Nebim – İpekyol: A Success Story
Nebim V3, the New Technology in Fashion Retail
The collaboration between İpekyol and Nebim is not merely an ERP Project, but includes clues to the new generation codes of contemporary retail approach. It is also significant for the momentum of the sector thanks to the information technologies. Nebim, the leading local software company with its enterprise resource planning solutions for retail, wholesale and manufacturing companies, increased the number of its success stories. İpekyol, one of the leading companies in ready-to-wear apparel, has preferred the solution Nebim V3 ERP.
İpekyol General Manager Uğur Ayaydın
What was the impact of the Italian partnership? Was there a change in your areas of investment?
Our Italian partner transferred their retail business management experience to us. They shared their considerable know-how regarding stores, price strategy, collection structure and similar aspects with us and we started to implement them in the best way possible.
What are your targets for 2012?
Our aim is to increase our growth rate of 2011 by diversifying products in 2012 as well. At the same time, we work on our operation infrastructure that will support our stable growth targets. Even though the first three months of the year present us with a favorable graph, I think the second quarter is extremely important to observe what lies ahead.
Necdet Ayaydın, Member of the Board Directors, İpekyol
Sedat Taşçı, General Coordinatör, Nebim
Uğur Ayaydın, General Manager, İpekyol
Sevket Çelikkanat, IT and Logistics Director, İpekyol
Yalçın Ayaydın, Chairman of the Board of Directors, İpekyol
At İpekyol, what is your vision and mission for the development of the retail sector?
İpekyol wants to continue its mission of being a pioneer brand, which has been the case for many years now. We would like to be a complementary part of every moment of the life of the contemporary woman. This mission is supported by quality production, contemporary design and social responsibility projects. As a company that supports sustainable growth with the operation infrastructure, our vision continues to be becoming an international brand that is used by women of all ages, and at every corner of their lives.
Thinking about the vision Turkey 2023, what kind of changes do you expect in the retail sector? At İpekyol, how do you plan to contribute to this vision?
It is obvious that the total retail market in Turkey is going to continue to grow. Additionally, we foresee that e-Commerce is going to accelerate and grow. We expect that e-Commerce is going to expand with smart phones and similar mobile systems, and service is going to gain importance, and the customer relations management is going to be the differentiating factor.
‘If we would ask you to define technology with three words, what would they be?
Productivity, Future, Difference.
In previous years, not only your production company, but also your İpekyol, Machka and Twist brands were separate entities. At the beginning of 2012, you brought all your companies together and are now two companies, along with your production company. How did you manage the transformation process? What kind of difficulties did you have to face?
The merger took place parallel to the ERP project. Both of them had to finish at the same time. It was a risky undertaking. We had a plan B ready, just in case. But the transition took place without any problems. All steps of the project were laid out and monitored in detail, up to the modification of the electricity contract.
When you collaborated with the Aralık Association, you sold specially designed t-shirts in your stores in order to support women’s shelters. Will this project continue? What kind of projects are you planning as part of social responsibility?
Together with Aralık association, we have successfully concluded a project and built a workshop in Van in order to give vocational training to women. All the products that they made in that workshop were sold in our stores and all income was given to them. We transferred what we got from these women to these women. This was a project in accordance with our mission. At the moment, this project has already finished. But our institution will continue to participate at social responsibility projects as they are an indispensable part of corporate culture.
İpekyol IT and Logistics Director Şevket Çelikkanat
In which phases did you assess the project?
True to the classical approach, we carried out the current situation analysis, fit-gap analysis, conceptual design, development and testing processes, and assessed every step. As we had been through an ERP implementation process recently, we made use of this experience and designed our analysis process documents at a much earlier time. This functioned as our guidance.
How did you determine your priorities in this project?
As with every business, the critical business steps constitute the priorities. For us, these were the uninterrupted functioning of POS operations at the stores, problem-free continuation of the deliveries and the continuity of our production operation, in that order.
What was the role of key users during the ERP project?
Key users are the real key for the success of the ERP project. ERP is a business project. The business must be described in the best way so that success can be achieved. In my projects, I have always tried to emphasize this. The best description of a business is related to the simplicity of that business. In the ERP projects, companies first must take a look at their processes and achieve simplicity. The productivity of a company can only be increased through this way. When we look at it from this angle, key users should be selected among those qualified employees who know best what they are doing and who can suggest improvements, and who can test the pilot system and decide if it is appropriate. In our project, we used our best recourses. They showed great commitment. A key user team of 24 persons participated actively at the project.
In your opinion, how should the analyzed processes be tested? How did you move forward during this project?
