Data – To secure business, we must prepare for crisis

The coronavirus crisis, crisis in Ukraine, energy crisis, climate crisis… And the list of crises doesn’t end here. When facing a crisis, like we are unfortunately almost used to by now, it is crucial to be prepared. Like I mentioned in my last blog, our conception in the 1940s wasn’t an easy time period. Starting a business during a war leaves a mark on the DNA of the company, and one of its traits is being prepared.

Our motto is old but gold

An example on how this is illustrated in our daily tasks is a motto we use to define requirements for a project: a good man always wears a belt and suspenders – if the other fails, you’ll still have your pants on. This means that we always think of an alternative method for succeeding if something fails. And we are not caught with our pants down.

Impressive, controversial, yet beneficial stock

Another tangible method for being prepared is the raw material stock we keep. According to modern business principles, maintaining a warehouse is always unwanted and wastes resources, but still, we do it.  And due to recent events in the global supply chain we are not getting rid of it anytime soon.

Stocking over 3000 materials of course places a burden on our business but also has its benefits. We can almost always respond to the urgent needs of our customers, within 24 hours if needed. And when the order backlog is measured in weeks and the lead time for materials in months, it is practically impossible to operate without buffer.

Optimizing stock in the long-term with data

Our long-term goal is of course to reduce and optimize our stock levels, but due to the supply problems we have had to make strategic purchases to secure our operations. This has led to an increase in stock value, contrary to our goal, but has given us more opportunities in the short term. Despite recent events, we are continuously developing our purchasing procedures to increase efficiency.

The latest development project that was finished in the beginning of November 2022 researched the possibilities of data-based decision making in our purchasing. The limited PoC project dived into our existing data from different sources and produced a forecasting model of material usage and customer behavior. The results were promising considering the missing links in data and rough estimates we had to make to get things going.

Unexpected useful results that need refining

We also found unexpected results such as a data-based model of the similarities and correlations between different customers. This can be utilized for the mutual benefit of both us and our customers by streamlining our sales and production processes for better service and reliability. The shortcomings in the data are also taken into account in the specification of the approaching business software updates.

In the short term, I don’t expect anything disrupting from the model, as it is a common GiGo (garbage in, garbage out) model. We must work on our historical data and try to enhance and enrich it before we can move forwards with a production version. The opportunities of data-based estimates are nevertheless endless and therefore I am eagerly waiting for the long-term benefits of data in supplying you Smarter Sealing for a Safer Tomorrow more reliably.