Egor Lanko: Thanks to NAV "Alphabet of Taste" will deliver orders on the fly

Egor Lanko: Frankly speaking, initially we were not going to implement NAV for automation of work of the warehouses "Alphabet of Taste". The project started based on the 1C Platform, but in its course there were difficulties. They were connected not so much with the platform, it just approached according to functional requirements how many with integrator: interact with it it appeared quite difficult, there were problems with an adherence to deadlines therefore we decided to replace the partner in implementation. When we estimated that work which was already performed, understood that initially not really high, and in case of replacement of a system, we will not lose quality of the code much. Having considered several platforms and solutions, stopped the choice on NAV. As a corporate information system it is used by the company more than 10 years. Logically, as warehouses of the company are automated now based on this platform too. This solution was successful.

TAdviser: Whether you considered some specialized WMS systems an alternative of NAV?

Egor Lanko: At once I want to tell that 1C is a worthy system, but in our case, at a large number of unique business processes, algorithms under which it was necessary "grind" a system, the crucial importance was played not only by the platform, but also the choice of integrator which could carry out assigned tasks qualitatively. We began cooperation with Willmore company and never regretted about it. This company perfectly works and at us quickly it turned out to find a common language.

At a choice stage other platforms except 1C and NAV also were in focus of attention. For example, we considered the possibility of automation of warehouse activity based on SAP (the Utkonos online store, for example, works at this system). But SAP was too bulky and not suitable for us the platform: its minus the lack of an opportunity to correct mistakes in procedures in real time unlike the same by Microsoft Dynamics NAV became essential. We considered also the specialized WMS systems, but by a number of parameters they did not suit us.

TAdviser: How the logistics of the company around online and offline sales is built? If the company has warehouses or distribution centers?

Egor Lanko: "The alphabet of taste" locates own distribution center (DC) in the Istra district of the Moscow region, its warehouse space – nearly 13 thousand sq.m. The warehouse servicing remote trade (online store) is located directly in Moscow, its area is more than 4.3 thousand sq.m. Besides, we have production workshops for preparation of the wide range of ready dishes and packaging of products in Moscow and St. Petersburg, the total leased area of both productions – more than 7.4 thousand sq.m. Work of food production is also partially automated in a warehouse system based on NAV.

The most part of goods comes to own RTs, and in Abzuk of taste there is a lot of own import from China, Brazil and other countries. Our unique trade advantage – work with a great number of suppliers directly. After the goods get on the central warehouse, it is carried on shops. About 165 suppliers supply the warehouse of remote trade servicing online store. The finished goods of food productions also get at retail or directly to buyers of online store. So all at us three logistic points: the central warehouse (RTs), a warehouse of remote trade, food productions in two cities. The number of retail stores in both capitals – more than 70.

TAdviser: What is executed based on Microsoft Dynamics NAV in your warehouses?

Egor Lanko: In total based on the warehouse WMS system which basis NAV was we automate three sections mentioned above: distribution center, warehouse of remote trade and food productions.

The problem of automation of RTs was classical: in a system the full stroke of standard procedures is made, beginning from acceptance and distribution of goods in a warehouse, its storages, sortings, complete sets of batches and shipment further on a chain. It is possible therefore implementation took place in RTs quickly enough, though not without roughnesses.

Quite simple upon was implementation of warehouse functionality and on food productions as we automated only shipment of finished goods without the raw materials arriving on kitchens. Implementation of WMS on production allowed to automate packaging, a complete set and shipment of finished goods on shops of network.

Automation of a warehouse of remote trade became the most difficult part of the project. Exactly here the huge volume of work was done, unique algorithms of processes in a warehouse which anybody does not have practically in the market are created. I want to remind that we the second in value shop in the area online of sales of food in Russia.

TAdviser: By what specifically the functionality for remote trade is used?

