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Spar Kjøp

Integrated retailer ERP case study
Integrating diverse operations

18 stores, 700 employees and different types of inventory.

When a customer orders from Spar Kjøp in Norway, the country´s largest mail order company and well-known retailer, a Microsoft Dynamics AX system ensures that the right product is picked from inventory, packed and sent. The customer gets better service and Spar Kjøp cuts costs while increasing revenue.

Spar Kjøp is a well-established player in the Nordic mail order market with yearly turnover of 900 million NOK and continuous operation since 1962. They sell clothing and textiles for wholesale or private use, gift items and games - through both mail order and 18 retail stores in Norway.

"We have 18 stores, 700 employees and different types of inventory. 40% of our turnover comes from mail order," explains the IT Manager at Spar Kjøp, Terje Nymark Olsen.

Spar Kjøp previously used a combination of a Movex financial system from intentia, a store system called Solution 1, and their own-developed application for mail order and logistics - each of these with separate databases. With Microsoft Dynamics AX, all information now resides in one integrated database, where it can be accessed by the warehouse, the stores and the customers logging on via the internet.

"All the stores and warehouse divisions hook up to the system to communicate directly with each other. Previously, reports came from different departments like finance or inventory, and the information that was available in the stores was not accessible from the mail order division. This also meant a lot of double registration of data. Now all information is gathered in one place and every link in our chain has full overview as to what is in stock and where - both at headquarters and out in all the stores," states the IT Manager. "Our new system also allows us to communicate with our suppliers and partners via Microsoft BizTalk. The result is more cost-effective daily operations."

Automated Warehouse

Spar Kjøp has a warehouse that is divided into an automatic crane-handling inventory, carton inventory and picking inventory. When a customer orders - via the web, mail or on the phone - Microsoft Dynamics AX checks to see if the goods are in stock. Based on that information, there is an automatic notice to the warehouse module that plans movement of goods, controls the crane inventory and gives the results to truck drivers. The picking department gets the right goods, the expediters get their packing lists and the rest of the pallet goes to the carton inventory. When the packing is done, the new ERP system receives notice that updates the customer order and produces all the necessary documents, also an EDI formatted notice for the mail.

"Spar Kjøp expedites 400,000 packages per year, with an average of 2,000 daily. The communication between Axapta and the warehouse was an important reason for choosing Microsoft Dynamics AX as our new ERP system. it is critical that we pick and send the right goods," says Nymark Olsen.

Future Growth through the web

Spar Kjøp is betting on growth in the internet market. They see possibilities to increase sales through a combination of catalogues and e-business. it is the catalogues they send out that trigger the most purchases, but more people are using the internet as their order medium because it is simpler and easier. "Therefore, we must have e-commerce as an integrated part of our total business solution. The customer gets to check out the products in the catalogue in peace and quiet, then order them on the web at their own tempo. With our new management system, each customer can get always updated information on whether our products are in stock," reports the Marketing Director at Spar Kjøp, Tom Eide Knudsen.

Microsoft Dynamics AX drives the entire value chain

Microsoft Dynamics AX at Spar Kjøp drives the entire value chain: stores, internet site, inventory, invoicing, accounting, personnel and payroll. This brings cost optimizations to every link in the chain. In addition, it provides a strong central management tool that can localize any bottlenecks. "We were looking for better information now. We wanted to reduce the percentage of errors, and we are focusing on giving our customers better service," says Tom Eide Knudsen. "There were many deep evaluations behind our decision on this new system. An important point is that we wanted to use less time on our business processes while simultaneously working from the customer's perspective. The new integrated system provides us with competitive advantages in the marketplace."

Categories: Retail, Microsoft Dynamics AX

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