Integrated retail and wholesale solution reduces costs and improves KPIs

With annual revenues exceeding €2,7 bn, Konzum is the leading supermarket/drugstore/household goods chain in Croatia, Bosnia-Herzegovina and Serbia, serving 650,000 customers each day across 700 stores. Its retail business aims to provide customers with the best value for money through a carefully selected range of quality goods, and fresh, healthy and homemade produce. In addition to retail, Konzum also operates a wholesale business, which amounts to 30 percent of its operations. The organisation is proud of its leadership in innovation and the introduction of new technologies and services to its customers.

Challenge

Konzum’s legacy system was running on an old technology platform, which was difficult to maintain and develop further, and support for international operations was missing. In line with the organisation’s ethos to adopt international retail best practices, a modern scalable solution was to be implemented which would provide the retailer with a core platform for growth across its stores, retail lines and eCommerce business. A particular need was to enable a significant supply chain transformation – to increase the centralised delivery to stores from 50 percent to 80 percent.

Solution

The Konzum Demploys Oracle (KONDOR) project was established, and included the design, build and implementation of a fully integrated solution for merchandise operations management and supply chain optimisation. The project was delivered by Weigandt Consulting and covered both the retail and wholesale businesses. To support the project, a sophisticated and cost-effective operations and application management service was provided, and proved to be an important part of the project. The Kondor project was structured in three phases:

Phase I
Phase I delivered the new solution’s foundation functionality, which enabled the management of master data and prices. In addition, a custom-built wholesale solution was developed by Weigandt as a non-intrusive, fully integrated Oracle Retail add-on.

Phase II
Phase II delivered the following functionality: item sourcing, item ordering, supplier negotiation, inventory management, sales transaction audit capabilities and invoice matching for accurate supplier payment.

Phase III
Phase III created a baseline and causal sales forecast, on the Oracle RPAS platform, in order to improve accuracy. It covers more products and locations than Konzum’s previous legacy forecasting solution, and provides initially aggregated forecasts to rapidly realise benefits associated with procurement, sourcing and inventory levels (including working capital).

Results

The Kondor project has delivered many business benefits. These include the reduction in time required for users to input data, and the reduction in system support costs. Konzum’s new stable environment also benefits from one master data and promotion capability, centrally-controlled pricing and promotions for both the retail and wholesale divisions.

The integration of the retail and wholesale businesses into one solution has significantly reduced costs, and all relevant merchandising and supply chain KPIs have shown significant improvement. The effort required to operate the overall business on a day-to-day basis has also reduced - the up-to-date availability of accurate information means that decisions are more informed. In addition, Konzum is able to incorporate new business acquisitions onto the same working platform, bringing international synergy to the organization.