Logistics is an important factor in the group’s competitiveness and continuous improvement work is undertaken to coordinate processes and further increase efficiency and delivery qualityLogistics optimization
Efficient and scalable logistics model
Swedol’s logistics department is an important factor in the group’s competitiveness and crucial for delivering in line with our omnichannel concept. The goal of group logistics is to serve all customers in a reliable and efficient way irrespective of sale channel while assuring high availability. The logistics department has three logistics centers, located in Örebro and HisingsBacka in Sweden and Skedsmokorset in Norway, that between them, supply all stores, mail order customers and retailers with products.
Swedol works continuously to optimize logistics flows with the aim of increasing the level of service to customers, boost company profitability and reduce environment impact. A number of new freight procurements were agreed and partnerships with existing transport suppliers expanded during the year, which has led to improvements such as shorter lead times within cross product supply and coordination gains. Increased scope to combine orders is an important step in reducing climate impact of transport. Shipping costs have, however, increased as a consequence of higher market rates. The stock turnover ratio was 4.3 (4.2) which is lower than the target level of 4.5 This stock turnover ratio was adversely affected during the year by growth nitiatives and the establishment of a core range within Workwear and Personal
One important improvement area within logistics is increased digitalization both to make processes and flows internally more efficient and also to boost the customer benefits. One example is the coming implementation of a system where customers are offered several shipping and delivery options. This will include a collect@store service, which results in simplified flows. Reduce environment impact of logistics The group’s negative environment impact is largely a result of carbon dioxide emissions arising from product transport, of which the biggest proportion relates to air and sea freight. Reducing our carbon footprint caused by product shipments is therefore a prioritized issue. Swedol specifies clear demands on transport suppliers and optimizes logistics flows for both inward and outward deliveries. Logistics management have monthly strategy and operations meetings, an ongoing dialog with suppliers and at least one monitoring meeting per year concerning global shipping. Logistics is an important factor in the group’s competitiveness and continuous improvement work is undertaken to coordinate processes and further increase efficiency and delivery quality
To reduce carbon dioxide emissions caused by product transport, Swedol is addressing areas such as improved purchase planning, reducing the amount of air freight and increasing fill capacity in containers that are shipped by sea by coordinating loads of products from different suppliers. In 2018, a switch to rail transport was also introduced which means more environment friendly transport with rail prioritized where possible. Rail transport has the potential to replace air, sea and road transport as a cost effective and less environment harmful alternative.
In addition to the climate impact of carbon dioxide emissions, logistics operations also entail other forms of environment impact via, for example, packaging waste and energy consumption. To reduce such environment impact, these areas are audited for the purposes of monitoring and efficiency improvements. In 2018, the group switched to LED lighting at its logistics centers in Örebro and Hisings Backa, which reduced energy consumption. »
Logistics services in Sweden are concentrated in Örebro
The group took the decision during the year to concentrate all Swedish logistics and processing operations to Örebro effective 2020. The aim of this is to make goods flows more efficient, reduce costs and increase the level of service to customers. The modern logistics center in Örebro has also been the subject of comprehensive efficiency work in recent years and operates at a high level in terms of all internal key figures. The planned expansion includes both warehouse and processing space and will increase the total area of the logistics center to 28,000 sq m, from the current 18,500 sq m. In association with centralizing logistics operations to Örebro, the logistics operations in Hisings Backa will be relocated and this center closed.
The centralization of logistics will increase the degree of automation, concentrate inventory and distribution to the demographic center point of Sweden and create a scalable logistics department that can quickly adapt to changes within both the group and the outside world. The group will have greater scope to improve control of the entire goods flow, lower inventory costs, increased stock turnover ratio and optimize purchasing volumes. Customers will be offered good lead times to all markets in the Nordic and Baltic regions, centralized printing, embroidering and alteration services, plus combined deliveries of orders from group concept brands.