Assisting the market leader in sleep products to rebuild its IT infrastructure to support growth
Askona is a manufacturer and seller of mattresses, furniture and sleep products. The company invests in R&D, developing a smart approach to the selection of products for sleep - down to the analysis of genetic predisposition to sleep better on stiffer mattresses or higher pillows. As a result, every second purchaser of sleep products chooses Askona – the brand occupies 48% of the Russian market.
In 2020 alone, sales in all product groups increased by 10% in retail channels, by 7% - in B2B channels, and by 62% - via the online store. Production of couches and beds increased by 55%. Eighty new assortment items were added, each with its own features and modifications.
Objective: to Restructure the Processes of Working with Goods So That They Support the Company's Expansion
Askona shows good expansion dynamics. However, many of the workflows were developed and implemented when the assortment and scale of production of Askona was an order of magnitude smaller, with only one plant in operation (now there are three in Russia alone). At that time a large number of manual operations was not a limitation.
Along with the business development it was necessary to change both the business processes themselves and their representation in the IT systems.
At the current scale, process modernization became an urgent need. Therefore, in 2020, Askona decided to automate work schedule planning, document processing in the EDI system, warehouse logistics, work with product information, etc. Changes in processes will be reflected in the updated IT architecture.
For example, Askona planned to introduce a PIM system to work with product information. To make the IT architecture flexible, easily scalable and updatable, the company decided to use a message broker.
The company turned to kt.team with these requests: that's how our collaboration began.
What Did We Do?
- Helped organize and enrich product cards so that it would take less time to fill them out, and the card content would be sufficient both for internal business processes and for sales through different channels.
- Automated the validation process for product cards at all the stages of their life. Production, sales, logistics, marketing, order management system, product pricing, and service management services work with the product card.
- Helped reduce coordination of non-standard orders and as a result - the waiting period for the end customer.
- Helped build a flexible, easily updated and scalable architecture to support Askona's growth.
- Helped reduce Askona's IT support costs.
Step No. 0 Understand the client's business
At first glance, on a business scale, the implementation of a PIM system is a local task: Askona's IT architecture already includes dozens of IT systems.
But this is only at first glance. Askona is a manufacturing and trading company, so all business processes related to the product lifecycle are central to it. PIM system as part of these processes also becomes one of the central elements in the IT architecture of the company.
Therefore, the implementation began with a long analytics phase. A team of kt.team project managers and analysts parsed
- how the product lifecycle is built from idea to delivery;
- how information management is organized;
- what information is needed for each of the sales channels;
- what non-standard situations have to be dealt with in online and offline sales;
- what slows down the ordering and production processes in terms of information, etc.
This process took two months. It resulted in a map of processes related to the product card lifecycle and content. In addition, we recorded processes that could be simplified and automated by enriching the product card with additional information.
Result 1. Sales became more convenient and understandable for both seller and buyer
Previously, the entire Askona assortment consisted of tangible goods. For example, salespeople at offline stores (and the company has more than 850 such stores in Russia alone) did not sell the whole bed, but two material items Bed Frame and Bed Base separately: this was convenient for production. The production received orders for the corresponding items, divided up by factories and delivery deadlines. At the same time, the seller's job was made more complicated, and the ordering process was uncomfortable for the buyer as well.
Standard case study:
A customer comes into the store and says, "I want bed X with a lift mechanism." Previously, the salesperson had to mentally decompose the order into a frame and a base with a lift mechanism, clarify which bases were compatible with the selected frame (because there could be nuances), clarify production dates for each material item, and put the order together again. The buyer had to wait until all aspects of his order could be clarified, he did not understand why he could not be offered a "normal bed" right away.
Now the salesperson has to deal with the whole product. By accepting the order, he can already see in which combinations bed X is available, and whether there are combinations with lifting mechanisms among them. He can tell the buyer how these mechanisms differ. He sees specific production dates not for each individual item, but for the bed as a whole.
Result 2. Despite changes in the sales business process, production receives an order in the form of a set of material values
The bundling of material assets into a product is convenient for sellers and buyers. But it is still important for production to know which material assets are needed to complete the order and which parts they will consist of.