Egor Lanko: The specifics online of retail impose critical requirements of work of the WMS system: the goods should get to clients fresh, as fast as possible and without errors. While the expiration date of some goods does not exceed 12 hours. Also questions of inventory of products in a remote warehouse as the goods can become useless before the stated term are important or be damaged when transporting: we do not want to supply with such goods of clients and we have no right. Work of WMS is an important part of our strategy online of sales. Its essence is in providing the best conditions on the power supply Internet product delivery in the market. Now Azubka of taste only offers delivery online of orders to the day and also special two-hour intervals which guarantee delivery time of the order in the selected hours.

Level of complexity of the processes providing remote trade, enormous. Due to implementation of WMS performance of a warehouse of remote trade grew at least twice. Under performance the quantity of lines, quantity of investments of goods which one collector can collect means. Now we implement the following round in development of WMS and we expect to increase it in addition by 5-6 times. Increasing this indicator, we in passing reduce costs for a complete set and we increase turnover of a warehouse which already so reaches record 4 days. Over it it was necessary to work very seriously.

TAdviser: How work was built during implementation of a warehouse circuit of NAV? Tell, please, in more detail about the project course?

Egor Lanko: During implementation we used classical project management. Here just we did not do anything original, moving from a stage to a stage: design, development, implementation, system testing, then its commercial operation. On the other hand, paradigm shift of work of a warehouse and usual to employees of algorithms demanded efforts.

Personnel training became long process, for employees the system of motivation stimulating them to active mastering of new software was created. More than 140 people so on accustoming to a system time, of course, left work only at a warehouse of remote trade. Besides, to avoid errors at an accustoming stage, we minimized any initiative of employees of intervention in work of WMS. It guaranteed exact result of its work.

TAdviser: How easily your workers picked up work in a new warehouse system? What is the time it was required to them as a result on adaptation? How workflows for ordinary employees as a result of implementation changed?

Egor Lanko: As I already noted, it occurred not at once, adaptation the period took about 3-4 months. We developed tough multi-layer system of control over the implementation of work, a set of restrictions which constantly sent warehouse workers to the necessary bed. Now we gradually loosen these excessive controls because in it there is no such urgent need any more.

Of course, for the non-management employee a difference between work with the modern WMS system and paper document flow – striking. For the company automation brought powerful benefits too, we achieved the maximum control over work of warehouses and an opportunity to perform planning, earlier even information on stock balance was generated not always correctly.

TAdviser: How do you estimate the first results of implementation of a warehouse system?

Egor Lanko: Work acceleration, how many receiving correct state-of-health data of warehouses became the result of implementation, most significant for the company, to WMS not so much. It allowed to achieve the maximum control of quantity and product quality, reduction of regrading and losses. As a result - increases in capacity of warehouses, optimization of use of the areas. Now we have an opportunity to control online all warehouse processes. The share of manual work in these processes was significantly reduced. Without such WMS which we created it was impossible to plan work of a warehouse, to perform delivery of orders online to clients most precisely and without temporary losses.

If to speak about more specific digits, then the new WMS system provided double increase in productivity of a warehouse of remote trade, regrading decreased actually to zero here. Reduction of need for employees was 18% at increase in turnover of a warehouse of remote trade in more than 2 times. Capacity of warehouses of Alphabet of Taste company increased by 2.6 times.

Besides, requirements to qualification of personnel of a warehouse decreased due to bigger automation and specialization, we are going to simplify interfaces of working terminals and further that also minimizes errors of processing of tasks by employees. As a result we have online control of warehouses, decrease in a share of manual work and paper document flow, acceleration of all processing stages of orders by 2-3 times.

TAdviser: Do you have plans for further automation of activity of the company based on NAV?

Egor Lanko: Now there is a next stage of development of the WMS system and if everything conceived is successfully implemented, it will allow "The alphabet of taste" to bypass all key competitors on quality of service. Most quicker and with a huge accuracy we will be able to deliver online orders. At the same time the cost of support of all these processes for us will be rather low. For example, we already have positive EBITDA, and the direct competitors who implemented SAP still work at a loss that speaks about much. We will achieve that orders will gather on the fly. For this purpose we already formalized difficult algorithms and now we are engaged in their development together with Willmore. I cannot open all cards yet, but the model of work of a warehouse and courier service will be actually updated. In Russia still precisely nobody did it.