Rusta began modestly in the early 1980s and since then has grown exponentially to become a Swedish household name with annual revenues approaching $400 million. It has reached the point where it can now become a serious player in the European mixed retail market, and it is ensuring it has solid foundations by investing millions of dollars in upgrading its facilities and IT infrastructure.
Rusta was founded on the idea that it is always possible to do something better. Its basic strategy is to continuously grow while building on its strengths. The company continues to focus on its motto of “giving people great value for money.” It is achieving this objective through opening new stores, improving and developing its existing offerings, as well as continuing to improve purchasing and product supply functions.
Operations
While Supply Chain Director Anders Kind noted that Rusta still has many things to improve on, he was proud to recognise that the company had thorough coverage in Sweden, with 78 stores fed by 11 warehouses and distribution centres, including one situated on its supplier side in China. Through various partnerships, the company handles distribution between the Far East and Sweden but also a lot of purchase in Europe. It also has seven stores in neighbouring Norway, where its reputation for delivering value for money in the form of quality homeware is steadily growing.
Kind noted that Rusta was keen to continue its strong growth and was more than ready to ensure that it had the right people directing its operations. He said: “About three years ago the founders realised Rusta needed to refresh the company with new experiences while still building on old values. That is why I was recruited, alongside a new CEO as well as a new Marketing, Assortment and Quality Manager.”
For Rusta, doing things in-house isn’t just simply down to circumstances; it is a mind-set that pervades the whole organisation and has enabled it to be in command of its own destiny. Kind said: “We don’t outsource anything; everything is done in house. We take control of the entire value chain so that we can know for sure we will be more successful than our competitors.
“We go to the manufacturer and see exactly how they produce our products, we do inspections on almost all of our Far East production to make sure the quality is always to our own standards and expectations.
Kind was also keen to explain how the company was able to deliver its guiding principle “value for money” across a massive range of high quality products, he said: “In the past we purchased products from China and imported them straight to our stores in Sweden. But we have added a lot of steps in order to drive the price down for customers and also increase the quality and value for money of our products. We have seen over the years that our customers are increasingly happy with what they buy. When it comes to supply chain we focus on efficient logistics that also contributes to give our customers more value for money.”
Accommodating growth
Kind said that it was usual for Rusta to grow by almost 15 to 20 percent each year and also noted that for many years the company was opening a new store almost every month; it is a trend that he confidently expects to continue.
Ever conscious of the continuously increasing demand for its product lines (not to mention preparing to connect its brand with new markets) the company has committed to supporting these efforts with a unique warehouse. Kind explained: “We are currently building the biggest warehouse in Sweden, in Norrkoping, which is about two hours’ drive from Stockholm. The investment of over SEK 500 Million will be 63,700 sqm, and able to house around 135,000 pallets and about 60,000 will be totally automated. DC will be functional from September 2015 and fully operational in March 2016. This will enable us to go from 11 warehouses to just one and will of save us both money and time, and will be more efficient in the long run through centralising our operations.
“At the same time we are also upgrading our WMS, called EPIX, to be able to monitor our warehouse growth.”
“We are also delivering a new ERP system and vendor management system. Because we are expanding territorially we had to change to a new system called IFS which can handle more than one country at a time. We needed to do it because we are growing outside of Sweden and the old one could only handle a single country and a single currency.”
Talent Management
Rusta faces the unique challenge of managing a talent pool that not only covers its headquarters, distribution centres and retail outlets but also extending as far as its producers in the Far East. Kind said: “We always strive to have the best employees and to develop them. If you look at our history HR was a bit more ad hoc, we simply hired people and tried to do good by them. We now have a modern, professional HR department and have brought in a new HR director last year. He has structured the business to be more professional when it comes to hiring new staff and we now also focus more on helping to develop our employees.
“When people start working for Rusta, sure they learn our history but also our important core values, which comprise: courage, commitment, simplicity and togetherness.
“We do a lot of internal learning; we learn from ourselves and really try to make individuals grow within the company and with each other and that’s the most important thing for us.
“From my experience working with other retail companies, you simply cannot compare them to Rusta; everyone is so devoted to their work and everybody is committed to the success of the company, it is like a big family.”
Rusta has recognised where its strengths lie in its supply chain and has projected this successful model into a clear and tangible vision for the future, backing it up with a solid level of capital and a focused, forward thinking management team. The company has lived with strong growth for much of its lifetime but has never grown complacent and is set to propagate its successful model across the European continent.