Nespresso Iceland brews up big changes to their supply chain with AGR

Nespresso Iceland, a part of the global leader in coffee products, faced challenges in maintaining optimal stock levels across its various outlets. To address these challenges, Nespresso Iceland partnered with AGR, a company specializing in advanced inventory management solutions. Þorvaldur, Nespresso Iceland’s Head of IT and Product Management, and Arna, AGR user and Data Analyst at Nespresso Iceland, shared their experiences with AGR from implementation to expansion.

Background

Nespresso, a subsidiary of Nestlé, has established itself as a leader in coffee capsules, machines and accessories. Operating globally, Nespresso delivers a unique coffee experience through its extensive product line and is a premier brand in the coffee industry. In Iceland, Nespresso's operations include B2B, retail and e-commerce channels, which require meticulous coordination and management to ensure a seamless customer experience.

Implementation process

The implementation of AGR's system was a phased process:

1. Initial Setup: AGR conducted an initial assessment to understand Nespresso's specific needs and tailored the system accordingly. This involved configuring the system to handle Nespresso's unique product categories and inventory workflows.

2. Integration with ERP: The AGR system was integrated with Nespresso's ERP systems in both Iceland and Finland. This integration was completed in a matter of days, ensuring minimal disruption to daily operations.

3. Training and Onboarding: AGR provided comprehensive training to Nespresso's staff, including the head of IT and product management and data analysts, to ensure they were proficient in using the new system.

4. Testing and Refinement: Before full deployment, the system was tested extensively to identify and resolve any issues. Feedback from Nespresso's team was incorporated to fine-tune the system.

5. Full Deployment: The system was rolled out across all channels, including retail stores, e-commerce, and B2B operations.

The results

The implementation of AGR's inventory management system brought several significant benefits:

  • Reduced Stockouts: The advanced forecasting and automated ordering features significantly reduced the incidence of stockouts, ensuring that products were consistently available to customers.
  • Balanced Inventory Levels: The system helped balance inventory levels across different channels, reducing overstock situations and optimizing storage costs.
  • Improved Efficiency: The time required to manage inventory was drastically reduced, allowing staff to focus on other critical tasks. The system's real-time data updates also improved decision-making.
  • Enhanced Data Visibility: AGR's system provided a clear, comprehensive view of inventory levels, trends, and performance metrics, enabling data-driven decisions and better strategic planning.
  • Scalability: The successful integration and performance in Iceland prompted Nespresso to expand the use of AGR's system to its operations in Finland, with plans for further expansion.

"The big picture you get from AGR is really good…we’re confident in making the order correctly."

Þorvaldur Breki Böðvarsson, Head of IT, Analytics and Product Management, Nespresso Iceland

Supply Chain Challenge

Before collaborating with AGR, Nespresso Iceland managed its inventory using a combination of ERP systems and manual processes, primarily involving extensive Excel sheets. This approach was cumbersome and prone to occasional errors, leading to more frequent stockouts and overstock situations. The complexity increased with the need to balance inventory across multiple channels, including retail stores, e-commerce platforms, and B2B operations. The lack of a streamlined system often resulted in inefficiencies, impacting customer satisfaction and operational costs.

Need for AGR

The limitations of their existing inventory management approach prompted Nespresso Iceland to seek a more sophisticated solution. The primary goals were to reduce stockouts, balance inventory levels, and streamline the ordering process. AGR's inventory management system offered the potential to address these needs through advanced forecasting, automated ordering, and real-time data integration with their existing ERP systems.

The collaboration between Nespresso Iceland and AGR has proven to be a strategic success. By addressing critical inventory management challenges, AGR's system has not only streamlined operations but also enhanced customer satisfaction and operational efficiency. As Nespresso continues to grow and innovate, the partnership with AGR will play a crucial role in supporting its supply chain strategy and achieving business objectives.