Implementation of MS Dynamics AX (Korus Retail) in network of O'KEY hypermarkets

Data on the customer

The first O'KEY hypermarket in St. Petersburg opened in May, 2002. At the moment in St. Petersburg eleven hypermarkets with a total area about 87000 sq.m work already. By the end of 2007 opening of one more hypermarket "O'KEY" on Malaya Balkanskaya Street is planned.

In 2005 the network of O'KEY hypermarkets went out of the St. Petersburg region. On July 10, 2005 opening of O'KEY hypermarket in Rostov-on-Don, on February 23, 2007 - in Togliatti, on March 3, 2007 - in Krasnodar took place. In development plans for O'KEY network - opening of hypermarkets and supermarkets in Moscow, Nizhny Novgorod, Murmansk, Yekaterinburg, Tyumen, Chelyabinsk, Perm, Volgograd and other cities of Russia.

In May, 2006 in St. Petersburg the first O'KEY-EXPRESS supermarket was open, the network became multiformat. Now there are 2 supermarkets to the address: Kolpino, Tverskaya St., 36/9 and Pribrezhnaya St., 13, m Rybatskoye, with the floor space of 1200 sq.m and 700 sq.m respectively. In the nearest future in St. Petersburg it is going to open more than 15 supermarkets.

Prerequisites of the Project

Modern business, especially if it is connected with direct customer service, is very dynamic and dependent on the slightest fluctuations of market conditions. For this reason for the management of network of O'KEY hypermarkets it is vital not only to react most quickly to all market changes, but also to beforehand foresee them and to take necessary anticipatory actions.

Any hypermarket should deal with large volumes of information which is subject to processing and the analysis. The problem of monitoring of a goods turnover in a trading floor is most difficult at the same time.

Traditionally this problem is solved by a join path of the equipment of a trading floor on the basis of the information system developed by the supplier of this equipment or by own efforts. At the same time the ERP system automating business processes of the company at the level of the main warehouse and the central office is implemented. Then these two systems integrate for the organization of information exchange between them. And such information exchange not always takes place correctly and quickly while operational and accurate accounting of goods is one of decisive factors of minimization of costs of large trade enterprise. Thus, the management "OK" had a problem of the optimal organization of an information system.

All hypermarkets "O'KEY" are a part of retail chain stores with centralized operation. Control is exercised from the remote central office obtaining information from several hypermarkets, each of which has own database. Therefore, in order that the management could make the operational and justified management decisions, all these databases should be synchronized with each other.

Thus, already at project development of construction of retail network before management "OK" there was a number of important tasks:

• need of automation of all businesss-processes at the level of the equipment of a trading floor within the unified information system integrating the front - and a back office;
• need for the most operational and complete analysis and forecasting of market situation;
• need of synchronization of databases of all shops for acceptance of the operational and justified management decisions.

<p class="title">ERP system choice

As a best tool for the solution of the O'KEY hypermarkets of tasks which rose before the management of network the industry system for retail networks Korus Retail developed by CORUS Consulting company on the basis of Microsoft Dynamics AX was selected. And management of O'KEY when choosing a product was guided not only its functionality, but also reliability of the company performing implementation.

In general, according to the customer, the choice of the solution of the class ERP was influenced by the following factors:

• Microsoft Dynamics AX is a full-function western ERP system
• User-friendly interface, flexible configuration
• Easily scalable solution
• The industry solution developed especially for retail networks
• Integration into the equipment of a trading floor
• Full support of the Russian specifics

Implementation project course

The project started on the first hypermarket of O'Key network in October, 2001, in April, 2002 a system was put in commercial operation. Solution deployment in the second shopping complex practically came down to replication of the solution, and was executed in two months (from December, 2002 to January, 2003). Within the project the industry solution based on Microsoft Business Solutions - Axapta with carrying out a number of the modifications required for the industry was developed. Obtaining operational and reliable information on the shopping complex was one of the main solution specifications. The project on implementing solution in network of hypermarkets was implemented in two stages.

The 1st stage: October, 2001 - April, 2002 (6 months)

The network of hypermarkets was created from scratch, respectively, the working information system at the time of the beginning of project implementation was absent. Date of opening of the first hypermarket was strictly recorded that did not grant to consultants of Corus Consulting the right to an error. At start of the retail enterprise the correctness of filling of the main reference books is especially important for prevention of conflict situations on settlement points of sale at the time of settling with buyers. Were planned and carried out by specialists of Corus Consulting of a project work so that similar cases in the first days less than 10 were recorded.

The 2nd stage: December, 2002 - January, 2003 (2 months)

At the second stage of the project the organization of network management was performed (the translation of the solution in the network mode). Besides, during a stage transition from one version of software to another was made. Proceeding from specifics of business of the client, such transition had to be performed as soon as possible. Installation and the Microsoft Axapta setup and management systems for settlement points of sale was performed by specialists of Corus Consulting in only 7 hours. The scalable solution allowing IT - to specialists of network to open new hypermarkets without involvement of consultants of the company became result of a stage.

Results of Implementation

The problem of automation and integration of all chain of command business of network of O'KEY hypermarkets within the unified information system - from the point-of-sale terminal to the central office - for the first time in Russia was solved by means of Microsoft Dynamics AX. As a result hypermarkets received the unified information environment integrating all their business processes. With its help it was succeeded to achieve not only the considerable speed of information exchange in the company, but also its complete correctness. Thus, management of network had an opportunity to carry out the most operational and accurate accounting of goods. The mechanism of support of a system of barcoding and also interaction of Korus Retail with portable devices of collection of information, POS terminals, computer scales, etc. is for this purpose provided.

