Integrated Business and Retail Planning at Edeka

EDEKA's success is based on the interplay of around 4,000 independent merchants throughout Germany who operate their stores under the umbrella of the cooperative EDEKA network. These merchants are supported by seven regional groups of companies, which supply them with goods as wholesalers, generate space as real estate developers, and ultimately build EDEKA stores for onward leasing. The regional groups also act as a service provider, supporting the back office of the retail stores by offering a wide range of services including merchandise management, payroll accounting, data protection, and occupational safety. The EDEKA headquarters in Hamburg coordinates the cooperation of the companies within the group and develops purchasing and marketing strategies at a national level. 

Challenge: High performance for smooth planning

With around 900 stores and a correspondingly wide range of goods, EDEKA Northern Bavaria-Saxony-Thuringia processes large volumes of data. Increasing demands, such as displaying tour utilization or logistics packing densities, had overloaded the company's legacy planning system and performance was no longer sufficient for a smooth operation. The company's Excel-based planning processes had also reached their limits, with employees spending more time preparing the data than dealing with the information it contained.

Christian Zirk, Head of Controlling at EDEKA Northern Bavaria-Saxony-Thuringia, describes the problem:

"If I enter figures and have to wait several minutes for the recalculation, then working with the system is not fun. To load larger amounts of data from SAP, we had to split the data volumes and had a loading time of about 24 hours."  

Looking to overcome these challenges, EDEKA's Controlling department began to scope out requirements for a new system. The management board very quickly recognized the advantages of a different approach and approved the introduction of a new, more powerful solution for planning, reporting, and analysis.

Solution: Integrated business and retail planning in a single platform

After an intensive selection process, three vendors were shortlisted and invited to present a business case in a proof of concept. Board was selected as the solution of choice, as Christian Zirk explains: 

"There were several points that tipped the scales in favor of Board. For one, Board had the most technically mature solution. In addition to the necessary performance, Board offers features such as BEAM (Board Enterprise Analytics Modeling) for simulation and data prediction functions that enable predictive and advanced analytics based on intelligent algorithms. On the other hand, the Board team proved that they have a lot of experience in the retail sector when presenting the business case. This gave us a good feeling that we had the right partner on our side." 

For EDEKA, it was also important that Board could be installed as an on-premise solution to avoid sensitive data, such as that relating to purchasing price decisions, being uploaded to the cloud. EDEKA Northern Bavaria-Saxony-Thuringia has its own data center, which was perfect for hosting the Board solution in-house. In this scenario, IT provides the hardware, while Controlling takes responsibility for the content of the Management Information System (MIS), which is now mapped by the Board platform. 

"We have our own development department in Controlling that takes care of the technical implementation. Therefore, it was obvious that we should implement the projects using a coaching model," says Christian Zirk.  

In a coaching approach, Board's Professional Services Team supports the implementation and trains employees simultaneously, so that the company can quickly build up its own knowledge. The customer can then implement new requirements independently on the Board platform.

"Our goal is integrated business and retail planning with comprehensive reporting and in-depth analysis capabilities to ultimately improve processes," adds Christian Zirk. 

Implementation: A phased approach

EDEKA North Bavaria-Saxony-Thuringia began by setting up P&L planning and wholesale planning in Board. This was where the greatest need lay, as the previous solution had reached its limits. The wholesale merchandise management system provides data down to the individual article, allowing purchasing to be planned down to the item level. Among other things, this enables the analysis of special cases, such as breakages at the warehouse.  

Reporting was set up in parallel. There is a close exchange with the planning department, so that ideas from reporting are always incorporated into the planning process.  

Another important business area that was quickly brought into the Board platform is logistics. Here, the supply of almost 900 stores is planned. This is done at the unit or colli level. The new solution not only allows flexible and fast planning, but also provides an up-to-date view of service levels to answer questions such as "how much have the stores ordered?", "how much has already been delivered before the due date?", and "how much of the ordered delivery will arrive on the expected delivery day?" Since Board enables easy commenting on the planned figures, the stores also directly see the reasons for any delays.  

Christian Zirk is particularly fond of Board's geomap feature:

"We have connected all of the stores' POS systems. With the help of geomapping, we can effectively display the sales in the stores and regions and see where we are particularly successful. We can monitor new store openings and analyze how the new store is doing and what impact it has on other stores in the region." 

The Board project is still ongoing, with rental planning for the properties being the next phase of the project. This includes rental contract management for the stores, which has become too confusing in Excel. Investment planning in conjunction with SAP's Asset Manager is also on the agenda. 

Many new ideas and requirements have come from the 220 users so far, who are enthusiastic about the performance and the possibilities that Board offers them. Christian Zirk reports:

"Users are flooding us with new ideas. Purchasing, for example, can see the invoiced sales, which are also displayed in diagrams that can be quickly grasped. Based on this, users would like to be able to add further figures and information. Other business areas that have been moving data back and forth in Excel would like to integrate their data into the platform as well. They ask when we can connect new upstream systems. Members of the cooperative are also very interested and come up with specific suggestions on what new topics we can include." 

When asked what hurdles were encountered in the project, Christian Zirk has to think long and hard:

"It actually went and is going very well. Board is very convenient, but of course the entire structure is initially somewhat different from the previous system or SAP. You have to get used to that and adapt. However, the team at Board is very helpful. When we ask a question, we get answers very quickly. It's really a great collaboration."

Benefits: More time, better alignment, and complete visibility  

EDEKA Northern Bavaria-Saxony-Thuringia is well on the way toward full integration of business and retail planning. In particular, the new planning functionality with direct month-end closing helps the Controlling deparment to keep up to date at all times.  

"We used to prepare a forecast 4 times a year. This was always preceded by lengthy agreements with the divisions. Now we have a rolling forecast that is always open. This means that everyone has access to the current status at all times," explains Christian Zirk. 

The open forecast allows new values to be entered immediately. If a new employee or new investment is needed, this can be planned directly and the effects on the results are immediately visible.  

The monthly closing can now be created directly from the planning. Whereas importing the data for the P&L used to take 90-120 minutes, it is now done in just a few minutes with Board. The departments involved particularly appreciate the fact that they can enter their comments directly in the P&L, saving long discussions and avoiding follow-up questions as all stakeholders have the necessary information at their disposal.  

"We have gained a lot of time that we are able to put into other activities. We can now think about which new applications will help us make processes even faster and then start developing them for ourselves," Christian Zirk concludes.