MARKET

The Baltics, focus on Estonia

EMPLOYEES

More than 70 employees

LAUNCH

Launched Scanbro 3 years ago

THE CHALLENGE

How to provide consignment without driving inventory levels high

It is well known that companies who provide goods on consignment, must have a strong balance sheet. Imagine, you keep your products at the customer’s location and until the moment of actual consumption, these goods are also on your balance sheet. Wouldn’t it be easier to sell the goods in a traditional way? As soon as the products are delivered, the ownership of the goods is also transferred to the customer and the deal is done.

It seems that providing goods on consignment is a dream come true for the customer. And it is, because the customers pay you only for the goods they actually consume and the moment they consume it. For a wholesaler, it’s a good way to strengthen the entire offering, win new customers, and make existing clients more loyal to your services.

Still, the question remains. How to provide goods on consignment and avoid driving inventory levels high? Continue reading to see how Alas-Kuul has managed it.

THE SOLUTION

Alas-Kuul asks its customers to register consumption with Scanbro application

Alas-Kuul started the partnership with Scanbro in the beginning of 2018. Since the inception, Alas-Kuul has provided the consignment service to 108 customers (as of April 2022) all around Estonia. This is how it works:

  1. Alas-Kuul agrees with the customer on the product range,
  2. Alas-Kuul provides one of the Scanbro applications for consumption registration:
    1. Smartphone application
    2. Smart cabinet
    3. Tablet and a scanner
  3. Alas-Kuul and a customer agree on inital inventory levels and purchase intervals,
  4. The customer starts registering consumption with Scanbro application,
  5. Data from Scanbro server is automatically transferred to Alas-Kuul’s ERP system:
    1. Automatic purchase orders, bill of deliveries, invoices, stockcounting journals
    2. Automatic warehouse transactions and automatic assortment sync
  6. Scanbro algorithms help to calculate the optimal inventory level for each product,
  7. The customer stock levels and assortment are adjusted accordingly.
 To illustrate the ecosystem on a picture:

THE OUTCOME

Alas-Kuul is making its all-time high revenue and winning new customers

If a wholesaler is distributing its goods in a traditional way, then there is always a question about the actual consumption by the customer and constant forecasting. By providing VMI and consignment solutions, you have the actual consumption data 24/7 at your hands, and by using data, you can beat the competition. Thanks to data and Scanbro inventory management solution, Alas-Kuul is making 15 inventory turns a year when an industry average is around 6 times a year.

Thanks to the easy and convenient purchase process, customers are also more loyal to Alas-Kuul’s services which results in higher cross-sales. On average, the sales with existing customers increase 17% during the first year after implementing Scanbro.

Last but not least, Alas-Kuul is making over 100 000 sales transactions with Scanbro solution annually. Imagine if your bookkeeping or sales team would need to manage this level of administration by themselves. This is around 4 full-time jobs! Today, Alas-Kuul can use this time for tasks that actually generate value. And even more importantly, for tasks that people enjoy doing.

“There are three main aspects why we chose Scanbro. They have a great team. There are no upfront investments. And they have a full ecosystem that works with our entire product range.”

– Indrek Orro, CEO

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