All block of statistics in O'KEY hypermarkets is implemented on OLAP technology. This technology, being the most modern in the class, gives to users systems the amplest opportunities on creation and processing of analytical reports. And these opportunities are implemented online that allows management to react most quickly to changes of market situation and even to take anticipatory actions.

Control of all hypermarkets "O'KEY" is exercised from the central office which defines the general policy, carries out the centralized purchases and settlings with suppliers, defines pricing, mechanisms of implementation marketing and promotion actions, etc. The necessary for collecting mechanism of the distributed data is put in Korus Retail by developers "Consulting KORUS". Its use allows to synchronize information which is contained in databases of all shops. Moreover, it provides timely representation of the most complete data to the management of network necessary for acceptance of the operational and justified management decisions.

As a result of implementation management of the Customer got the following competitive advantages:

• Integration into a uniform chain of command. All events which are taking place in the shopping complex - from sale on the local point-of-sale terminal to the decisions made at office - were united in a uniform chain of command.
• High speed of information exchange. Using Korus Retail for Microsoft Axapta it was succeeded to achieve the considerable speed of information exchange in the company. The management of retail chain stores had an opportunity to react quickly to the happening changes.
• Complete certainty of data. Thanks to shaped coding all goods are included in an information system. Accounting of merchandising is made using POS terminals, data acquisition devices, computer scales, etc. Thus, management of retail chain stores had an opportunity most quickly and precisely to conduct merchandising monitoring.
• Synchronization of several databases. Korus Retail for Microsoft Axapta provided synchronization of the data which are contained in databases of all shops (on goods, clients, suppliers and so forth). The management of network obtains the most complete data for fast acceptance of the justified management decisions.
• Operational analysis and forecasting of market situation. Korus Retail for Microsoft Axapta gave to the management "OK" the amplest analytical opportunities. The analysis can be performed online that allows to react quickly to changes of market situation and to take anticipatory actions.
• Marketing operations management. Thanks to system implementation, the management of retail chain stores can manage advertizing and image campaigns, organize different discount types and provide to buyers discount cards. Due to operational and accurate accounting and also synchronization of work of all divisions, there is an opportunity to personify relationship of network with each specific buyer.

Functional characteristics of the implemented solution

The task of the optimal organization of an information system and effective management - both the local enterprise, and all network of shopping complexes was set. The traditional solution of this task - data exchange between two information systems. The first is local and integrates the equipment in trading floors. The second - the ERP system automating business processes at the level of the central office. At the initial stage the decision on automation of the following business processes was made:

• purchase managements,
• assortment managements,
• settlings with suppliers,
• internal logistics,
• managements of retail sales,
• production managements.

Specifics of the implemented solution

The main modifications on the project were made within development of industry solution of Korus Retail for Microsoft Axapta:

• modification of management of a discount card system,
• modification of retail pricing,
• bringing to compliance of the requirement of the customer of a system of shaped coding, including integration into the equipment for drawing and reading shaped codes,
• creation of a management system for the range, reference books using treelike qualifiers of the range and commodity brands,
• toughening of business processes of goods acceptance from suppliers for control of discipline of deliveries,
• optimization of procedures of inventory of goods for ensuring recalculation of goods for a short period,
• setup and optimization of the module of production for reflection of customer requirements on production of culinary products, in particular, requirements for document creation (for example, the calculation map and intaking sheets)

Integration with other systems

The cash server servicing point-of-sale terminals interacts with the ERP system by means of the module of integration developed by CORUS Consulting company. In each shopping complex more than 34 cash register lines are installed. Data exchange between these applications does not depend on communication channels and can be serviced by a mail system. Speed and volume of information exchange conform to all requirements imposed to a system - often in one working day through a system there passes sale of a half of all trade inventory of the shopping complex. All reporting is implemented in the form of OLAP cubes that gives the chance to consider it in different cuts and to receive necessary analytics. Integration with data collection terminals, the equipment of printing of barcodes and discount cards is implemented.

Technical characteristics of the solution

System architecture

A system is unrolled in the 3 a-level configuration using the server of the Axapta Object Server application and connection of "thin" clients. Remote connection of jobs of users of 2 shopping complexes is provided with a communication channel of 2 Mbps. System maintenance is implemented based on 1 database server and the OLAP server and 1 server of the application. The Axapta Object Server application server is based on 2 * Xeon of 2.4 GHz, 2 GB of OZU, 2 disks on 72 GB in RAID 1 with the set Microsoft Windows Server 2000. As OLAP - the solution Microsoft Analysis Services is used. 20-25 jobs are the share of each shopping center.

Database server

The Microsoft SQL Server of 2000 is used. The server of the database is implemented based on 2 * by Xeon of 2.4 GHz, 6 GB of OZU, 2 disks on 72 GB in RAID 1, 8 of disks on 72 GB in RAID 1+0 with the set Microsoft Windows Server 2000.

Volume of transactions

40-50 GB for one shop a year, the general gain of the database of 2 shopping complexes - about 100 GB a year. Key system performance is the volume of transactions on sales of goods: in each of shopping complexes of network about more than 30 cash desks are used, in general the network services more than 30.000 buyers a day. Daily in a system about 40 thousand new commodity transactions are registered.