6 August 2009

Norwegian mail order specialist Spar Kjøp was struggling to deliver an adequate standard of customer service because of a lack of integration between its business systems. A switch to Microsoft Dynamics AX saved the day.

When a customer orders from Spar Kjøp, Norway’s largest mail order firm, a Microsoft Dynamics AX system from Columbus IT 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 a yearly turnover of NOK 682 million (€76 million). It sells clothing and textiles for wholesale or private use, gift items and games, through both mail order and retail stores in Norway.

“We have 14 stores, 550 employees and different types of inventory. 40 per cent of our turnover comes from mail order,” explains Terje Nymark Olsen, Spar Kjøp’s IT manager.

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

Ultimately, the new integrated system provides us with competitive advantages in the marketplace

Tom Eide Knudsen, Spar Kjøp “Previously, reports came from different departments and the information that was available in the stores was not accessible from the mail order division. This 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,” says Olsen. “Our new system also allows us to communicate with our suppliers and partners via Microsoft BizTalk. The result is more cost-effective daily operations.”

Spar Kjøp has a warehouse that is divided into an automatic crane-handling inventory, carton inventory and picking inventory. When a customer places an order, 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.

“The communication between AX and the warehouse was an important reason for choosing it as our new ERP system. It is critical we pick and send the right goods,” says Olsen.

Spar Kjøp is betting on growth in the Internet market, and sees opportunities to increase sales through a combination of catalogues and e-business. It is the catalogues that trigger most purchases, but more people are using the Internet as their order medium because it is simpler and easier.

“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 from Columbus, each customer can always get updated information on whether our products are in stock,” says marketing director Tom Eide Knudsen.

AX at Spar Kjøp drives the entire value chain, bringing cost optimisation and providing a strong central management tool that can localise any bottlenecks.

“There were many deep evaluations behind our decision on this new system,” says Knudsen. “Ultimately, the new integrated system provides us with competitive advantages in the marketplace.”

This article first appeared in the Autumn 2009 edition of Retailspeak.

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