retail technology

Sale Instead of Administration

Kaiser's Tengelmann replaces the eight heterogeneous existing systems with an 'intelligent' merchandise management system that controls all order and logistics processes in a single system. The company is using a standard software solution and the new system is currently being rolled out.

In 2003, Kaiser's Tengelmann realized that the IT systems used so far would not suit the company's needs in the future, and therefore would not offer the customers an ideal product range and optimal service. "A future-oriented IT solution had to be found", says Dieter Beye, IT manager. After a considerable selection procedure, Kaiser's Tengelmann opted for the merchandise management solution 'Compex Commerce' of the Compex Systemhaus GmbH Heidelberg. It is a standard software solution that can be customized to individual processes. It covers all processes, ranging from category management, MRP, purchase and logistics to cash management. It provides transparency beyond all departments and steps, reduces and eliminates paperwork, and offers an article-based inventory management and automatic MRP. Kaiser's Tengelmann and its system partner Compex realized that a close communication between all departments was and still is a prerequisite for the project's success. Starting point was the analysis of the present processes. On the basis of the results, the single departments' employees defined the target processes. The analysis was based on a plan developed by Compex Systemhaus. This plan is called '2BEE concept' ('Best Enterprise Engineering' and 'Business Engineering Environment') and the documentation comprises some 17,000 pages. In the implementation phase, the single departments first checked the single new processes and then tested them for possible interference with the existing system architecture. Function and integration tests followed. In doing so, the interaction between the cash management system, the Data Warehouse, the archive system, and the shelf planning system was checked. The single departments of Kaiser's Tengelmann were working closely together with Compex. Afterwards, 'Compex Commerce' was gradually activated in the headquarters, stores, warehouses and delivery service. At the same time, some KT employees were trained as 'super users' by Compex. The task of these so-called 'rollout managers' is to assist the employees during the system's rollout and to train them.

Automatic MRP

The rollout phase is in full swing. 315 stores use 'Compex Commerce' for managing the fruit and vegetable ranges. Furthermore, one Kaiser's Tengelmann store in Hofheim has already concluded the rollout phase for the complete range. On the central warehouse level, the location in Nieder-Olm has already completed the rollout. On three further warehouse locations, the rollout is to be carried out for the warehouse range sections dry goods/fast moving consumer goods. Once the project is finished, some 15,000 Kaiser's Tengelmann employees are supposed to work with the new software. The software solution will maintain 100,000 articles for 700 stores. 500,000 order items per day will then be processed in a central warehouse. The introduction of the new solution provides Kaiser's Tengelmann with an automatic MRP on the store level. The software automatically creates order proposals that the store manager can either confirm or change. Once the software will have reached a high forecast quality for a sub-range, it is set to automatic MRP. "With the help of the system we want to provide goods in the right quantity, in the right place, at the right time, and at optimal costs; even though the demand depends on weekdays, seasons, school holidays and other factors", says Lutz Endrikat, head of the Organization Department at Kaiser's Tengelmann. "In doing so, we plan to enhance our product presence, improve the inventory planning and reduce capital lockup." Also in the central warehouse, Kaiser's Tengelmann is working with the automatic MRP. Based on stochastic forecast procedures, the Compex solution avoids stock shortfalls and thus unnecessary capital lockup. With the new solution, Kaiser's Tengelmann intends to rearrange its range structure and purchase in a more sales-oriented way. The article-based inventory management in all stores and warehouses will be useful on that account.

Once the rollout is concluded, Kaiser's Tengelmann will take a step forward in terms of avoiding paperwork, since a great deal of the paperwork will be replaced by online communication. 1,500 mobile data collecting devices, connected via WLAN, will ensure the communication and data transfer from and to the stores. This alone saves a lot of paper documents.

All business processes are defined as workflows in the system. The employees' workload and the respective tasks are displayed in the automatic follow-up. The introduction of the Compex merchandise management solution and the optimization of processes allowed Kaiser's Tengelmann to reduce administrative tasks. The time saved is to be dedicated to the Kaiser's Tengelmann customers. "Sale instead of administration is our slogan", concludes IT manager Dieter Beye.