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Johanna Småros, Michael Falck and Mikko Kärkkäinen are School of Science’s alumni of the year 2023

The trio have grown software company Relex into a billion-dollar unicorn in just under two decades
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Johanna Småros, Mikko Kärkkäinen and Michael Falck. Image: Niko Nakari

Johanna SmårosMichael Falck and Mikko Kärkkäinen are the School of Science’s Alumni of the Year. The trio, all graduates of the Department of Industrial Engineering and Management, founded in 2005 Relex Solutions, a software company that has since grown into a €5 billion unicorn providing supply chain and retail planning solutions to retailers, distributors and manufacturers of consumer goods.

The company has its roots in the Logistics research group at the department. Relex uses artificial intelligence based technology to improve retail and supply chain planning and reduce waste. It has raised the largest single round of funding in Finland, €500 million, from venture capitalists.

Småros, Falck and Kärkkäinen have also set up a €100 million charitable foundation to protect the environment and mitigate climate change, reduce poverty and inequality and prevent the marginalisation of children and young people.

Johanna Småros: Growth is good for team spirit

Johanna Småros ended up at Aalto University’s predecessor, the Helsinki University of Technology, at the suggestion of her brother who studied electrical engineering. During her studies at the Department of Industrial Engineering and Management, she was particularly enthusiastic about projects that were done for companies.

‘These projects made it very clear that there are always many more variables to consider in practice than in theoretical frameworks,’ she says.

Småros did her master’s thesis and later PhD dissertation as part of the Logistics research group, where Falck and Kärkkäinen were also working. In the course of the research, the trio realised how many shortcomings there were in retail planning. In frontrunner companies, store replenishment was automated for easy, shelf-stable products, but perishable foodstuffs as well as promotional and seasonal products were ordered manually from the store.

‘We used real sales data to see how we could forecast and replenish, for example, fresh products, and ran simulations,’ Småros explains.

However, the road from research results to real-life practice seemed awfully long. Gradually, the idea of starting their own business took root.

That decision proved a good one.

In just a few decades, Relex Solutions has grown into a global workplace of 1,800 people, with some of the world's largest retail chains as clients. Småros describes their position, especially in their home market of Europe, as very strong, and the growth rate in the US, which is typically a challenging market for European companies, is fast, with a number of high-profile customers. The fastest growth at the moment is in the newer markets of Asia and the Pacific.

According to Småros, a growth company is a good environment for harbouring great team spirit.

'If a company is very stagnant, people get new opportunities by waiting for someone else to leave. That can create unhealthy competition. In a growth mode, on the other hand, it's clear to everyone that when you work together, you grow faster and new opportunities will open up for everyone. It's really healthy for the team spirit, even if there are always growing pains associated with it.’

Relex's next focus will be on linking the increasingly diverse retail planning processes, and on planning across the supply chain, from consumer demand to manufacturing and procurement. The challenges in supply chains in recent years, combined with the high volatility of demand, have made the field much more dynamic, and better interplay between supply chain, operations and commercial planning has become increasingly important. This is where Småros believes Relex has much to contribute.

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