Alberto Bortolin, of DATA CONSULT Sistemi Informativi, describes why the ARNEG GROUP, the Italian-based multi-national and one of the world’s largest manufacturers of commercial refrigeration and shelving units for supermarkets, chose to implement their quote-to-order sales configuration system using the XpertRule eSales Configurator. An Italian version of this case study is available on request.
What do people associate with the word “Supermarket”? A vast choice of consumer products, price wars, loyalty cards, busy shoppers, filled shopping trolleys. Very few of us however stop to think about all the essential equipment and fittings inside every supermarket we visit; which enable us to see, evaluate and buy their diverse range of products. If we turn our attention to the hundreds of meters, if not kilometres, of supermarket aisles, we can begin to see the huge variety in designs, sizes, materials, display styles, capacities and lighting: From shelving systems that display fresh and packaged food, to glass counters that display perfumes and jewellery; from racks for the in-store bakery, to racks for displaying a variety of clothes and footwear; then there are the refrigeration units; and here again there is no lack of variety; from special cabinets for displaying dairy products to self-service food counters, fresh meat and fish counters, frozen food units, … we can obviously go on and on. And of course at the end of it all there are the checkout counters, through which everyone must pass. If we think of all these examples on our next trip to the supermarket, we could certainly spend plenty of time appreciating the variety! Also we must not forget all the support equipment needed behind the scenes, for example the refrigeration cells that maintain products at the right temperature or the refrigeration facilities that link the cold storage cabinets (imagine how many thousands of household refrigerators would be necessary to store all the products of a single supermarket). All of these, and much more are essential to our ability to carry on and enjoy our everyday shopping in a supermarket. Meeting all those needs is the mission of the Arneg Group (www.arneg.it).
The Arneg Group was founded in the1960s close to the town of Padua, in the heart of the Veneto region of northern Italy and quickly began to embody the high entrepreneurial spirit of the area. Like many local industries of that era, Arneg were driven by a love of innovation, a passion for excellence and an obsessive dedication to customer satisfaction. This was combined with the willingness to invest for the long-term and the courage to confront the challenges of an increasingly global market.
In particular, the Arneg Group developed highly specialized and technologically advanced niche solutions, which managed to capture the leadership position at a global level and thus set the standard in the production of furnishings and refrigeration systems and their related services for modern retailers.
Some of the key factors in the success of the Arneg Group have been its capacity for creativity, a highly developed service strategy and an absolute dedication to their customer’s individual needs. This resulted in the range of products they offer becoming extremely diversified, thus leading to a huge number of customization possibilities from a virtually infinite number of theoretical combinations.
Modern retailers are extremely demanding, constantly changing and looking for new ways to differentiate themselves. In many cases, product quality and price being equal, supermarket customers are drawn by the quality of the shopping experience, or as some would call it, retail therapy!
Arneg employs the vast experience and knowledge it has gained of the retail industry, to respond to these changing needs by turning the diversity of its product range to the competitive advantage of its retailing customers.
As with any complex, configurable, customisable product, a crucial phase in the sale cycle is the formulation of a quote that is accurate, complete and competitive.
As well as providing accurate and definitive answers to the customer, the sales process should encourage the customer to explore variations and be presented with ideas for better alternatives. Although in most cases, the ultimate configured product can only be perfected after several revisions by the client, it’s vitally important that the first revision is viewed favourably by the customer.
Most such sale processes present opportunities, as well as risks. The risks include not producing the quote on time, overlooking a better solution, incorrectly over-pricing or under-pricing the product. Some of those risks can be minimised by submitting this process, to the small number of highly experienced experts of those products. This reliance on “super experts” can clearly lead to a bottleneck in the sale process, introducing delays and increasing the cost of creating such quotations.
A strategic decision was taken by Arneg to empower an increasing number of its sales personal, both within the Arneg Group and among its subsidiaries and distributors, which led Arneg to review its quotation system. The review resulted in a decision to replace Arneg’s existing manual quotation system with an automated, knowledge-based system, which captures and applies the expertise of its most experienced product experts.
