Massive efficiency gains in the determination of demand

Thus, an application of the software for purchasing provides advantages through bundling of orders, restriction monitoring for optimization on load carriers as well as through range-oriented order quantity suggestions.

It thus prevents expensive media breaks and increases process optimization and reliability in demand planning. Together with modules for day-to-day operations and controlling, the Migros retail chain now has a high-performance software tool for an efficient supply chain.

Migros is a conglomerate of various cooperatives, stock corporations and foundations, which collectively refer to themselves as the "Migros Community".

The Group is represented externally by the Federation of Migros Cooperatives (MGB). In Switzerland, Migros is the largest retail company.

The centrally organized merchandise management system (ZWW), with a fulfillment center and via several distribution centers, enables rapid delivery of goods to the more than 1,000 sales outlets.

To achieve this, the ordering processes must be as efficient as possible in order to remain competitive as a stationary retailer, especially in view of increasing e-commerce business.

The Swiss retail chain Migros succeeds in this not least with the help of the GIB Suite. The suite is certified by SAP and provides interface-free support for all logistics processes in SAP, where it ensures greater transparency and efficiency.

"With the GIB suite, we were able to create a level of transparency that Demand Planner, clerks and executives received extremely positively"

says Urs Schwarzenbach, Directorate Support Manager Near/Non Food at Migros.

Solution integrated in SAP standard

Schwarzenbach supported the introduction of the GIB Suite in the fall of 2014. Initially, the applications "Operations" for the operative day-to-day business and "Buying" for ordering processes were implemented at the main plant; just a few months later, "Controlling" was added to the solution.

GIB even developed the "Buying" application specifically in collaboration with Migros.

"It has enabled us to achieve massive efficiencies in demand assessment and mutual substitution"

Schwarzenbach explains.

"In addition, we were able to achieve an increase in availability at distribution centers through a simultaneous reduction in storage volumes."

Accordingly, the MBG is very satisfied with both the solution and the solution provider.

"We had made our first contacts with GIB through a seminar".

recalls Wieland Caviezel, SAP consultant at Migros.

"Since we needed a new supply chain solution for performance reasons and, moreover, the old software was not customizable enough and could process too little data, the project was initiated when, after an inquiry with DSAG, it was clear that no useful SAP-based solutions were known in this regard apart from the GIB Suite."

The target requirements of the cooperative association were a solution integrated in the SAP standard in order to avoid media discontinuities, as well as an increase in the performance of the disposition in merchandise management through a system-supported tool that offers the possibility to use the already existing SAP master data and parameters.

Measurable success

"We have achieved all the main goals communicated in the project application with regard to efficiency improvements in the area of merchandise planning (procurement of goods, demand planning) and reduction of storage costs."

Schwarzenbach reports.

"The increase in distribution center availabilities due to a simultaneous reduction in warehouse volumes is clearly noticeable."

Stocks and order quantities could also be optimized by replenishing the correct quantities (according to ranges, rounding quantities) in the order monitor with the "right" articles (ABC, life cycle) if the truck or Far East container is not yet completely full.

In addition, the inventory hold problem was significantly reduced, which was most evident in the "slow-moving items" in the apparel or household items category.

One of the biggest efficiency drivers of the tool, however, is the increase in transparency. Whereas previously each demand planner maintained the master data in (their) own Excel list, the management of the master data in SAP now ensures a high level of transparency, so that, for example, mutual substitutions become less complicated.

In addition, scheduling decisions are easier to make and better understood thanks to the current master data and key performance indicators.

Less training plus user-friendliness

The introduction of the GIB suite with various Migros-specific adjustments such as Migros riders, ad hoc formulas and extensions via exits by a ten-person project team consisting of GIB and Migros employees went smoothly and was flanked by two personal two-hour training sessions by key users in each case.

"The project members themselves created the relevant training documents. Thus, the introduction went very well and the suite could be used already a few hours after the training".

Schwarzenbach says.

In the meantime, no one can imagine doing without the software solution. According to the MGB, the GIB suite scores above all with effectiveness - in the sense of: doing the right things; and working optimally with comprehensive information, range and RW optimization and calling up key figures according to different views (for example, sales/forecast).

"Above all, the 'Operations' applications for handling daily jobs, such as identifying missing parts, complaining about deliveries, master data maintenance, etc., and 'Buying' for determining requirements and triggering orders offer us the greatest advantages in our day-to-day business."

Schwarzenbach adds.

The time saved by the GIB software as a result of added transparency and efficiency enables Migros to focus on other important tasks.

The company is now already planning further joint projects with GIB. Migros has already implemented a number of change requests with the IT service provider and is already planning for the future:

"We are sure that S/4 Hana will be a topic in the future that still offers a great deal of potential for further cooperation with GIB"

says Caviezel.

"The operational benefits of the GIB suite in Migros' supply chain process are so great in the R/3 world that working in the new S/4 environment would be unthinkable without the GIB solution."