Salling Group A/S operates more than 1,500 stores across four countries. The organization required a powerful enterprise resource planning (ERP) infrastructure to process its nine million daily transactions.
USD 520,000 in annual savingsas a result of consolidation on the SAP platform
<2 hours of downtime in 2019thanks to load balancing capabilities and a resilient infrastructure
96% reusable hardwarein keeping with a commitment to sustainability
Business challenge story
A retail powerhouse
With more than 1,500 shops including department stores, hypermarkets, supermarkets and discount stores, Salling Group is a retail powerhouse in Denmark and beyond. The company operates 11 warehouses and works with more than 7,000 suppliers each day. Its customers can shop online or in stores, day or night. Each day, Salling Group processes more than nine million transactions.
Salling Group began with a single shop in Aarhus in 1906 and has grown by leaps and bounds in the intervening years. That kind of growth doesn’t happen without careful strategizing around everything from brand development to store locations to corporate leadership. As with any modern retailer, technology is of particular importance for Salling Group, and the company regularly assesses its ERP system. For more than 13 years, a combination of POWER, Db2 and SAP technology supported by Global Technology Services has helped make Salling Group one of the most successful online and brick-and-mortar retailers in the Nordic region.
In 2018, the organization confirmed and furthered its commitment to IBM technology when it upgraded from IBM POWER7® to IBM POWER8® servers. It took just six and a half months to move more than 70 SAP systems to POWER8, a feat that Steen Isdahl, Chief Operating Officer of Infrastructure at Salling Group, considers remarkable. “You can be impressed,” he says. “Everybody was. We were, too.”
A flexible and efficient system
Clearly, the success of the upgrade to POWER8 hardware deserves recognition, but Salling Group’s entire ERP system is equally noteworthy. In fact, Isdahl credits the organization’s 3-layer SAP model as a key differentiator for the group. The system, which runs on Db2 on POWER technology, includes SAP ERP Central Component (ECC), SAP Customer Activity Repository and SAP e-Commerce along with roughly 70 other SAP products. “Our main advantage is that we have one single picture of the truth,” says Isdahl. “Our competitors have several ERP systems, but we have consolidated everything on SAP, and that makes us 20% more efficient than our competitors.”
Isdahl cites SAP Forecasting and Replenishment, SAP Allocation Management and the Unified Demand Forecast component of SAP Customer Activity Repository with providing a particular strategic advantage because they enable the organization to replenish its stores twice a day. If an item sells out in one store, the SAP data empowers Salling Group to fluidly move inventory from other stores to meet demand. As a result, customers can rely on Salling Group shops to have the products they need.
Furthermore, Salling Group’s shops now offer a click-and-collect option that allows customers to order products online and pick them up in the store. This creates tremendous real-time demand in an industry where customers have increasingly high expectations. To date, according to Isdahl, Salling Group has a 99.94% completion rate for click-and-collect purchases.
Another key advantage of the Db2 for SAP software and POWER Systems model is capacity-on-demand that redistributes the ERP workload on an as-needed basis. That capability was particularly helpful on Black Friday of 2019, says Isdahl, when Salling Group was the sales winner across all e-commerce sites.
With such a powerful IBM infrastructure, it’s no surprise that Salling Group enjoys a strong working relationship with Global Technology Services. Carsten Holm, Head of SAP Infrastructure at Salling Group, explains: “We love working together with IBM. We have developed a strong process that’s working really well for us.”
Reaping savings and benefits
The business benefits of Salling Group’s Db2 for SAP software and POWER Systems infrastructure are wide and plentiful. One key benefit is in price performance. According to Isdahl, the decision to consolidate its ERP system on SAP technology didn’t just simplify operations. It also brought about a 100% increase in SAP Application Performance Standard (SAPS) benchmarks, which he says results in approximate savings of USD 520,000 per year.
Customers, too, reap the benefits of Salling Group’s ERP system. “We count every minute that there’s impact to our end users, 24x7,” Holm explains. “Last year, we had a little more than two hours of downtime or impact — two hours for a whole year. That is extremely impressive.”
Holm adds that the organization has gone nearly 500 days without a delay in the daily replenishment run. The run involves processing transactions from all 1,500 stores through SAP Customer Activity Repository, SAP ECC and SAP Forecasting and Replenishment and then sending figures to 11 separate warehouses for grocery distribution the next day.
Another standout feature of the IBM solution is its reusability. Salling Group has a strong focus on sustainability and climate friendliness. This includes promoting organic farming methods, reducing food waste and cutting down on the amount of plastic packaging in its stores. The fact that the organization was able to reuse 96% of its POWER stack after upgrading to POWER8 servers is meaningful to both Isdahl and Holm. “IBM is building a sustainable product group on IBM POWER. That’s very important to us,” says Isdahl.
After so many years and such positive results from its Db2, POWER Systems and SAP infrastructure, Salling Group has a simple message for other companies considering a similar setup. “If you want to have good stability and good performance, our advice would be to use IBM POWER, SAP, IBM Db2 and GTS. It’s a really strong combination,” says Holm.
About Salling Group A/S
Established in 1906, Salling Group is one of the EU’s largest retail groups. Among its most well-known brands are Bilka hypermarkets, Salling department stores, føtex supermarkets and Netto discount stores. In all, the organization operates more than 1,500 stores in four countries and employs more than 50,000 people. Salling Group is based in Brabrand, Denmark, and reported revenue in excess of DKK 59.4 billion in 2018.
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