Arneg then reviewed several software tools, solutions and quotation environments, to establish the solution that would most meet its needs. Following this review, Arneg chose XpertRule’s eSales Configurator for its powerful and highly flexible capabilities in the following areas:
Thus, XpertRule eSales Configurator represents a different approach to the problem of product configuration; rather than a pre-canned solution which would be difficult to adapt to Arneg’s needs, it provides an integrated and highly graphical development environment for creating and managing complex rules, relationships, dependencies and constraints by the experts, without the need for specialist IT skills. This provides a high level of knowledge transparency, which allows this knowledge to be maintained and extended by the same experts.
In addition to these unique knowledge representation features, XpertRule’s eSales Configurator provides complete openness, which allows Arneg to integrate it with its business databases and communication tools.
The eSales Configurator proved to be powerful, not only in implementing a complex quotation system, but for modelling the other knowledge-rich business processes. This lead Arneg to gradually expand its aims beyond the automation of the existing quotation process, to include improving its effectiveness by making knowledge available to all those employees that interact directly with the customer.
All the above considerations lead Arneg to choose the eSales Configurator to create a quotation system that is in line with the strategic aims of the group, and in particular to “knowledge sharing” both inside and outside the company.
To ensure the rapid and successful implementation of the project Arneg chose to take advantage of the extensive experience and expertise of Data Consult Sistemi Informativi, the exclusive distributor for Italy of XpertRule’s products. With more than 25 years of experience in the design and creation of integrated information systems, Data Consult was able to respond to the design needs of the Arneg Group. In many ways, Data Consult Sistemi Informativi had itself taken a path similar to that of Arneg Group. With a long track record in the successful design and implementation of information systems for manufacturing enterprises, using their MAGIA ERP system, Data Consult was aware that configuration of complex products and services was not just another ERP “software module”.
In fact, this awareness grew after several attempts by Data Consult to build and integrate such solutions, when they realized that managing complex product data and parameters was not straight forward and that there was a need to manage knowledge and not just information.
This lead to the partnership between Data Consult and XpertRule Software, guided by the purpose of using a tool to represent and manage the knowledge within the corporate information systems.
In order to ensure the best utilization of the eSales Configurator, the Arneg Group requested the direct involvement of consultants from XpertRule Software in this project. This proved to be very beneficial for the project, as well as an opportunity to share best-practices and to validate the architecture and design of the overall solution, the involvement of the tool’s vendor ensured that any new requirements that emerged during the project could be taken onboard by XpertRule Software and be included in future releases of the tool.
To this end, Arneg established the QUASAR project (QUotation ASsistant for ARneg group), which has seen the involvement of a joint team of staff coming from Arneg Group, Data Consult Sistemi Informativi and XpertRule Software.
Within the Arneg Group, the project required the involvement of staff from different areas such as product and design experts, sales personnel, EDP staff, and production management specialists.
The contribution of the Arneg Group staff was fundamental in relation to the philosophy underlying the project, consistent with their desire to bring the company expertise and know-how to the pre-sale process. This involved the following needs:
As a sign of the early participation of end-users in the project, no additional training was needed as by the time the system was deployed, end-users had already gained experience using the system.
In addition to the “core” requirement for product configuration, based on the concepts mentioned above, the Arneg quote-to-order system had to have a number of important features such as:
The degree of integration achieved was complete and seamless to the end-user, demonstrating that “hard integration” is possible and that the main challenges are more conceptual and design-driven than technical, and that the major improvement of business processes is possible without replacing the company’s ERP system.
After several months of using the system, the results were extremely positive. Uniformity among quotations, data consistency between quote and order, drastic reduction of errors and, above all, the ability to execute the full process by an increasing number of people that do not possess special technical skills are tangible benefits, in view of the fact that Arneg Group pursues continuous and synergistic improvements in all its processes, from the pre-sales to the product design, from production to quality assurance to after-sales, which together constantly improve the corporate performance.
The logical and obvious consequence of this successful project has been the emergence of ideas for further projects and the decision to pursue further development plans, to which the Arneg Group is now committed, together with its partners Data Consult Sistemi Informativi and XpertRule Software.
The most important side-effect of this project is that the concept of “knowledge sharing” is now penetrating deeper within Arneg: after starting as the means of enhancing direct contact with the customers (for the complex quotation process), it is now gradually affecting more upstream processes, and staff are becoming increasingly aware that decisions cannot be based on data or information alone, but must instead be based on all available knowledge.