Bed manufacturer Auping has been around for more than 130 years and is strikingly innovative. By focusing on sustainability and bed leasing in addition to design and high quality, Auping is shaking up the industry. To support this strategy, the company is switching to Board for its planning processes.
Performance management solution for S&OP and forecasting.
Auping produces all of its beds itself in a factory in the Netherlands. That has an impact on the requirements for controls. "From Auping's point of view, we are both a retailer and a factory. As a retailer you are often flexible, but we also have to take into account the factory. Our goal is a well discussed plan, where everyone knows what the trade-offs are. We want better information, and that with less effort," Paul Platenkamp of Koninklijke Auping BV explains the reason for switching to Board. The move to a new Performance Management solution at Auping seems to tie in directly with the growth ambition.
From sales planning to workforce planning in the factory
The ambition is to be able to plan all the way from the budget model to sales and production, including the number of people needed in the factory. Paul therefore envisions several phases: "If you look at Board as a platform, I still have a lot of ideas. The first phase is all about putting down the sales forecast, cost budgets and the P&L. In the next phase, we want to set up Sales & Operations Planning. Then, from finance, we want to automate cash flow and liquidity planning. Ultimately, we want to cluster as much as possible into one system."
"Our goal is a well-discussed plan, where everyone knows what the trade-offs are. We want better information, and with less effort."
Strategy based on sustainability
This ambition fits into Auping's growth strategy, in which the bed manufacturer is fully committed to sustainability. "Mattresses are very polluting for the environment. That's why we have now developed a fully circular mattress," Paul says. The company is also looking critically at environmentally damaging materials. "For example, we stopped using high gloss on the beds. A tough decision if you look at it from a profit perspective, but we think it's too damaging to the environment."
The move to circular mattresses is a substantial change for the company. "Of our business, 60% is going to a different revenue model: selling and or leasing circular mattresses. This requires considerable investment at first, but in time we expect to earn this back, of course. Our sustainable mission is instilled from an idealistic conviction, but of course we also want to make a profit."
This is also going to bring big changes for the entire bed industry. "If you look at the market, we are the right company to do this. We are the opinion leader," Paul states. For example, Auping recently won an award for the world's first completely circular mattress. In doing so, Auping is critical, Paul explains, "It has to continue to look luxurious and, of course, lie nicely."
Calculating circular business cases
This strategy does demand something of finance. "As a controller, these are difficult business cases to calculate through. On an existing mattress you earn more. On a circular mattress, you only get the raw materials back for free after four to five years. At that point you start earning more on it again," Paul explains.
There is also a tension between the different interests: "Sales wants the highest sales next year, marketing wants that in two years, and from management you want continuity. From finance, we calculate all the business cases, and we have to hit the brakes every now and then," Paul continues.
The new planning process is going to help with that. "You have to follow these developments very closely from finance. You need good systems for that," Paul believes. "With a good Performance Management solution at Auping, you can form the link between the different departments within your company," agrees Bart van Dillewijn, project manager from Finext.
Choice of Board as new Performance Management solution at Auping
Paul is enthusiastic about Board. "It is a tool of today, especially because of the functionalities in the screens. For example, anyone can increase all the fields themselves by a few percent to see the effect. So you can easily calculate the different scenarios and put them side by side."
The choice of Board was almost unanimous. "With us, everyone came to the conclusion that this platform is the best solution for our problem definition. We can put down a basic version of the budget, on which the category managers can make their adjustments. Then the budget goes to all the markets, which also make their adjustments before the final version of the budget is set. All these versions are preserved, as is the comments box where you can see why we chose something."
Choosing Finext's co-build approach
The next phases will be initiated from a "co-build" approach. "Finext helped us get from the big design to a prototype. The next phase we want to pick up 60-70% ourselves, under Finext's guidance." Bart: "Because Board is based on low coding, the platform is very suitable for co-build."
"Soon everyone will be able to focus on the job they are good at. Then the category managers and marketing people themselves will be at the wheel."
When setting up a prototype for a planning process, the level of detail is often a topic of discussion. Such is the case at Auping. "The possibilities are countless, you can set up the platform the way you want. In that, you have to make clear choices. Take the mattresses, they come in different widths and lengths. What details do you really need to make planning decisions? The system can handle a lot, but you don't want to budget on every bed leg," says Robbin van Wijk. As a consultant from Finext, Robbin is closely involved in the implementation of Board at Auping.
Transformation of the Finance function with Board
The new performance management solution at Auping is going to change the role of finance, Paul expects. "Before, we used to come and ask everyone after Q1 where they stand and what they expect. Then you keep people away from their work. Now that this becomes easier, everyone can focus on the job they're good at. Soon the category managers and marketing people will be at the wheel themselves."
Paul also expects positive changes within the rest of the organization: "Auping wants to accelerate as a company and therefore must be able to adjust plans on a continuous basis. And we just need this technology for that."
