Odyssey WMS solution based on Microsoft Dynamics AX has provided optimization of the distribution center, allowing the retail company to use warehouse facilities with maximum efficiency. Due to optimal management of business processes and operations within the warehouse space the solution ensured increase of both goods turnover and cargo handling speed. The network of hypermarkets OBI, which sells products for renovation, construction, home and cottage and operates in the format of "do-it-yourself" (DIY), has more than 540 hypermarkets in 13 countries in Central and Eastern Europe. Today the company has more than 38 000 employees. The first OBI hypermarket in Russia opened in 2003.
While the business of the company was concentrated only in Moscow the internal system of management and automation of OBI which is used in other countries was applied around Russia as well. Since 2005, hypermarkets have opened outside Moscow: in Kazan, Ekaterinburg, Saint Petersburg, Nizhniy Novgorod, Omsk, Volgograd and Krasnodar. At that time the company had to face the fact that the information system did not meet the local needs related to logistics and imports. The main policy of OBI Group in respect of purchasing and delivery of goods is that practically all its hypermarkets operate on the Delivered Duty Paid (DDP) scheme.
It is assumed that the supplier brings the goods directly to the hypermarket and takes responsibility for all duties, taxes and risks associated with delivery. Alas, this kind of supply scheme, tried out in other countries, has not caught on in Russia. Russia, because of its large territories, requires the global purchase of goods, the bulk of which are imported goods distributed to stores. Unlike Europe, in Russia not all suppliers are ready to deliver goods to other cities, except perhaps Moscow and St. Petersburg, and in relation to import suppliers we have to take on these functions using the distribution center. Therefore, functions of logistics department in Russia are considerably different from similar departments in other European countries
At the first stage, all business processes were analyzed and described, requirements to information system were gathered. Based on this document, the company held a tender for the selection of the system. In the end, the network management decided in favor of Microsoft Dynamics AX in conjunction with the solution for automating the distribution center developed by the Odyssey consulting company. In addition to the consultant's specialists, four OBI departments were involved in the implementation, which were to use and develop the system in the future. The project's working team included employees from the purchasing, logistics, accounting and IT departments. Each department appointed a project manager and a deputy project manager. They were to be responsible for the compliance of the final result with the objectives of their department. Yulia Voronova-Slivnitsyna, manager of the logistics department of OBI Imports and Logistics Rus LLC, headed the project on the OBI side.
One of the peculiarities of the project was that we had both the ERP part of the system and the warehouse management module working within a single application. The warehouse management block is usually taken out of the ERP system and perceived as a "black box". To solve our tasks, it was necessary to implement management of business processes and operations within the warehouse space. We need to know exactly where and what goods are stored, so we needed an IT solution that automatically distributes and places the goods in the warehouse, and then forms the optimal route for the collection of orders and provides printing of all necessary documents
The system was planned to be put into commercial operation in early summer, but due to the new requirements the terms were postponed. September turned out to be the most favorable time for the transition to the new system: the "hot" summer sales season had already passed, while the New Year's season had not yet begun. During that period, we were able to respond quickly enough to the emergence of new requirements that arose during the launch of the system. We did not stop the work of the system and did not stop ourselves
By automating the distribution center, the company was able to optimize its business processes, in particular the procurement management. Today, the entire route of the shipment, from the time it is ordered from the supplier to its shipment from the warehouse to the store, can be easily tracked by reference to both the purchase number and the product's article number. It is possible to know where the shipment is, when and where it is supposed to arrive at any time. Purchasing coordination with the supplier has become simpler and more transparent.
Several delivery schemes are used in OBI to implement the scheme of flexible shipment of goods. One of them is cross-docking when in order to reduce the time of goods processing the goods are sent not to the warehouse, but directly to the shipment area. This makes it possible to reduce the time on the way from the supplier to the store shelf and make more efficient use of warehouse space, while the warehouse performs a consolidating function. Simultaneously with the cross-docking scheme, the standard scheme of goods storage at the warehouse is used, when the goods are placed for storage, and shipment is made on the basis of requests from stores. Orders for placement of goods in the storage area and picking routes for order assembly before shipment are automatically generated in the system so that the use of warehouse space is as efficient as possible.
Implementation of the Odyssey distribution center automation system has allowed OBI to increase both turnover and the speed of warehouse goods handling. During the project Microsoft Dynamics AX was integrated with the solutions used at OBI in order to provide a unified solution from the IT-infrastructure point of view. In particular, loading of main reference books (master data) and uploading of postings into SAPFI were implemented.
