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JB Hi-Fi

JB Hi-Fi accelerates efficiency and customer experiences in the transformation to cloud native warehouse management

A fundamental tenet of retail excellence is ensuring fast and reliable access to goods and services. Customers who get what they want, when they want it are loyal and more likely to return – and to recommend the retailer that gets it right.

Modern, intelligent retail harnesses data and leading-edge technology to identify what customers want, and then pull out all the stops to fulfil that desire. Modernising the in-store and online retail experience is critical – but so too are data-driven, resilient and intelligent supply chains that ensure goods and services are delivered efficiently and fast.

The entire retail landscape was being upended even before the COVID-19 pandemic struck; now, as retailers enter the recovery phase, there is new urgency among retail leaders to continue innovating and to build competitive advantage.

For the relevant retailers, managing bulky goods warehousing and distribution is akin to mega-scaled Lego construction – you need to know how to stack the boxes safely and how to access them efficiently.

The JB Hi-Fi Group wanted to warehouse their bulky goods for both the JB Hi-Fi and The Good Guys brands together, while smaller goods and appliances are sent directly to stores.

To do this the group needed a new warehouse management system to boost the efficiency of its bulky goods management and ensure that it had complete data transparency across the organisations. It also wanted a way to help optimise the customer experience regardless of whether a product is bought in-store, or online.

The three key pillars of effective warehouse management are inventory flow, management of back of house processes (including optimising goods storage), and route to market for big and bulky goods.

In addition, JB Hi-Fi Group needed its warehouse management system to be able to cope with the fact that both JB Hi-Fi and The Good Guys run their own point of sale systems and have unique stock codes. It also must integrate with other features such as the real time tracking in its freight system.

Microsoft’s Dynamics 365 Supply Chain Management platform offered an intelligent solution that met all the Group’s needs and ensured company transparency through the opportunity to drill down through data for either or both (JB Hi-Fi and The Good Guys) brands. The cloud-based platform also provides many options for further digital transformation down the track.

According to the Group Technology Director Simon Page, even with the modifications and integration required, the support of Microsoft Fast Track meant JB Hi-Fi Group was able to deploy Dynamics 365 Supply Chain Management for warehouse management in Sydney in just four months. “It’s definitely an accelerated timeframe for this type of project, but it is actually quite achievable with a modern tech stack – the fact that the core environment is cloud based, software as a service. You can integrate quickly to Azure.”

And having performed the integration upfront for Sydney, when the solution was deployed in Melbourne and Brisbane it was seamless, says Page.

Josh Bell, the Systems Delivery Lead on the project explains that the integration with Dynamics 365 means that when inbound and outbound operations occur within Dynamics 365, the event is sent in real time back to JB Hi-Fi & The Good Guys host systems. .

“We aimed to start with out of the box Dynamics 365 as possible to get the basics right. We have leveraged the OData API, custom web services and the business events platform. From an integration perspective we took the opportunity to re-platform our APIs as part of this. We were historically running brand-specific APIs on AWS and on-premise.

“We took this opportunity to re-platform the APIs required for supply chain by designing a group layer, multi-tenanted approach. Essentially, we have JB Hi-Fi, and The Good Guys who run independent system however both integrate to the new group layer services that we have built. The group services integrate to Dynamics 365 Supply Chain Management. Data egress is the reverse, Dynamics 365 Business Events are event driven and are sent to the group layer. Our multi-tenanted API layer then sends the events to the relevant organisation. Our group layer APIs reside in Azure leveraging, Functions, Service Bus, CosmosDB and Logic Apps.”

Page says that ability to establish a group layer in Dynamics 365 Supply Chain Management has been really important. “One of the things we had to do is focus on the end process that the customer experiences. All the stages that an order flows through and a delivery flows through, right from where the sales person is having a conversation through to getting it to your door, that process needed to be harmonised for both brands.

“We’ve effectively managed to do that by creating this group model, which then translates back into statuses that the host systems understand without having to rewrite all the host systems.”

That harmonisation has been important to ensure an exceptional customer experience from go to whoa, including online purchases made during the COVID-19 pandemic. It’s allowed, Page says, for a significant increase in scale while maintaining strong customer satisfaction, with still more upside potential.

The new system has boosted predictability for customers and helped to ensure that their delivery arrives when they want it.

This is possible because the streamlined warehouse management system enhances the availability and density of stock, with all metro stores are served from a single location. That means there are more delivery times available, and lower costs per delivery as well as new live tracking features.

Getting that level of efficiency is particularly important, particularly for The Good Guys where a larger proportion of revenues come from home delivered bulky goods.

According to Bell, the modernisation of data warehouse management, the ability to handle real time data, as well as to add fields on the fly has also proven particularly valuable as it ensures the organisation has the flexibility it needs to stay agile and responsive.

Having access to richer data flows from both the warehouse management system and the delivery app, which are delivered to warehouse managers through Power BI, is enhancing decision making and improving communications with service providers and customers. The company is now exploring how to create additional dashboards that surface information from the warehouse management system regarding productivity and storage utilisation.

Data delivers

Returning to the mega-Lego issue; Dynamics 365 Supply Chain Management has also allowed JB Hi-Fi Group to more finely control how it stores goods. Unlike many warehouses where goods can be stored on uniform pallets, bulky goods come in all shapes and sizes.

The question, says Bell, is; “How high can you stack fridges and do this safely on a consistent basis? You can generally stack fridges safely three to four high depending on packaging quality however with available space with bulky goods you can end up with a lot of ‘air’. We also need to ensure our warehouse team members know how high is safe to store the fridges given the variabilities that play out across the breadth of fridges ranged in the Group’s warehouses.”

Rather than input data manually to Dynamics 365 Supply Chain Management or require warehouse team members to ‘guess’ storage capacities and safe stack heights the team built a tool to manage a custom calculation on how many boxes can be safely stored, and where. “We actually automate that in real time, based on when the stack height updates. It really didn’t take long to put together at all,” says Bell.

Being able to streamline that sort of calculation in bulky goods management is important according to Anthony Feneley, Group General Manager Supply Chain who explains; “It’s a moving feast every day.” The transparency that Dynamics 365 Supply Chain Management delivers means that; “I’m confident that the foundations are there for us to be able to use that data operationally to drive and manage our facilities.” That includes both ensuring efficient storage and access to goods – but also the safety of staff as well as the 20-25 home delivery crews that might attend a warehouse each day.

One of the next areas of focus for the transformation is to optimise product picking in order to boost operational efficiency and streamline logistics, for both the JB Hi-Fi and The Good Guys brands.

Bell explains; “In terms of the data that is coming out of Dynamics 365 Supply Chain Management, we can slice and dice work related transactions to produce pick and put rates, travel time and distance, priority picks, storage optimisation, to name a few. We have produced real time dashboards that display various metrics in all HDCs.”

“We produced warehouse maps and overlayed the location bays using polygons in PowerBI. This allowed us to produce heat maps by various dimensions and measures we like, for example pick rates to see why are we picking so much from up in this far back corner and traveling the entire distance of the warehouse back and forth when we could shift that stock closer to staging?”

With Dynamics 365 Supply Chain Management in place as the warehouse management foundations JB Hi-Fi Group can focus all its efforts to ensure bulky goods are warehoused, picked, dispatched and delivered safely, efficiently and fast – and in the process ensure it remains at the forefront of modern retail.