Process optimization is indispensable for the competitive success of retail companies. To make its order processes more efficient, Swiss company Migros is leveraging an SAP-certified software solution for the optimization of its logistics processes.
For example, an application of said software for purchasing creates advantages by bundling orders, monitoring restrictions for optimization on load carriers, and suggesting order quantities based on range. This supports sustainable media continuity and increases process optimization as well as reliability in demand planning. Combining these advantages with modules for daily operations and controlling, retailer Migros thus leverages a high-performance software tool for an efficient supply chain.
Migros is an umbrella term referring to various cooperatives, incorporated companies and foundations, often collectively called the Migros Community. The Migros-Genossenschafts-Bund (MGB; Migros Cooperative Alliance) represents the group. Migros is the largest retail company in Switzerland.
The centrally organized merchandise management system, including a fulfillment center and several distribution centers, enables Migros to quickly deliver goods to more than 1,000 sales outlets. To achieve this, ordering processes must be as efficient as possible in order to stay competitive as a stationary retailer, especially in view of the growing e-commerce sector.
Swiss retailer Migros has managed to stay competitive as stationary retail chain, also in part thanks to the GIB suite. The suite is certified by SAP and supports all logistics processes in SAP without additional interfaces, ensuring greater transparency and efficiency. “The GIB suite has allowed us to create a level of transparency that has received extremely positive feedback from demand planners, administrators and managers alike,” says Urs Schwarzenbach, Head of Near/Non Food Management Support at Migros.
Integrated in the SAP standard
Schwarzenbach supported the GIB suite implementation in fall 2014. The first applications to be implemented at Migros were “Operations” for, as the name suggests, daily operations; as well as “Buying” for order processes.
“Over the last few years, this has enabled us to massively increase efficiency when it comes to demand assessment,” explains Schwarzenbach. “Furthermore, we were able to increase the availability in our distribution centers by reducing storage volumes.” Migros is therefore extremely satisfied with the solution as well as the provider.
“We first came in contact with GIB during a seminar,” recalls Wieland Caviezel, SAP consultant at Migros. “Because of performance reasons, we needed a new supply chain solution. Our legacy software was just not up to par; individualizations were laborious, and it could not process enough data. After we consulted the German-speaking user group DSAG on the matter, it became clear that the GIB suite was the only viable SAP-based solution concerning supply chain processes.”
Migros’ requirements called for a solution integrated in the SAP standard to guarantee media continuity, and a tool to increase the performance of the merchandise management disposition which offers the possibility of using already existing SAP master data and parameters.
“We have achieved all the main goals we set in project planning, especially regarding increasing efficiency in merchandise planning (procurement, demand planning) and reducing storage costs,” says Schwarzenbach. “The effects of increased availability in our distribution centers due to reduced storage volumes can be felt throughout the organization.”
Migros was also able to optimize inventory and order quantities. It is now able to load trucks and containers more efficiently by filling in the correct quantities (according to range or space). Furthermore, the problem of slow-moving goods in warehouses can often be prevented, which was most evident in clothing and household goods, categories almost notorious for slow-moving items.
However, one of the biggest advantages of the tool is the increase in transparency. While demand planners might have previously maintained master data in their own Excel lists, the administration of master data in the SAP system now ensures high levels of transparency. This makes e.g. stand-ins significantly easier. Furthermore, disposition decisions are easier to make and better to track thanks to the tool guaranteeing most recent master data and key performance indicators.
User-friendliness shortens training time
A project team consisting of ten GIB and Migros employees implemented the GIB suite with various Migros-specific customizations, such as new riders, ad hoc formulas, and extensions. The implementation went smoothly and was accompanied by two two-hour training sessions with key users.
“The project members created the training documents themselves. The introduction therefore went very well, and the suite could be used after just a few hours of training,” says Schwarzenbach. Migros can’t imagine a future without GIB’s software solutions.
According to Migros, GIB suite’s biggest advantages are effectiveness – in the sense that it is doing its job very successfully – and optimization through comprehensive information, range and supply chain optimization, and displaying key figures from different perspectives (e.g. sales/forecasts).
“Especially the operations application for daily processes, such as the detection of missing parts, complaints about deliveries, master data management and more, as well as the buying application for demand assessment and order processing offer us the greatest advantages in our day-to-day business,” adds Schwarzenbach.
Increased efficiency and transparency mean GIB saves Migros time; time that the company can invest in other important tasks and projects. Migros is already planning further projects together with GIB, as it has already implemented a number of change requests with the IT service provider and therefore feels confident for the future.
“We are certain that S/4 Hana will offer us a great deal of potential for future cooperation with GIB,” says Caviezel. “The operational benefits of the GIB suite are so great in the R/3 world that working in the new S/4 environment without the GIB solution would be unthinkable.”