MAGNIT PJSC (MGNT)
Magnit Begins Large-Scale Supply Chain Transformation
16-Dec-2020 / 11:45 MSK
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Press-Release | Krasnodar | December 16, 2020
Magnit Begins Large-Scale Supply Chain Transformation
The Company will implement a unified automated forecasting and replenishment
system for all store formats, product categories, and distribution centers
with the help of Relex Solutions' platform. This world-class AI-enabled
software will encompass all functions of goods distribution, significantly
increasing transparency of operations and helping flexibly adapt various
processes in line with the Company's development.
Krasnodar, Russia (December 16, 2020): Magnit PJSC (MOEX and LSE: MGNT; the
Company), one of Russia's leading retailers, has started implementing a
unified forecasting and replenishment (F&R) system built upon a cloud-based
platform from Relex Solutions. It will be the largest project in Russian
logistics and one of the most extensive undertakings of this kind in the
world. The brand-new system based on AI and ML technologies will encompass
22,000 stores and 38 distribution centers and will be adapted to the
Company's continuously updated software and business architecture. By
implementing the system, Magnit plans to increase availability of assortment
in its outlets, particularly for Fresh and Ultra-Fresh categories, optimize
inventory, ensure a high level of service, and improve the quality and speed
of interaction with suppliers. The launch of the platform will require
minimal effort from Magnit in terms of infrastructure and technical support,
while rapid roll-out will ensure a quick return on investment.
The pilot project will be launched in 2021 at one of the distribution
centers in Krasnodar, which serves more than 1,250 stores.
Previously, Magnit used its own solution, which was no longer able to
satisfy the rate and quality of the Company's development process. New
system implementation will enable eliminating data misalignment, improving
end-to-end planning opportunities, and avoiding a huge number of manually
performed operations.
The unified automated platform powered by Relex uses an extensive library of
data, including information on sales, demand analysis, marketing activities,
store performance, and customer behavior across all sales channels. By
analyzing this information, the system is able to forecast the sales volume
for each product in each store with maximum accuracy and plan deliveries in
a way that fully satisfies the demand for products. The solution enables the
Company to manage the settings and logic behind the calculations, which
allows flexibly adapting them to the specifics of a particular product
group, as well as freeing up specialists by entrusting routine operations to
ML algorithms while focusing the employees' efforts on overcoming
non-standard challenges.
There will be a significant decrease in workload for business analysts and
IT specialists who maintained the old system. Magnit's forecasting team has
been instructed and retrained to work with the new software. In addition to
that, the Company is currently recruiting new employees with the necessary
qualifications. The talent pool of experts freed up due to these efforts
will now be used in other projects.
"Supply chains represent one of the key aspects of Magnit's digital
transformation. We need modern process automation tools to develop our chain
efficiently and effectively. The forecast and replenishment system by Relex
will enable us to consider and meet customer preferences as accurately as
possible and continue adapting our value proposition,"-commented Maria Dei,
Magnit's Supply Chain Director.
"Relex's forecasting and replenishment solution is optimally suited to the
scope of Magnit's business. AI and ML technologies will enable the Company
to effectively automate the replenishment processes and secure huge
benefits, both financial and operational. This is probably the most
ambitious retail supply chain transformation project that Russian and
international retail will see in the next two years,"-said Nikolay
Antimonov, Forecasting and Replenishment Project Director at Magnit Retail
Chain.
"We are extremely pleased to bring Relex's solutions to Magnit. This will be
one of our largest supply chain projects in the world. Together with our
integration partner, Ywis, we have worked out all the necessary processes at
the preparatory stage and are now ready to start the implementation itself.
We are sure that with Relex, Magnit will get huge business benefits. We look
forward to the quick start of the project and the first results,"-added
Stefano Scandelli, RELEX's Senior Vice President for EMEA&APAC.
For further information, please contact:
Dmitry Kovalenko
Director for Investor Relations
Email: [email protected]
Office: +7 (861) 210-48-80
Dina Chistyak
Director for Investor Relations
Email: [email protected]
Office: +7 (861) 210-9810 x 15101
Media Inquiries
Media Relations Department
Email: [email protected]
Note to editors:
Public Joint Stock Company "Magnit" is one of Russia's leading retailers.
Founded in 1994, the company is headquartered in the southern Russian city
of Krasnodar. As of September 30, 2020, Magnit operated 38 distribution
centres and 21,154 stores (14,699 convenience, 469 supermarkets and 5,986
drogerie stores) in 3,819 cities and towns throughout 7 federal regions of
the Russian Federation.
In accordance with the unaudited IFRS 16 management accounts results for 1H
2020, Magnit had revenues of RUB 763.4 billion and an EBITDA of RUB 86.9
billion. Magnit's local shares are traded on the Moscow Exchange (MOEX:
MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a
credit rating from Standard & Poor's of BB.
ISIN: US55953Q2021
Category Code: MSCU
TIDM: MGNT
LEI Code: 2534009KKPTVL99W2Y12
OAM Categories: 3.1. Additional regulated information required to be
disclosed under the laws of a Member State
Sequence No.: 89781
EQS News ID: 1155570
End of Announcement EQS News Service
(END) Dow Jones Newswires
December 16, 2020 03:45 ET (08:45 GMT)
