Lars Syberg : “Taming Tigers’ supply chain is a real challenge”
If you’ve not been into a Tiger store yet, it probably won’t be long before you do. The company is growing so fast it’s virtually flying and the supply chain is running on a wing and a prayer. It’s been dubbed the posh pound store in the UK and the Danish company is certainly bringing style to discount shopping across Europe. Driven by an entrepreneurial spirit it continues to open about three stores a week and launches 300 new products per month. Lars Syberg tends to shake things up but this time he was brought in to stabilise the supply chain.
By Helen Armstrong (Supply Chain Movement)
Tiger was founded in 1995 as a Danish discount store. Since then its fun, trendy stores, that sell low-priced, Scandinavian- designed products are springing up in high streets across Europe. It is present in 21 countries, has over 325 stores, and over the last five years sales have grown 40% per year, reaching DKK 1.75 billion (Euro 235 million) last year. By the end of this year it expects to have more than 400 stores, mostly in Europe but also in Japan. The company, founded by Lennart Lajboschitz, who owns 30% of the shares, is on a journey to show the world that this is a successful retail concept and that you can maintain your values as you grow. For Supply Chain director, Lars Syberg it’s a journey at break-neck speed. “Since I joined nine months ago we’ve opened nearly 90 stores and if we execute well we will have opened another 100 stores before 2015.”
What attracted you to Tiger?
“I seem to change jobs every five years and secondly I’d accomplished all I needed to at MöInlycke Healthcare. Coming from a stable Swedish medical devices company to a Danish entrepreneural retail business was about as far apart as it could be. I think I was chosen by MöInlycke because they needed a risk taker who would shake things up and make changes. Here at Tiger I see myself as one of the most process structure orientated people in the company! I accepted the role because I wanted the challenge – at the moment the company is growing at 50% per year. I also joined because I like its special company culture. Tiger is a family business with non-corporate quirky partners. It wants to make a difference. It operates very intuitively; we move as fast as possible and at end of year we repair the engine. That’s why I’m here, to stabilise the supply chain. It’s improving all the time although I think it will take several years before we are fully stabilised in Europe.”
And how are you going to do that?
“I’ve been setting up a simple S&OP process that involves the expansion, procurement, finance and supply chain departments. It creates commitment and everyone realises what’s going on. Previously the supply chain was just following sales and there was little communication within the value chain. Changes in demand and lack of visibility in logistics could easily create a bottleneck.
Our monthly S&OP chats have already improved transparency and stabilised the situation. It’s about making promises and executing. Once I’ve created a sound agile foundation I can start to optimise. First I have to stabilise daily production otherwise the products won’t reach the shops.”
What are your direct responsibilities?
“I’m responsible for the end-to-end supply chain. I’m directly involved with inbound, outbound and warehousing as well as sourcing, most of which is done in the Far East. I have a major, but not direct, responsibility for purchasing. The supply chain department has around 20 ftes; most of our operations is outsourced to our logistics partners.”
What is the main challenge created by Tiger’s phenomenal speed of growth?
“We are growing so fast that there are many things to fix. I need to reduce lead-time, improve forecasting, sourcing and risk assessment and I need to model all these things into a system. When I started we spent a lot of time fine-tuning the supply chain strategy. We now know where we have to prioritise but we are flying so we have to take risks.
Also, the supply chain and sales have different objectives so we need to align. We are going through a steep learning curve to find the right balance. My performance is judged on the ability to deliver the right product at the right time to the right shop at the right cost. … there are lots of potential conflicts so it’s important to focus on the top priorities. At the moment we want to achieve minimal cost per unit by maximising order quantity.
80% of our products are manufactured in China and we have a lead-time of six to eight months. On top of that forecasting is still very much a big challenge. I am currently trying to convince everyone that we need a system so that we can improve forecasting within the chain and in future focus on reducing lead time.”