How Alumeco transformed planning with integrated business planning

In 2019, Alumeco, a major company in the Nordic aluminum industry, began seeking a solution to improve their planning. A volatile demand, changing markets conditions and constantly development in product portfolio and services has made their internal planning process more demanding. They simply needed a better overview and a more data driven approach to planning.

At first, Alumeco’s focus was narrowly directed towards inventory management. However, as they delved deeper into their requirements, they recognized the need for a more comprehensive overview of their planning across the organization, and to work towards integrated business planning.  IBP integrates forecasting, inventory management, and processes across the entire organization.

“We couldn’t tell if we thought the market was going to pick up and we needed to acquire more if we only looked at individual, historical product figures. It was hard to apply it to our operational purchases and see results. That’s where it began. I wanted to forecast, and purchase based on the forecast rather than short-term historical data,” says Dennis Thomsen, Group Logistics Director at Alumeco.

In the vendor selection process Alumeco’s needs aligned seamlessly with Perito Consulting’s area of expertise in IBP, making Perito a natural partner.

”Perito conducted a pre-study on our business which gave me the numbers I needed to present the business case to the internal stakeholders. After that it was quite easy to choose Perito as our IBP partner,” says Thomsen.

One of the deciding factors was Perito’s partnership model, which offer to assist with high-frequency analytical tasks that require special statistical skills. Compared to conventional solutions, where the company is expected to manage all aspects of the day-to-day planning, Perito’s partner approach free up a significant amount of time and avoid hiring new analytical staff.

The implementation of Perito’s IBP solution was not without its challenges. As the COVID-19 pandemic swept across the globe, sales at Alumeco skyrocketed in certain product groups and it quickly become much harder to rely on the past for predicting the future.

“For some of our products, demand increased by more than 100% in a single month. I’ve never experienced anything like it in my 16 years at Alumeco,” Thomsen says.

As a result, Alumeco began holding extended monthly planning meetings, where stakeholders from all levels of the organization could share their insights and interpretations of the data. At these meetings, Alumeco planners used the Perito IBP system to override the statistical forecast in certain areas, incorporating market intelligence to create more accurate predictions.

“The ability to visualize forecast changes in real-time through the Perito system has proven to be extremely valuable during our planning meetings. By adjusting various factors during these meetings and immediately seeing the corresponding results, we have been able to build a stronger sense of commitment and trust in the accuracy of our forecasts among all participants.”

The process of going towards data driven planning was not without its fair share of hurdles. People see the world in different ways, have different personal preferences so implementing data-driven decision-making requires careful attention to transformational leadership principles.

“People are simply not as data-driven as you might think, and different people view the world in different ways, no-matter what the numbers tell you. That’s why visualising the data has been important. It opens the door for discussing different interpretations and makes it much easier to work with,” Thomsen explains.

Today, Alumeco’s planning meetings take only 20 minutes, thanks to the increased accuracy of their statistical forecasts.

Alumeco’s commitment to transformational leadership principles and collaborative planning were essential to the successful outcome. By continuing to refine their IBP system and automate processes, Alumeco is poised to become a European leader in the aluminum industry.

Alumeco is an international trading company founded in 1983 with headquarters in Odense, Denmark. Alumeco offers solutions in aluminium, stainless steel, copper, bronze, and brass for the metal-consuming industries.

The Alumeco Group employs nearly 1,000 people across 33 subsidiaries and offices in Europe and China. About a third of the employees are based in Denmark.

Visit Alumeco's website.