Flexible supply chain

To be competitive in the market must be able to quickly respond to changes in demand. Flexibility in manufacturing results in higher product availability, lower inventory levels and thus lower costs.

The business is characterized by large seasonal variations, as the season for lawn and garden products is relatively short, with the peak season in spring and summer. Weather conditions can further enhance these variations. The need for flexibility and short lead times has led to the majority of production resources is close to the consumers in the main markets in Europe and North America.

Optimized production structure

To increase efficiency and flexibility in production, the North American production is concentrated on three major facilities, one for handheld, one for ride-on and one for walk-behind products. In Europe, a new production facility was established in Poland a few years ago. The opportunities to further improve the manufacturing process are potentially in Europe and Asia. Inventory levels globally within the Group are further reviewed in order to optimize inventory levels, transportation and storage costs.

More efficient purchasing contributes to lower purchasing costs

Purchased components is the biggest cost item for the Group, so there is significant potential to lower cost of direct materials through improved purchasing procedures. To achieve this, the number of product platforms and product variants are reduced, thereby increasing economies of scale. It is also necessary for the purchasing and product development departments to work together in the early product development process to promote manufacturing-friendly design and thus gain cost advantages.

Priorities

  • Continued improvements in conversion and logistics cost.
  • Continued optimization of product availability and inventory levels.
  • Significant complexity and component cost reduction.

 

Facts

  • The number of warehouses was reduced from 70 to 41 between 2008 and 2013.
  • Between 2008 and 2013, the number of suppliers was reduced from 3,100 to 2,300.