CASE STUDY NORGESGRUPPEN. Aptean Helps NorgesGruppen Grow Market-Leading Retail Business.

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1 Aptean Helps NorgesGruppen Grow Market-Leading Retail Business

2 2 Around the year 2000, the privately held grocery retailer NorgesGruppen defined a strategy to expand its business into a position as market leader in wholesale and retail in Norway. With well over 35% market share, the success is obvious. The retail operation serves 2600 sales outlets and includes many well-known store chains: The wholesale operation is a company group (ASKO) that serves these as well as other independent shops, gas stations and food service operations. The product categories range from fresh and frozen food to general merchandise and auto supplies. NorgesGruppen has a supply chain strategy to deliver all products via its own distribution network to ensure leading efficiency and effectiveness, providing consistent service and quality both in products and information. CUSTOMER DETAILS NorgesGruppen INDUSTRY Grocery Wholesale & Retail Distribution SOLUTION IMI Supply Chain CHALLENGES High costs for growing business volumes BENEFITS Increased delivery quality with reduced cost per distributed unit Decreased inventory levels by intelligent coordination of supply and demand with increased customer service Integrated and automated business processes with suppliers and customers and stores Supporting business expansion with new product categories and doubled transaction volumes since go live Outstanding system stability and performance Limitations in capacity and quality drove need to redesign the supply chain Inadequate systems for future state New product categories adding new requirements

3 3 CHALLENGES New Supply Chain Design When NorgesGruppen shaped its go-forward strategy for growing the business to become a market-leader, one of the cornerstones was to design a new supply chain and logistics network. The articulated objective was to shape Norway s most powerful and customer-oriented logistics machine. This would mean consolidated purchasing, enablement of multi-channel sales with all orders and invoices visible across all subsidiaries, and coordination of all goods flowing from suppliers to stores and customers. From a logistics operations perspective it was necessary to implement a multi-channel distribution operation that could support merge-in-transit flows and efficient crossdocking. Changing Company Structure NorgesGruppen was formed by acquiring several regional retail and wholesale companies. The new group structure includes common corporate-level functions for purchasing and logistics, but also continued operation of regional companies with full profit-and-loss responsibility for sales and operations. With this followed internal sales and purchasing transactions that needed to be automated as far as possible. At the same time NorgesGruppen wanted to create a singleface to all customers and stores with access to the same services and assortment. Inadequate Systems NorgesGruppen had invested in custom built applications tailored to their (then) current operation and business model. But the new supply chain design called for a highly flexible software solution that could help NorgesGruppen in its transition to a coordinated model, and support new technologiesfor real-time sourcing and production.it should also be a solution that would support future changes to the company structure, product assortment and logistics network. IMI Supply Chain is a central factor for our ability to maintain NorgesGruppen s position as market leader in the Norwegianfood grocery business. Our growing business needs intelligent systems for coordination and synchronization of supply and demand. The integrated Aptean solution brings key features and functionality necessary to cope with increased business volumes and to improve NorgesGruppens overall performance. Per Tellef Arning Director Operations

4 4 SOLUTION The key requirements on the system were to (1) provide highvolume transaction capabilities, (2) allow the right flexibility to support the new supply chain design with multi-channel sales, sourcing and distribution,and (3) to support a service-orient integration model. NorgesGruppen evaluated several end-to-end enterprise (ERP) solutions, but found that none of them could provide the level of performance, functionality and flexibility required and especially not at a reasonable cost level. Instead, NorgesGruppen decided on a best-of-breed strategy, and selected the IMI Supply Chain suite with its order, inventory and warehouse management modules as the heart of the solution. The solution was rolled out using a phased approach during (site-by-site), followed by a full upgrade of the solution across all sites in RESULTS Reduced Supply Chain Costs The new logistics network meant several structural changes that helped grow revenues and still reduce costs. Decisions regarding when and where to stock products are made on corporate level, and allows NorgesGruppen to optimize inventory and deliver based on the combined properties of products and customers. This demand-driven model reduces inventory levels and eliminates unnecessary cost for handling, transfers and obsolescence. With the core capabilities of IMI Supply Chain we are able to gain significant effects in our operation, not least from our sourcing and routing model, says Egil Harstad, Director Warehouse Replenishment. Since implementing the solution we have seen increases in inventory turnover and customer service, along with decreasing cost levels. Real-time Control and Visibility One important objective for NorgesGruppen was to create a corporate view of all business processes. With the decision to keep a company structure with several legal entities this could have been a challenge of magnitude. But IMI Supply Chain has made it possible to define corporate level processes for managing suppliers, products, prices and channels, while at the same time allowing local market and warehouse profiling running all companies in a single system instance. It means all staff and trading partners have access to real-time information about prices, promises and delivery status. And the system knows the exact contents and priority of every unit (container, pallet, box etc) that is being handled. Increased Productivity and Quality In the daily operation, the new solution has helped NorgesGruppen benefit both from increased automation in collaboration with trading partners, and from optimized and paperless production in logistics execution. Orders, invoices and ASNs (advance shipping notices) are exchanged electronically, leading to error-free processing and a warehouse operation with streamlined receiving and shipping processes. As it occurs in real-time, all task priorities are dynamically handled to ensure that warehouse and transportation staff can focus not only on doing things right, but also on doing the right things. Adaptive to Change NorgesGruppen continues to expand the business by adding new product categories to its assortment. During one year we added products as diverse as tobacco, fresh meat and gas station supplies to our facilities, and almost doubled our transaction volumes, states Per Ola Drøpping, IT Director Wholesale. We have had no problems complying with regulatory requirements like food safety and data integrity and feel very confident that our platform allows us to aggressively continue to add new products, store formats and e-commerce initiatives. Stability and Availability At NorgesGruppen, IMI Supply Chain is deployed in one central solution across all sites and companies. It means that requirements on uptime and availability are very high but also that transaction processing must be extremely fast.

5 5 As we ship some 400, ,000 order lines on a daily basis we need a solution that is always working. We certainly appreciate the stability of the IMI Supply Chain solution it makes our supply chain a guarantee for people having food on their table in Norway, adds Per Tellef Arning. Close Relationship with Aptean Implementing a solution of this magnitude certainly has a big impact on the organization. NorgesGruppen s executive management team backed the project as a key strategic initiative that was vital to future business success and that required full commitment from all employees. But not least important was the commitment also from the Aptean team. concludes Per Ola Drøpping. Together we have shared a common objective to significantly improve the business processes of our operation and to avoid customized solutions. The Aptean team helped us implement best practices and industry standards and holds a strong position as a strategic partner as well as a trusted advisor. ABOUT IMI SUPPLY CHAIN IMI Supply Chain offers a broad range of integrated, open standards-based solutions that service key areas of complex supply chains and distribution networks. The solutions can operate as standalone modules or can readily integrate into an enterprise s existing applications. Key functionality in the IMI Supply Chain suite includes order and inventory management, demand and replenishment planning, warehouse management, transportation management, slotting, resource planning, internet collaboration and mobile solutions. Some of the world s leading customers use IMI Supply Chain including: Ahlsell, Ahold, Canadian Tire, Celesio/NMD, Pepsico, Schenker Logistics. More than 5,000 customers around the world rely on Aptean to give them a competitive edge. By providing innovative, industry-driven enterprise application software, Aptean helps businesses to satisfy their customers, operate more efficiently, and stay at the forefront of their industry. For more information, visit: Copyright Aptean 2014 All rights reserved.