Implementation of Microsoft Dynamics AX in retail network "the KEY Computer Center

Information on the customer

The network of the KEY computer equipment works at the market since December, 1991 and today integrates 16 shops in St. Petersburg and regions.  On polls of buyers (Gallup Media, January-February, 2005) the KEY Computer Center is an undisputed leader in the market of retail sales of the computer equipment, wins first place in the rating of mentioning of computer firms and is one of the most intensively developing companies in St. Petersburg.

"KEY" is the leading official partner in North-West Region of such leaders of the computer industry as Intel, Microsoft, Canon, HP, Xerox, Epson, Lexmark, Samsung, LG, Sony, Philips, NEC, Seagate, MSI, ASUS and others. The KEY computer Center provides a wide choice of office, computer and photo video equipment, supplies and component parts. Now the range of KEY shops includes more than 28000 positions.

Project Features

For the last years the company "the KEY Computer Center dynamically develops, at the same time expanding the regional presence and mastering the new directions of business (sale of computers under own brand). Against the background of dynamic business development the system of own development existing in "KEY" ceased to correspond to requirements of the company. With market development more and more diverse information for decision making was required for managers, an opportunity to independently configure analytical reports and to independently obtain necessary analytical information from the database was required. At the same time a part of routine transactions remained non-automated.

According to the CIO of "KEY" Oleg Weinberg "an old system did not allow to use modern methods of data processing, such as, for example, OLAP. Besides, creation of regional departments demanded creation of a system with ampler opportunities of scaling. Obviously, global reorganization of a system on the outdated platform was absolutely inexpedient". As a result in 2004 the company began to think of need of implementation of the ERP system.

Choice of the solution and integrator

The solution was selected about a year: systems presented at the market were studied, experience of other companies working in retail was analyzed. According to Oleg Weinberg, it was obvious that at integration of a system its adaptation and completion anyway will be required, and the solution Microsoft Dynamics AX optimum approaches from this point of view. Features of retail are like that that players of this market should review very often cardinally approaches to business depending on needs  of consumers.

In general, the choice for benefit of Microsoft Dynamics AX was influenced by its following characteristics: simpler adaptation and upgrade of a system in comparison with solutions of other vendors and also reasonable price.

"KEY" imposed even more serious requirements to the partner in implementation. "Mainly interested me what projects were made by the company. And first of all unsuccessful projects were of interest to me. When the project is successful – not always clear why it turned out. And here when the company can analyze the reasons of the unfortunate project, it becomes clear draw conclusions whether it is possible to deal with it", - Oleg Weinberg tells.

At the last stage "KEY" selected already only from two companies, as a result having given preference to Columbus IT Russia. "Columbus IT, one may say, simply convinced us that they really have a good command capable to finish the project, - Oleg Weinberg says. – It became one of decisive factors".

Besides, It should be noted that Columbus IT works with retail long ago and successfully. The company is a participant of an initiative of Microsoft Industry Builder and the official Microsoft partner on development of the international vertical solution for automation of retail networks. The solution  for retail developed by Columbus IT company based on Microsoft Dynamics AX is focused on centralized operation by retail retail chain stores. Providing effective interaction between the central office and shops of network, the solution covers the most important aspects of retail business, such as assortment management, management of merchandising, vendor interaction, planning of deliveries, pricing, the analytical reporting, means of increase in loyalty of buyers.

In addition change of business processes of the company "the KEY Computer center and, in particular, entry of the retailer into the markets of other areas of North-West Region became one of important circumstances of making decision on implementation of Microsoft Dynamics AX. In representations IT infrastructure also began to develop and to remake own system under features of representations which will demand business process automation sooner or later in the company considered inexpedient.

Project Objective

"The main objective of the project was in  consolidating purchase management and sales, to optimize goods flows and to receive the powerful analytical tool in the order. As we by right consider ourselves leaders of the regional market, we wanted to receive the system which is completely satisfying to features of our business and at the same time not to lose the know-how developed by own forces", - Oleg Weinberg noted. For achievement of the specified purpose it was necessary to automate the central office and also to implement the WMS solution Columbus IT in a new warehouse complex of the company.

Project Progress

In February, 2004 the first stage of the project – automation of the central office based on the Microsoft Dynamics AX system started. The general duration of works was eight months. A system was brought into operation on September 4, 2005. During the project were automated: forecasting of sales, purchase planning of goods on the basis of the received sales forecasts, pricing, planning of stocks in warehouses and in shops (assortment planning) on the basis of the received sales forecasts, supply management process automation, the corporate reporting by means of the OLAP tools, etc.

Cooperation of "KEY" and Columbus IT was based on the principle Time&Material, i.e. were paid for project deliverables time spent by consultants, but not in advance stipulated fixed price (Fixed Price). This approach was repaid. In particular, for example, during the project the decision to refuse automation of a number of business processes as they required further optimization at the organizational level was made.