Unit testes are carried out all the time. Nevertheless, it is a must to create and carry out unit tests that are going to compel the system. All possible scenarios that one can encounter in real life must be tested as far as possible. Even though documenting all these scenarios looks like an additional hassle to the testers, this is very beneficial. Even so, what is more important than unit tests are the end-to-end tests that include a process from beginning to end, including procurement, production, sales and accounting. This is what the “business” actually is.
According to your experience regarding this project, where should a company start when they are going to change the ERP application?
They absolutely should start with re-evaluating their processes. An incorrectly designed process cannot be expected to be corrected by another ERP. Each ERP project should be seen as an opportunity to describe the “Business” again and in a sense shake the companies.
Why do you prefer outsourcing storage and logistics activities?
We are a company that designs women’s ready-to-wear apparel and that displays and sells the products of our three brands in our retail stores. This is our main business. Our aim regarding the logistics process is that our products are stored in a fit manner, and that they are delivered to the correct place at the appropriate time. Nowadays, to carry out these operations personally is not necessary anymore, as there are successful and experienced third party service provider companies available. Also, to manage all operation orders through the integration of systems by using an outsourced service creates a logistics management discipline within the company. This contributes to the productivity.
How do you evaluate the integration between the ERP and the logistics company?
As in our country the third party logistics operations and ERP structures are much more recent than in developed countries, there is no established EDI or similar integration standard. The middleware used for the integration between companies is not very common, either.
Therefore, the coding of the integration is managed as a sub-project of the actual project and ERP. With the operation steps ASN and Delivery Order added to Nebim V3 ERP, the necessary base for the integration has been created. Thanks to the Advanced Shipment Notice, the products that are going to arrive at the logistics warehouse are entered into Nebim V3 ERP and the logistics warehouse is notified electronically. Following this, the actual amounts of the products arriving at the warehouse are transferred from the logistics company to Nebim V3 ERP electronically and a comparison is made between these amounts and the ASN. In case there is a difference, a difference slip is created and saved in the ERP. Therefore, one achieves accuracy regarding the products entering the warehouse. The difference slips are queried by a different department. With the delivery orders, the logistics company is electronically notified regarding the products that are going to exit the logistics warehouse. These notifications include details such as the delivery dates. When the products arrive are the stores, they are duly accepted. In this manner, we have achieved a high rate of accuracy regarding deliveries and product acceptance at the stores. Even though this is one of the most difficult and time-consuming parts of the ERP project, I find our current situation successful.
Are there any areas where your workflow application works in an integrated manner with Nebim V3?
The delivery operations between our stores are carried out through our workflow application. This is a very important process for us. The stores enter their product requests with this application. When the corresponding stores approves of the request, the delivery order between those two stores is created on Nebim V3 automatically. What remains to be done is just to transform this order into a delivery slip and to deliver. Of the same application, we are going to integrate the work flows of cost management and leave management with Nebim V3 as well.
Your stores work online. What do you do when you encounter connection problems? Do you have any suggestions regarding this?
Connection problems are encountered for very brief times. In our new stores we have started to use 3G routers. During possible ADSL cuts this connection automatically starts and the work flow is not interrupted.
Through which processes do you move the products?
All the steps of Ordering-Reservation-Delivery Order-Packaging-Dispatch Slips are being monitored at the deliveries from our main distribution center. For the Orders and Reservation processes, we use the Product Allocation application in Nebim V3. With this structure, we carry out the preliminary distribution and the daily product replacement transactions. The most important feature of Nebim V3 Product Allocation application is that we can define our own allocation rules. Later, each package that leaves the distribution center with the delivery orders is created as a package in Nebim V3. Information such as the type of the package, the content, its weight is recorded in our system. Our stores also receive them based on packages and the differences in number are recorded.
When coding the products, which functions of Nebim V3 do you use?
On the product card, the common features of the product as well as the variable features depending on color are managed separately. Additionally, with the grouping that we call “the theme”, all products in the collection are grouped together. The features of that collection are managed under the definition of “the theme”. Reports with photos are obtained according to these definitions. These structures provide us with the flexibility to manage data without the need to multiply, so that writing the data only once is sufficient. The hierarchical order, on the other hand, is a valuable and indispensable information structure for the planning infrastructure as well as managerial accounting.
During the life cycle of the product, in which phase is it created in Nebim V3?
Managing commercial products and managing manufactured products are different from one another. Products opened as planned products are developed in the process both in the sense of design and cost analyses. The approved products become actual products and the production orders and procurement can start following this phase.
How do you use Nebim V3 in your procurement processes?
An important part of the procurement process consists of product development steps. We use the pre-order structure for price management and evaluation. When the decision is made, the pre-orders are changed into actual orders. When the delivery from the supplier takes place, the ASN document is created in our system and we monitor the delivery without waiting for it to arrive at our distribution center, from the moment it starts its way.