Therefore, we have kept the business process unchanged from the production point of view. The item or items that go into the order are automatically "decomposed" into tangibles. The tangible value has only the characteristics that are important for production: dimensions, material type, catalog shade, etc.
Result 3. The product card contains all the information needed by internal divisions and sales channels
The same product looks different for different units. For example, an ordinary pillow
- for sales looks as follows: "pillow, pillow series, 50*70 sm, satin cover, hollofiber filling, washable in a regular machine, soft, medium height.”
- for the production division it looks like this: "the fabric of a specific article size 75 * 110, 2.5 m of specific braid, 300 g of hollofiber, diamond quilting;
- for logistics: "so-and-so article, polyethylene individual package, polyethylene group package of 20 pieces, such and such dimensions; does not require special transport conditions, stackable in up to so-and-so layers" …
There are attributes that are important for purchasing, for marketing, for individual sales channels, etc.
For each of the 45 product categories in the Askona catalog we created a list of attributes which are necessary for the company's departments. As a result, we got detailed cards with all the information for external and internal users.
Result 4. Only a product with complete and accurate information reaches sales channels
The business process for creating and enriching a product card has several stages. For example, Creating a new card, Filling in data, Available for sale, Discontinued from assortment, etc.
We have set automatic validation parameters for each status. The system checks whether specific fields are filled in and whether they meet the standards. For example, you can't enter neither "coconut coir" nor "0 mm" in the column Mattress Height, or skip this item.
Problem fields are highlighted and the card is returned for revision. And only if all the required fields are filled out correctly, the next status is assigned to the card.
Now no couches will go on sale without, for example, the specified seat depth, and the seller at the offline point will easily find the answer to the question if the specific pillow can be washed.
Result 5. The catalogs represent the entire assortment, not just basic items
Previously, the process of creating and filling in product cards was completely manual. Managers had to enter all the parameters - sometimes hundreds of values - manually into the ERP system. For individual sizes of the same product (for example, a mattress with a width of 140 and 160 cm), they had to create separate cards and duplicate data entry.
- The ERP system was overloaded with non-core tasks, while it could not provide all the necessary functionality for the management of product information;
- too much time was spent on adding new products to the system;
- errors and misprints occurred due to human error;
- items were added to the system with a delay or were not added at all. Selling them was difficult.
With PIM-system the process of adding new items and their variations is automated. Now there is no need to make dozens of cards for all variations of goods: one master card is enough. The master card is connected to the directory where sizes, fabric types and other configurable options are registered. Separate cards for each configuration are automatically generated and supplied to all sales channels.
Result 6. The approval time for non-standard goods was reduced from two weeks to a few minutes
Askona has a fairly wide assortment - 81 models of couches and 362 models of beds (including basic sizes, fabrics and fillings) are presented in the main catalog alone.
The real production possibilities are much wider. The model can theoretically be made in dozens of fabrics and custom sizes, with different fillings in the backrests and different options for armrests. But each material has limitations, for example you can not make wide armrests from fabric, sofa can be increased only to a certain length, width of headboard should be a multiple of specific number of centimeters…
Custom items account for a significant percentage of sales. How was the workflow for them structured?
A client would come to an offline point of sale and say, "I want a similar sofa, but in green upholstery, 12 cm longer than the basic model and with a softer backrest". The salesperson wrote down the requirements, said goodbye to the customer and sent the order to production division as only production specialists could answer that such a customization could be made.
As long as there were several basic models in the assortment, and total sales of sofas remained within 100-200 pieces per month, there were no problems - the production could spare time to calculate 2-3 individual orders per month.
For 2021, Askona was producing 15,000 sofas a month, and production had to check up to 20 projects daily. The queue for the production technologists stretched over two weeks, and the technologists themselves were burdened with a large amount of unnecessary work!
All this time the client waited for an answer - and not always heard "Yes, we will make your dream couch". Often the limitations were explained to him and he was offered another fabric, another size, another model or another length of sofa. But the customer had time to cool down in two weeks, and a negative answer further dissuaded him from buying.