The second stage of the project was devoted to the solution of a problem of automation of the new 4-storeyed warehouse complex designed to provide with goods retail network in St. Petersburg and nearby regions.  The old warehouse of 4000 sq.m ceased to correspond to requirements of fast-growing network therefore the decision on purchase of the new complex twice exceeding old on the area was made.

The WMS system on the Microsoft Dynamics AX platform offered by Columbus IT company completely considered specifics of activity "the KEY Computer Center and did not require almost any completions. This solution approved in many Russian retail networks allowed to optimize warehouse space, to accelerate distribution of goods, collecting and packaging of loads.

"The solution based on Microsoft Dynamics AX was developed by us four years ago, now it actively is implemented through the whole country and beyond its limits, - Oleg Omelchenko, the head of the WMS group of Columbus IT Russia company says. – The first implementation of the WMS solution was in Podolsk, further in Ukraine in Dnipropetrovsk, then in Moscow, and, at last, in St. Petersburg. Thus, besides that we with "KEY" worked well together on the first project, at us was that to them to offer for the second". 

Along with the choice of the suitable premises under the distribution center the management of "KEY" set the task of creation of design of IT solution of future warehouse complex for consultants of Columbus IT. In parallel with development of design the Columbus IT company held meetings with specialists of "KEY" at which the WMS system – the solution for the distribution centers – and its opportunities was shown them. As consider in Columbus IT, a parallel work progress – working meetings with specialists and development of design of a warehouse – allowed to consider more fully all requirements of specialists of "KEY" to a system and to the premises. The ready technical specifications became result of meetings. Knowing as what goods in a warehouse can be placed, the company could also adjust requirements to the WMS system.

Columbus IT began to implement collected requirements, then a system was tested, however implementation had to be postponed for several months. "Construction schedules were moved up, the building was not ready to that to stop by in it yet, - Oleg Omelchenko remembers. – Besides, to minimize losses from moving of a warehouse and system implementation, we agreed with "KEY" that if we do not manage to start the solution for May holidays of 2006, then we will make it at the beginning of January, 2007". Need of moving of a warehouse and start of WMS during these periods is connected with the fact that in Russia small recession is traditional at this time. In May a trade inventory in shops rather low, and in January, on the contrary, stocks of goods honor the biggest, but suppliers have New Year's vacation therefore it is easier to transport goods in lack of new deliveries.  As a result project works are decided  to be interrupted from May to November, 2006. The ready and tested system considering all requirements of the customer "waited" when the premises are ready.

In November, 2006 the working group on the project gathered again, all requirements to a system were updated. And, at last, the next, final stage of works – actually an implementation stage – came in January, 2007. On January 2, 2007 the project team consisting of specialists of Columbus IT, business experts of "KEY" and also warehouse workers started automation of the distribution center.

Within the project parameters of accounting of goods were changed: so, in an old system when accounting goods its dimensions did not play an important role, and in new – on the contrary, the specific cell was considered, respectively, it was necessary to count the sizes of each goods. 

Project Results

Implementation of Microsoft Dynamics AX allowed  to automate work of the central office of the company, namely the central warehouse, commercial service, department of logistics and audit and the service center. Now Microsoft Dynamics AX automates processes of a goods turnover of the company. Implementation allowed  "KEY" to solve key problems of the central office, including forecasting of sales, purchase planning of goods on the basis of the received sales forecasts, pricing, planning of stocks – in warehouses and in shops (assortment planning) on the basis of the received sales forecasts, supply management process automation, etc.

The WMS system unrolled a bit later allowed "KEY" to control more precisely a status of a warehouse of the company, the nobility what goods where lies as it moves. "Process of participation of warehouse specialists in decision-making where to put these or those goods, is minimized – a system itself analyzes turnover of goods, existence of empty seats, and issues offers how to place a batch. It allows to predict more precisely intra warehouse flows and to create orders, requests for shipment of goods", - Mr. Weinberg notes.

As a result today the Microsoft AX system used by "KEY", being the powerful analytical tool, allowed network to consolidate purchase management and sales, to optimize goods flows. The WMS solution also became a set of the powerful tools every day helping to organize effectively work of employees, the movement of goods and documents.

Today in the system of the central office 40 users, and in the WMS system – 20 at the same time work. The KEY company is going to develop the received solution in close cooperation with specialists of Columbus IT Russia.

Main office of Columbus IT company:
Moscow, Kozhevnichesky Drive, 4, building 8.
Ph.: (495) 363-55-80, Fax (495) 363-55-81

Columbus IT St. Petersburg:
St. Petersburg, Finlyandsky Ave., 4, office 607.
Ph.: (812) 332-1416, Fax: (812) 332-1419

[mailto:info@columbusit.ru info@columbusit.ru| www.columbusit.ru]