How long have you been using Nebim in your stores?
We can say there hasn’t been a time when we haven’t.
How did your users in the stores evaluate the Nebim V3 POS application?
Nebim V3 POS is a much more flexible and user-friendly product. We have recently started using touch screen devices in our new stores. We observe the benefits. With Nebim V3 POS, there is also the possibility of creating more effective campaigns at the stores and monitoring the performance of these campaigns.
Except the sales and returns, which other processes to you keep track of on Nebim V3 POS?
Alteration process is an important subject that we manage and that we think of improving. Also, the down payments are always active. Additionally, we carry out the corporate sales operations.
In your opinion, what are the important aspects of store trainings? In which phase of the project should store trainings be given?
Without the training and the preparation, it is not possible to decrease the difficulties presented by the transition. As stores are at far away locations, they cannot receive support as easily as a user in the headquarters. We gave at least two persons from each store applied trainings before going live. Using a notebook set that we had prepared, we summoned the store staff to certain locations in the country and made these trainings. When our staff returned to their own stores, we asked them to do on a test setting all the POS operations learned the day before. We carried out these tests for a long time so that they all get used to the system.
Does your team use Nebim V3 for Accounting and Finance Management?
Yes, Nebim V3 is being used with all its functions. Not only the classical accounting and finance management, but also management finance is done with Nebim V3. We want to start using financial budgeting within this year as well.
What are the restrictions arising from having a foreign partner?
By integrating the Miroglio system and Nebim V3, we transfer all of our sales operation data. We prepare our reports according to Miroglio’s standards. The important aspect here is the cost allocation and the speedy closure of the periods, and we are doing that faster with Nebim V3. An important structure that we have developed together and started using in 01.01.2012 is the cost center analyses. As the ERP structure is auditable and open, it facilitates all kinds of inspection for us.
What are the benefits of production with barcodes for your company? At how many points do you collect data with online scanning?
Monitoring the production via barcodes is an effective technique for traceability. At the same time, mistakes are minimized because the repeated scanning is prevented. We monitor the production with barcodes at every production point in the factory.
Which steps at the factory have you targeted with operation productivity applications? How beneficial were the tools offered by Nebim for reaching your targets?
The productivity of the workers and their comparison with the standard times provides us with the necessary decision support mechanisms for the company to be more productive. This way, better standard times and more productive manufacturing is achieved and the reflection can be observed in the production costs. Operation productivity data is also used for the calculation of actual costs and the production costs reflect the actual man – hour.
What do you do regarding Procurement Management? How did you implement “Fabric Quality Control” and “Fabric Roll Fault Monitoring System”? What was the aim of the project?
The quality control system on the Nebim production module was implemented with industrial touch screen PCs integrated to our fabric quality control desk. The fault on each fabric roll is recorded through this system and the rolls are labeled with barcodes. With the data taken from the quality control program, maps of roll faults can be created.
Regarding the project management, what is your opinion about the harmony of the processes at the factory with the processes in the program? To what extend did the applications cover your processes? If there are any, what were the deficiencies or what was too much? How long did it take you to be ready to implement?
Nebim production module is a vertical solution created specifically for the business needs of ready-to-wear apparel manufacturing. Therefore, the infrastructure was already there for all the needs mentioned. Some additional aspects were added regarding Product Lifecycle Management. Different structures were embraced on the subject of anticipated costs.
In your opinion, which ones are the most important aspects to be monitored at the factory? With which Nebim applications do you monitor them?
Especially the production orders. With a single work order, all colors and sizes can be monitored together. The bar-coded production and productivity applications were systems that we already had. These applications were reevaluated and rendered more productive together with Nebim. The cost calculation and fast reporting were vital for us, and we collaborated with Nebim nicely here, too.
Could you expand on the monitoring of actual costs? What are the predominant issues regarding the costs in a system that functions with a lot of models bearing color/size details?
Cost calculation is especially difficult during textile production. The number of produced items per model keeps decreasing in the factories. This issue not only pushes the productivity into difficulties, but also increases the data to be collected for the cost calculation. We thought it would be more accurate to calculate the costs based on model level and not on color and size detail. We don’t think that this will provide us with a managerial advantage. In addition to the direct material and subcontracting costs, the direct and indirect costs of all production steps can also be calculated based on the actual man-hour costs according to operation productivity data.
As a last question, what are your new project targets in connection with Nebim V3?
Among the projects that we have recently started to implement are Merchandise Planning, Business Intelligence Dashboards and the integration of Nebim V3 ERP with our e-Commerce structure. I am fully convinced that in the upcoming periods we are going to create new success stories that will have a pioneering role for the sector.