Unused potential for Nordic companies – 23 billion euros tied up in unnecessary inventory
The 400 largest companies in the Nordics tie up unnecessary capital in goods equivalent to 23 billion euros which occupy a total of 8 million square meters of unnecessary storage space, according to the new report "The Unnecessary Report 2024" from Optilon.
Efficient inventory management and optimization can have a significant impact on a company’s profitability. According to the "The Unnecessary Report 2024" from Optilon, 8 million square meters of warehouse space is surplus, equivalent to 31,000 tennis courts. By implementing smarter supply chain management and optimization, companies can free up capital and reduce inventory and distribution costs. On average, the largest companies in the Nordics could free up around 58 million euros, while becoming more sustainable and efficient.
— An effective inventory management system optimizes the flow of materials across the entire supply chain. By strategically forecasting, planning, and managing their processes, companies can avoid unnecessary production, transportation, inventory, and waste – which reduces both their environmental impact and costs, says Nathalie Johansson, Senior Supply Chain Specialist at Optilon.
The report shows that inefficiency varies between Nordic countries and sectors. Sweden has the greatest economic potential, with 8.1 billion euros to release, equivalent to 1.5% of GDP. The Tech & Life Science sector is the most inefficient, with 33% of the inventory classified as unnecessary. Despite some progress, unnecessary inventory holding has increased by 16% since 2021, highlighting the need for action. Optimized logistics can also reduce carbon emissions and enable investments in sustainable initiatives.
— Integrating sustainability into supply chain strategies is crucial, not only for the environment but also to ensure that companies remain competitive in a world where consumer demand for sustainable products is stronger than ever, says Franz Rothschild, Senior Supply Chain & Sustainability Specialist at Optilon.
Download the report here: https://optilon.com/the-unnecessary-report-2024/
About Optilon: Optilon is a leading and independent supply chain partner with over 20 years of experience. The company provides comprehensive solutions covering strategy, tactics, and operations. Their expertise lies in tailoring processes to meet clients' unique needs and delivering optimal solutions through extensive industry knowledge. To date, Optilon has successfully completed over 1,000 projects for more than 200 clients. Learn more at www.optilon.com.
About the Report: The report aims not to highlight an exact figure, but to demonstrate the untapped potential that Nordic companies possess. The 100 largest companies in Sweden, Denmark, Norway, and Finland are the basis for the report. Since these 400 companies have very large turnovers and maintain large inventories, the nominal total effect is significant. It should be emphasized that a large proportion of these companies' operations take place outside the Nordic region, and many of these companies already use efficient inventory management to some extent. Companies within the top 100 in each country whose business is of low relevance to inventory management have been excluded. ** The data primarily includes subsidiaries due to reporting standards and data availability. *** Assumptions in the report are based on information from customers and industry experts. Conservative estimates have been used to avoid overestimating the impact of effective inventory management and optimization
