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185 stores and high import volumes led to increased demand for logistical synergies. The solution was to have one sole supplier of logistics – PostNord. Keeping pace with ongoing expansion, new and exciting challenges are ahead for the retail giant, which shows no signs of slowing down.
When you have a goods flow of around 1000 pallets and 100 lorries a day – all requiring smooth processing at optimal economic and environmental capacity – going in and out of a 77,000-square-metre warehouse, this can put a lot of pressure on the logistics. It has to be extremely well planned.
This is the case for retail giant Clas Ohlson, which has sold tools for almost 100 years, and now also sells clever homeware and interior decor products – with the Swedish town of Insjön as the perpetual hub and heart of its operations. This is where the largest of all their 185 stores is located and, most importantly, their vast central warehouse.
Here, all the goods are sent out to all stores and e-commerce customers – and empty boxes and returns come in.
"The more we expanded, the more important it became to identify workable synergies to optimise transportation," says Peter Bergestål, transport manager at Clas Ohlson.
The solution was to use one and the same supplier, PostNord, for both incoming and outgoing streams; and today that is precisely what we do across the whole of the Nordic region.
"It is a huge advantage for us to be able to bring together the whole Nordic region under the same umbrella!" It means we can send out full loads in all directions. We process a lot of returns, both packaging and goods, which can now be transported via return loads within our hub network.
"In addition to the economic advantages and time savings, the synergies are eco-friendly too," explains Peter Bergestål. And the environmental aspect is extremely important to Clas Ohlson.
Another logistical eco commitment is that, as of a couple of months ago, almost all freight transport within Norway is by rail.
"This means we have reduced our CO2 emissions in Norway by just over 30 percent." says Peter Bergestål proudly.
Now "all" that remains to be done is to identify similar solutions in Sweden and Finland, since rail transport is far and away the most eco-friendly alternative. "A major challenge but not an impossible one," says Peter Bergestål.
Adding distribution centres is another nut that must be cracked. The central warehouse at Insjön is reaching its pain threshold in terms of size, despite comprehensive automation and efficiency improvements. One example is the automated pallet cranes that prepare and sort all incoming goods during the night before staff arrive – they also bring orders to the pickers, instead of the other way round.
Nevertheless – it is starting to reach full capacity now. Consequently, plans are being made for the creation of new warehouses. The number of stores is increasing steadily (and, in principle, the stores do not do any warehousing). After the Nordic region, Europe is the next retail market on the giant store chain's radar. "This will mean more stringent requirements, not only for robust and strategically sound and well-planned stock management, but for efficient, eco-friendly distribution systems as well," stresses Peter Bergestål.
Again, he emphasises the advantages of having one and the same supplier for all goods. And not only that, but a supplier who shares the same fundamental values as Clas Ohlson both in relation to logistics and the environment.
"Our collaboration with PostNord gives us major advantages. We're now looking forward to further expanding our operations."
65% of Clas Ohlson's goods arrive from Asia and, after reloading in Rotterdam or Hamburg, they are transported on to the port of Gothenburg.
In Gothenburg, all the goods are reloaded onto trains which take them to the central warehouse in Insjön.
|The goods arriving at Insjön are sorted by country and store and sent out on lorries to strategically located hubs in Sweden, Norway and Finland. From here, the goods are distributed to the stores.
|In Sweden and Finland, store deliveries are made by road, but in Norway all goods for delivery outside the Oslo area are transported by rail to six different rail hubs. From here, the goods are distributed the rest of the way by road.
|Because PostNord is the only supplier, all returns shipments are transported via return loads.