German drugstore chain uses SCM software by RELEX
With 1,950 stores across Germany, up to 20,000 products per store and approximately 50 million stock keeping units (SKUs), managing the inventory of Germany’s second-largest drugstore chain, Rossmann, is highly complex. The software used to manage the retailer’s flow of goods must be flexible and reliable, and Dirk Rossmann GmbH, partly owned by minority shareholder A.S. Watson Group, believes it has found the right solution. RELEX’s supply chain management software (scm software) will optimise the chain’s inventory while taking into account store-specific sales patterns, campaign and promotion-related effects, and seasonal fluctuations.
Rossmann’s stores vary significantly in terms of the breadth and depth of their assortment, so RELEX’s solution automatically calculates store-specific rules and forecasts. It also warns the company’s replenishment managers in advance about imminent out-of-stocks and future demand trends. This way the software ensures reliable availability even for campaign products and compensates for the fluctuating demand in Rossmann’s highly promotion-driven business.
“The system’s high degree of flexibility won us over.”
“The system’s high degree of flexibility won us over,” explains Jürgen Mattulke, Head of Inventory and Supplier Management at Rossmann. To calculate automated, daily forecasts the software uses more than 3,000 combinations of different forecasting models and a range of parameters, including sales patterns from previous years, seasonal effects, campaigns/promotions, and minimum order quantities, which RELEX extracts from Rossmann’s ERP system.
Previously Rossmann had been using two separate systems to manage the inventories of its central warehouse, six DCs, and its stores: The fast-growing drugstore chain first introduced computerised support for its warehouse replenishment in 1996. In 2000 the retailer acquired a second solution for store replenishment. In addition, seasonal items and a heavy focus on campaigns and promotions required supplementary replenishment tools, both of which Rossmann developed in-house. The company also designed a range of control systems to organise its ever-growing flow of goods.
This complex array of systems is now being replaced by a single integrated solution.
“With RELEX we’re changing the software that will be the beating heart of our supply chain.”
“With RELEX we’re changing the software that will be the beating heart of our supply chain,” Jürgen Mattulke says. “We are confident that we have found a great partner for our project in RELEX.” Together, both companies are also developing a store replenishment solution that takes available shelf space into account.
Dirk Rossmann GmbH is the second largest health and beauty retailer in the Federal Republic of Germany and one of Germanyʼs ten most important food retailers in terms of turnover. Dirk Rossmann GmbH is an owner-operated company with the Rossmann family holding 60 percent and the international A.S. Watson Group holding a 40 percent share in the company.
Rossmann health and beauty stores currently each boast an average sales area of 500 m2. They use the colours white and red for their high-quality interior and exterior presentation and feature a modern and trendsetting store construction concept, efficient air conditioning technology, bright lighting systems and seasonal window decorations.
In 2014, the 3,253 retail outlets operated by the Rossmann Group in Germany, Poland, Hungary, Czech Republic, Albania and Turkey generated a turnover of 7.2 billion euros.