We suggested an alternative solution: put all the possible options and limitations in the directories, and plug the directories into the product card.
Now the salesperson shows the client only the fabrics in which the model they like can be made and checks all the parameters right at the POS terminals in the presence of the client. If the perfect modification is impossible to make to the exact shade and millimetre, the salesperson can offer the customer alternatives here and now.
The tangible result as of November 2021: shorter approval times for customized orders. In the long term the number of successful custom orders will also increase due to the persuading customer during the first visit.
Result 7. The sale of services is transparent for the head office and convenient for salespeople
In addition to goods, Askona sells related services: delivery of furniture and sleep products, lifting to the floor, assembly, etc. These services were sold separately according to the price lists of the contractors who provided them, and through separate contracts. It was difficult for the head office to keep track of sales statistics for services and the relevance of service rates at each of the offline stores.
We suggested entering services into PIM as a separate product category. Type of service (for example, delivery within the city limits) acts as a master model, which, in turn, may consist of several options (delivery in Moscow, St. Petersburg, Khabarovsk...). Each option corresponds to its own parameters and its own price.
We have connected the services with goods and between themselves so that the salesperson was reminded by a trigger on his POS-terminals what he can make an additional offer to the client.
For example, the client orders a bed with a base and a mattress. The salesperson immediately sees that he can add delivery to the doorstep to this set of goods. The customer lives in a high-rise building? Then he can ask for a lift to the desired floor. The customer ordered delivery and the product is one of those that need to be assembled? Assembly can also be offered to the customer.
Goods and services are grouped into one order. The salesperson will know exactly what he sold to a particular customer.
The head office will get transparent and clear statistics on the sale of each of the services in each of the salons, and the cost of each service will be transparent and easily accounted for.
Result 8. Photos, scans, advertising materials are easy to find in the centralized repository
Each item in the Askona range is accompanied by numerous digital assets: product photos from different angles, 3D renderings, videos, certificates, awards, promotional materials, assembly and care instructions, etc. In addition, there are masses of the general marketing information (for example, on seasonal promotions), manufacturing information, information on certificates and licenses of Askona's suppliers... There are millions of files.
Previously, digital assets were distributed in different storage locations: some in company systems, some on local computers or on the corporate network. Finding the right file could take a long time and the files themselves were lost. Assets with an expiration date had to be tracked manually or information about them had to be stored in Excel files.
We used Pimcore's DAM capabilities. All digital assets were migrated into this system and organized. Each digital asset is linked to the appropriate directories, products. Finding the right file is easy, and all the necessary images are automatically drawn to the product card.
Assets that have a limited validity period have been marked accordingly: when the control date arrives, the responsible employee receives a notification that it is time to renew the certificate, update the photo on the site or turn off the advertising campaign (for example, if the contract with the celebrity has expired or the seasonal campaign is over).
Flexible and updatable IT architecture
In 2020, Askona began the process of a global renewal of its IT architecture. The company had already outgrown the scale at which it was possible to build a clear and easy-to-manage architecture with point-to-point integrations. The number of systems and integrations exceeded the critical proportion, and the course for the further development of IT forced to think about alternative architecture options.
Therefore, Askona decided to implement an architecture with a message broker in the center.
The requirements from Askona's IT department were:
- A lightweight tool;
- easy to deploy;
- easy to administer (preferably with minimal IT involvement);;
- with easy integration or replacement of specialized systems.
Based on these requirements, the Kafka message broker was chosen. We deployed the broker and integrated the standard user interface. But that was only part of the process. In total, we gave three lectures on deploying Kafka and spent more than 100 hours on tasks to configure and maintain the broker.
As a result:
- Integrating new systems requires a times less investment in IT: they only need to write the integration of this system with Kafka (work on the side of the system itself);
- Any system in the IT loop can be painlessly replaced, this will not affect the operation of other systems and integrations. The business can change endlessly, scale up, add new sales channels;
- IT specialists are not needed to find, identify, and fix messaging errors between systems. All this can be tracked by managers through the UI interface.