0 09 November 2011 09.11.2011 0

End-to-End Process Integration

Raises the Margin –

EDEKA / LUNAR Program

EDEKA‘S LUNAR Program: Europe‘s Largest and Most Comprehensive SAP Project in Retail

Dr. Reinhard Schütte EDEKA AG Board Member, Finance and IT

Madrid, 09 November 2011

2 09 November 2011

Agenda

EDEKA Group and Competition

3 09 November 2011

EDEKA Co-operative Structure*

EDEKA – Independent Store Owners

EDEKA ZENTRALE AG & Co. KG

7 EDEKA-

Regional Subsidiaries

Netto

Marken-Discount

NETTO

Stavenhagen

EDEKA Co-operatives

EDEKABANK

50 % 85 % 41,1 % 25 %

50 % 50 % 100 %

* Selected companies

4 09 November 2011

2010* 2009* ± %

Independent - Retail Sales 18,42 17,00 + 8,4 %

Corporate Owned - Retail Sales 8,62 9,10 - 5,3 %

Discount – Investment 11,38 10,92 + 4,2 %

Bakery - Retail Sales 0,64 0,59 + 7,9 %

∑ Food Retail Sales 39,06 37,61 + 3,9 %

Cash + Carry / Beverages 1,66 1,68 - 1,0 %

Third Party Business / other** 2,77 2,76 + 0,4 %

Total EDEKA- Co-operation (national)

43,50 42,06 + 3,4 %

EDEKA Co-operatives Sales Figures

* Billion € excluding sales tax ** Previous year gas station sales with a re-structured view

5 09 November 2011

Market share of food retail

Source: A. C. Nielsen Universen 2009

26,9%

21,0%

remaining

31,8%

20,3%

Official definition of total market according to A.C. Nielsen

Incl. food + drug markets

without spaces < 100 m²

153,120 bn € (+3,4%)

EDEKA in Germany

6 09 November 2011

Complexity of EDEKA Cooperation

Organization

• EDEKA Headquarters

• 7 Regions

• 4.500 Self-employed dealers

Size

• Size of the Group

• Number of Subgroups

• 15.085 Stores

Decision

• Traditional

• Decentralize

• Representative participation

Integration

• Fruit buying

• Wine buying

• Meat factories

• Bread and bakery production

Formats

• SM/VM-Format

• SBW

• Cash + Carry

• Discount

Assortment

• Food

• Non Food

• Cash +Carry Assortment

• Private brands

Logistic

• 39 Warehouses

• 19 Meat factories

• 6 Fruit offices

• 14 Bakeries

• 1 Wine office

09 November 2011 7

Agenda

EDEKA Information Strategy

09 November 2011 8

Building blocks of the EDEKA information strategy

SAP focus

Degree of integration

Independence of third parties

Standard solutions

Individualization

Verticalization

Business benefit

Uniqueness and limited ability

(competitive advantage)

Architectur

Processes

Benefit

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Information Strategy – it depends on the direction

… im Handel

… durch den Handel

… mit dem Handel

„The best way to predict the future

is to create it.“ Willy Brandt (1913 - 92), german chancellor

09 November 2011 10

LUNAR: What has been achieved

Agenda

09 November 2011 11

EDEKA / LUNAR Program – Facts and Figures

„LUNAR is the biggest project ever done by

SAP in the Retail segment“

>10 Mio. SAPSe

600 Server only in

Hamburg

50 TB per day and more

than 1 PB backed data

More than

100 Go-Lives

(J. Snabe, SAP Co-

CEO)

Up to 1000 employee

in the Program

09 November 2011 12

EDEKA opts for SAP in all levels of the trade: unique targeted content coverage by a single provider for a large retailer

Retail

MASTER DATA (articles, creditors, debitors, conditions)

Data Warehouse / Business Intelligence

Wholesale

Supply Chain Management

Headquarters

The implementation of the 7 EDEKA regions is like an international roll out:

Only more complicated (own data centers, own system incarnations, foreign systems connected)

09 November 2011 13

First Example: Challenging Retail Processes

Inventory Management Service Processes

Cross selling and Up selling by value added information on the scales and monitors

