Henkel is represented worldwide with leading brands and technologies and operates in three business areas: Laundry & Home Care, Beauty Care, Adhesive Technologies. Solutions have been implemented to automate the distribution network : order collection (pre-selling), merchandising. Implementation of the Henkel Beauty Care product recognition system using artificial intelligence.
Implementing OPTIMUM ASUMT at Henkel: a History
Henkel, which is known worldwide owing to the company’s leading brands and technology, operates in three business areas:
- laundry & home care;
- beauty care (hair, body, skin, and mouth care and perfumery products;
- adhesive technologies (glues and technologies).
Established in 1876, Henkel is the world’s leader in both consumer and industrial segments owing to such brands as Persil, Schwarzkopf, and Loctite.
Henkel’s headquarter is located in Düsseldorf, Germany. The company’s staff in different countries worldwide is over 47,000.
Scale of the project
By the end of 2009, Henkel made a decision to automate the distribution management system in the entire territory of Russia. At the beginning of bidding, the expertise in operating the Palm OS-based SFA (Sales Force Automation) was used. The platform had to be changed. At that time, the leading mobile platform in this segment was Microsoft Windows Mobile. At the final stage of the bidding, solutions from three developers were selected.
Based on what criteria the provider of the solution was selected?
- Availability of actual successful experience in implementing projects for automation of the systems for management and control of pre-selling, van selling, and merchandising on a large territory (entire Russia);
- Maximum functionality of the system;
- Option to re-configure the system functionality and new processes via a Web interface, without involvement of the developer;
- Short time and quality of implementation of the system;
- Ease of integration of the system with different external sources / data receivers;
- Start cost/functionality ratio;
- Minimum system requirements for the efficiency / cost of server and other hardware facilities;
- Estimated cost of the ownership of the system.
In 2010, the pilot project was implemented as part of which, on several sites of distributor companies, integration was performed with different accounting systems. The company’s head office was obtaining all required data from ‘the fields’. A centralized system for managing parameters, scenarios, and distribution standards was set up.
Actually the functionality was set up in accordance with the scope of requirements at the project start.
During 4 months of 2010, Optimum, the automated SFA system distributed by CDC (Corporate Development Center), was deployed in full all over Russian in 70 distributor companies and the head office of Henkel Russia.
Based on the company’s expertise, plans for development, and high standards of realization of the process, a mixed architecture was selected: a corporate cloud (centralized system) and integration with sources of master data in distributor companies.
New tasks and options that occurred in implementing the project:
- Integration with many accounting systems from different distributor companies distributed over a large territory and absence of sufficient IT resources;
- Guaranteed completeness and quality of the unparalleled large amount of transmitted information that is critical for current management of entire business;
- Unified structure with remote access of all involved Henkel employees;
- Global and information reports for Henkel employees of any level.
Also, it was required to obtain actual assessment of the quality of the services provided by distributors to the retail network and collect complete and updated current information about the state of own brands on the shelves all over Russia, and to ensure end-to-end and objective control of sales representatives’ compliance with Henkel’s standards.
Additionally, in the process of implementing the project, a need in powerful analytic instruments occurred. The main problem of this subproject was that the budget was very limited and the requirements for efficiency (immense amount of data from all over Russia, from the entire distributor network, and flexibility) were very high. There are three, most frequently incompatible, parameters. Since this was not included in the initial project requirements, a separate bidding for selecting the analytics module was conducted. As a solution for the problem the CDC Group proposed the OLAP module integrated into the Optimum mobile platform and the solution was selected as a result of comprehensive analysis.
Results of operating Optimum SFA from CDC Group (Corporate Development Center):
- The number of sales representatives was reduced by 20% while the amount of sales significantly increased all over Russia;
- All required information about compliance with standards and distribution processes is received in virtually online mode to the head office of Henkel Russia via SFA owing to which the company was able to abandon expensive services of information collection agencies.
Direct yearly saving with account of all investments and operation costs is over 100 mln rubles.
In addition, Henkel now has available:
- global and informative reports for employees of all levels;
- objective assessment of the quality of services provided by distributors to sale outlets;
- updated information about the situation with own brands on the shelves all over Russia;
- a system to control compliance of sales representatives with the company’s standards;
- analytic reports in the current state of distribution of own brands;
- analytics for previous periods;
- comparison of sales with a breakdown by periods;
- visualized and informative charts and dashboards for top-level managers;
- an option for periodic and user-friendly distribution on different reports in automatic mode for employees of different levels.
The plans for 2014 include:
- extension of the functionality to supervisors;
- extension of the functionality for palling and supervising training of mobile agents;
- achievement of new educational standards;
- development of the system for planning sales on the basis of Optimum SFA;
- further development of the reporting system as an efficient tool in competition.
In 2014, based on Optimum SFA, it is planned to development the functionality for custom relation management owing to which Henkel will enhance its position in all retail segment from small shops to network client and major global retailers.
Reference of Schwarzkopf & Henkel on operations with the Optimum system and cooperation with the CDC Group
Our company's main policy is the focus on consumers. In distribution of Schwarzkopf & Henkel products in Russia via a distributor chain we arrange our activities in such a way that ensures obtaining comprehensive information and controlling activities of partners in accordance with the company's pricing policy, supervising operations of exclusive teams of sales representatives, and facilitating growth of their efficiency.
The expansion of the distribution chain involves problems in relationships with our business partners that are connected with significant distances from the Schwarzkopf & Henkel head office and human errors, in particular, in reporting. These factors reduce the efficiency of joint efforts of the manufacturer and distributors.
The distributors, which are mainly represented by 'multibrand' companies, increase their customer basis on a day-to-day basis and, respectively, the load on sales representatives, operators, and warehouses also increases.
Having analyzed the market situation, we decided to implement an automation system. In 2004, CDC won the bidding and shortly afterward the project for implementation of the OPTIMUM automation system in operations of distributors and Schwarzkopf & Henkel head office started.
Our distributors' sales representatives can now collect information in sales outlets in a rapid and efficient way having access to updated information about availability of products at warehouses. They can now serve each client on a basis of an individual scheme without wasting time (and eventually money) for search of price lists and making decisions regarding granting of discounts, since all required, and no less important, updated information is available the sales representative's PDA.
One can find on the marketplace many systems with functionalities required for sales force automation. BUT it is the solution offered by CDC that contains powerful and efficient distribution management mechanisms that we strongly need as a manufacturer.
When deploying the system in the chain of our distributors, we have found out that all of them operate different corporate information systems. Our CDC partners showed that this is not a problem since the OPTIMUM system is compatible with any accounting system operated by the customer, including 1С, BEST, Monolith, Domino, and distributors' proprietary products developed on the basis of Oracle, etc.
Currently the system is operated by more than 600 sales representatives at more than 50 sites of the Schwarzkopf & Henkel distributor chain.
After having started production operations of the system, we were able to dramatically streamline our efforts on efficient distribution of products in the manufacturer -> distributors -> distributors' affiliates -> clients chain.
Our experience shows that Optimum can fulfill any goal we set and provides unquestionable advantages to our company and our partners.
Distributor's Operation Head, Schwarzkopf & Henkel Russia