Founded in 1948, arko is the leading confectionery maker in Germany. In the 235 arko and Eilles shops, customers can satisfy their sweet tooth with pastries, pralines and artistic chocolate creations, and take a relaxing break with tea and coffee.As arko expanded, their ERP solution became outdated, and increasingly unable to support the company’s needs. The confectionery specialist started looking for an innovative, future-proof retail management system. “We were looking for a solution that would cover the entire value chain, offer direct access to all key performance indicators (KPIs) from the head office to the cash register and be easy to adapt and expand,” describes Patrick G. Weber, Managing Director at arko. At the same time, the company undertook the job of mapping its processes, with the goal of standardizing them and adapting them to the company’s future goals.
After putting a number of ERP solutions to the test, the arko team quickly settled on the LS Retail software. Within the LS Retail solution, all the functionality and processes a retail enterprise needs – from corporate headquarters, to retail store management, to point of sale – is unified into a single platform. The solution is built on Microsoft Dynamics, a fact that further convinced the company. “From our point of view, Dynamics is more user-friendly for medium-sized businesses than SAP, because it is more compact and hence more cost-efficient,” Weber explains.LS Retail partner KUMAVISION was chosen to lead the implementation project. “We felt KUMAVISION understood our business and thus our requirements best, and we found a partner we could plan with for the long term.”
The implementation was executed with an incremental approach. The first phase took place at headquarters, followed by implementation at the over 235 stores. arko and KUMAVISION trained key users and staff to familiarize employees with the new system.A project of this magnitude requires serious planning. “It was clear to us that at some point we would encounter challenges that could not be avoided despite extensive testing. It was important to us that we had a partner like KUMAVISION by our side, with whom we could find constructive solutions together, and who had the necessary commercial and consulting expertise,” Weber recalls.
Arko’s requirements went far beyond pure retail store operations.arko runs the majority of its 235 stores, while the rest is operated by franchise partners. Each of these franchise partners is considered a separate client within the software.In addition to the store chain, arko also provides supplies to food retailers. Today, around 3,500 supermarkets and bakeries across Germany offer a selection of arko products. This leads to logistic and accounting complexities. “In the food retail sector, we are dealing with shopping centers and billing companies that, for instance, have completely different requirements for electronic data transmission via EDI,” says Weber.Finally, arko also operates its own online store.Even though the company wanted to stick to using LS Retail’s best-practice processes, the complex sales setup meant that the company needed to make some adjustments to the system. The results justified the effort: “LS Retail is a true unified, multi-channel solution that provides key figures across channels in real time, and enables a continuous flow of values and logistics.”
Alongside the new system implementation, arko decided to replace all the POS hardware, too. “On the one hand, compliance with the stricter requirements of the tax authorities for POS systems was essential, but on the other hand we also saw a lot of potential for automation and thus for increasing efficiency, for example by connecting the scales directly to the checkout,” explains Weber.The company chose hardware from HP after having multiple branch employees test it for user-friendliness.The combination of HP hardware and LS Retail software has speeded up checkout processes, increasing customer satisfaction. At the same time, the ease of use of the system has meant shorter staff training times. The new system is going to increase efficiency in other ways, too. In the near future, delivery receipts and the accompanying products, as well as stock movements, will be entered directly with scanners, saving the company several man-hours.
Arko can now centrally manage its purchasing, store management, logistics and controlling. Within the LS Retail system, the head office can access all relevant key figures across the whole company, and easily manage supply and delivery. “LS Retail provides us with precise, accurate to-the-minute store inventories and sales. This newfound transparency gives us valuable insights that we didn’t previously have in this form,” explains Weber.Since implementing LS Retail software, arko can centrally maintain product information such as price information, ingredients and allergens. Any change can easily be performed at headquarters, and transmitted automatically to all the cash registers in the retail stores.
“Retail is detail,” says Weber. “With LS Retail, we have not only a clear overview of the overall picture, but also deep insights into the smallest interrelationships, which enables us to continuously optimize our customer service.”The company is planning to introduce graphical reports for each store. Store managers will be able to see at a glance which articles and product groups sell best, and use this information to optimize shelf placement.
arko is already planning further enhancements to the system. In the next stage, automatic replenishment will be introduced. This functionality, part of the LS Retail system, ensures that retailers have the right items in the right stores at all times. The system automatically creates purchasing proposals for the central warehouse, as well as logistics suggestions for store deliveries, simplifying the store manager’s work.The company is very satisfied with their decision to go for LS Retail. “Work on the sales floor is easier with LS Retail and the new cash registers. The entire flow of goods from purchasing to central logistics to the store is more transparent. With Microsoft Dynamics as the technological platform, and KUMAVISION and LS Retail as partners, we are well positioned for the future, as the new solution keeps all our options open for future expansion,” Weber concludes.