Ordering Processes

Personnel Planning

Paperlesss Store

Business Reports

Goods receipt

Article validation

Cash management

Returanbles

Inventory on shelves

Standard checkout

Self checkout

Tunnel scanner checkout

Pay and couponing with

mobile app

Checkout Processes

Auto replenishment direct ordering on the shelf

Mark down management

Flexible pricing by ESL

Sales price change

Sales price revaluation

Price Planning / Price Display Processes

Store Portal

09 November 2011 14

First Example: Improving the Efficiency at the store level

Reduction in time costly administration processes

• in the goods receipt area

• in the invoice verification

• in the agreement with the tax consultant

Personel Costs High staff costs reduction in stores

• in the ordering

• in the goods receipt

• in the goods receipt check

• in the shelf

Reduction of missing articles In the term of replenishment failures through manuel ordering

Lowering high stock

ranges, e.g. minimum

order quantities and

replenishment errors

Sales & Capital Costs

7 test stores in 3 regions were examinated

Quality

Information about • Goods (e.g. beverages)

• Multi stores

09 November 2011 15

First Example: Advantages of one UI in a Retail Store

Unique solution by SAP at EDEKA:

From master data, to the checkout, personnel planning

to financial accounting and the reporting system you have only one portal for all systems

Example: The portal UI and the Mobile UI are harmonized – easy to learn

09 November 2011 16

First example: End-2-End Processes with SAP Software by GK

Wholesale S

AP

Ret

ail

Oth

er S

yste

ms

Store

G

K P

latf

orm

Offline Mobile

Store Device Control

Point of Sale

Routing

Monitoring

Data conversion

Software distribution

Data provision

Data collection

09 November 2011 17

Second Example: Improving the logistical network through the SCM Platform – Solution ideas

SCM Monitor

SCM-KPI / Events Demand pool Stock pool Delivery pool

SCM optimized

replenishment

SCM Container

calculation

Delivery document

initialization

Stock determination, Availability check,

Fair-Share

Order and delivery

schedule

GR dispatching1

Tour planning and

coordination

USP control2

(Floor- and distribution units)

1 Goods receipt 2 Goods issue

09 November 2011 18

Second Example: Improving the logistical network through the SCM Platform – Solution ideas

09 November 2011 19

Second Example: Improving the logistical network through the SCM Platform – Solution ideas

09 November 2011 20

Second Example: Improving the logistical network through the SCM Platform – Solution ideas

09 November 2011 21

Third Example Information Transparency and better informations: Uniformity of the BI structure

Local

Regional

National

BI – National *

BI – EZ

EDM

GFK Nielsen, …

External

Wholesale

Retail

Headquarter

7x

7x

BI – GH/EH

09 November 2011 22

LUNAR is the basis for business intelligence

Structure and contents of master data are revised, significantly improved in detail

Unified enterprise wide administration of master data

Product related processing of transaction data throughout the steps of the value chain (e.g. fruit offices, centralized regulation)

Product related processes in the stores (e.g. inventory, sell)

Unified model (SAP BI) for data management and reporting/analysis

Consolidate all BI data of Edeka in the integrated model (e.g. Panel markets, anonymous sales figures, data from market research agencies)

Definition and introduction of first reports, e.g. supplier analysis

provides the building blocks for meaningful

analysis of EDEKA

09 November 2011 23

Agenda

Challenges

09 November 2011 24

SAP ERP

(Retail)

SAP FI/CO

SAP F&R SAP BW

incl. PDM

SAP EDM

SAP PI

External

Systeme

Store PC SAP Portal

Returnables

machines

Scale POS

Label

Printer

Mobile Store

Enterprise Server

Device

Control VBF*

Store

Hub

SAP WFM

New

Quality and innovation leadership in the Lunar program: Retail Stores are where most people are working – suggestion of the simplicity

New

New

New

VBF in an english translation means too know the inventory in a system before the SAP-Systems

has booked the audited goods

09 November 2011 25

Agenda

Outlook

26 09 November 2011

Final Remarks

1. We have a real End-to-End processes integration with SAP / GK solutions

2. We reached a new level of information transparency for increasing sales and margins (retailers have to use the knwoledge advantage about customers against dthe

We have the right solutions to transform our vision into reality

5.

3. Efficiency in the store through intelligent automatisation and supporting processes

4. New sales tactics can easily be deployed, such as coupons

27 09 November 2011