Breuninger is optimizing the order process using a Distributed Order Management system

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TL;DR

The Challenge

Breuninger’s premium fashion and lifestyle business relies on a distributed fulfillment network spanning multiple logistics centers, 13 stores, and marketplace partners. Customers expect complete and punctual deliveries, but goods are not all held in one central warehouse — some items may only be available in a specific branch or are currently in a returns process, making reliable order fulfillment a complex challenge.

Our Approach

INNOQ built a Distributed Order Management (DOM) system as part of a dedicated order management and inventory vertical. The DOM acts as a central decision engine, determining which location handles each order, tracking inventory availability across all sites, and using data science methods to accurately forecast delivery times and intelligently consolidate or divide shipments.

The Outcome

The DOM fulfilled orders successfully in over 80% of even rare no-find cases, and at least 90% of orders were delivered on time or ahead of schedule. The investment has already been amortized through the high order fulfillment rate.

Results at a Glance

• No-Find Resolution: Even in the relatively rare no-find cases, the order is fulfilled successfully in 80% of cases without the order being negatively affected or the customer noticing any problems
• On-Time Delivery: At least 90% of orders are delivered on time or even earlier than announced
• Lockdown Resilience: The Pick-from-Store function allowed Breuninger to sell stock from 13 branches during the lockdown and grow e-commerce beyond plan
• Smart Consolidation: Orders are intelligently consolidated or divided to optimize sustainability and delivery efficiency
• Rapid Scalability: The new goods services center and its logistics system were integrated smoothly and without interruption to ongoing operations
• Amortized Investment: The investment has already been amortized through the high order fulfillment rate

The fashion and lifestyle company Breuninger is known for its premium collections. All the more important it is then to offer its discerning customers an optimal shopping experience – whether in-store or online. From the anticipation of a visit through to the delivered product. INNOQ was already closely involved in the transformation of the webshop breuninger.com – launched in 2008 – into a proprietary, high-performance, and scalable e-commerce platform. The focus now is on continually optimizing the topics of order management and inventory within the customer journey by means of a dedicated team and a new vertical. What exactly this means is described by the following example:

A customer orders a T-shirt, a pair of shoes, and a shirt online. Now precisely this T-shirt, these shoes, and that shirt in the ordered sizes and colors must reach the customer quickly and at minimum cost. The specific challenge for Breuninger is that the goods are not all kept in one central warehouse. Rather, for example, the T-shirt is only still available in one of the branches and the shirt is not kept in stock by Breuninger themselves but is to be sent to the customer by an incorporated marketplace partner. A functioning fulfillment network is therefore required in order to successfully process the entire order. And ultimately to ensure satisfied customers.

Advanced-Level Fulfillment

Multiple logistics centers, 13 Breuninger stores, partners incorporated via a marketplace model, delivery service providers, etc., etc. – a wide range of stakeholders and software systems have to work hand in hand for an optimal order process. A DOM was therefore developed for the order management and inventory vertical. DOM stands for distributed order management and is a central system for the fulfillment of orders. Put simply, it decides which location and which system is to manage the order. However, as the above example shows, a lot more complexity lurks behind an optimal fulfillment process. If for example the ordered T-shirt is not available in the central warehouse but in both the Stuttgart and Düsseldorf stores, the system can select a location based on economic factors: Where does the article sell better? Where is there more free capacity to find the shirt within the store and to dispatch it? It may however be the case that the article is no longer available in a warehouse or in a store but is currently in a returns process. In this case the order can still be fulfilled, but possibly not until a later point in time and thus in a separate delivery.

So the system continually maintains an overview of which articles are available where and when. In this way, not only can the order process be managed, but also the delivery times accurately predicted. But whatever the order scenario, customer satisfaction always has top priority. Promises must be kept as best as possible. Customers should always be kept informed about the current status of the order. And any problems need to be resolved without the order having to be canceled – something that would be dissatisfactory for both parties.

Three Values for Satisfied Customers: Integrity, Punctuality, and Sustainability

An order is always simplest when all the ordered items are available in the online warehouse and can be dispatched according to plan. In the case of orders that are however not available in the online warehouse, the items have to be found within one of the stores. In practice however, it is sometimes the case that an article cannot actually be found in the store. This can happen for example when there is only one of that item left. It is therefore an important task of the DOM to resolve such cases by requesting the article from a different branch. Even in the case of the relatively rare no-finds, this now succeeds in 80% of the cases without the order being negatively affected or the customer noticing any problems.

The success rate of the delivery speed is even higher, although the majority of the delivery time is dependent on the delivery service providers: At least 90% of orders are delivered on time or even earlier than announced. An important factor here is accurately predicting the delivery time from the get-go and communicating it during the order process. The system knows where the articles are located, how high the order volumes are at specific times, what logistics are involved, and what the typical delivery times of the parcel delivery companies are. On the basis of this data the DOM calculates accurate forecasts with the assistance of data science methods.

At the moment the team is working on a further feature: Intelligently consolidating or dividing orders. For example, articles from multiple orders are consolidated into a single parcel when the same person places multiple orders to the same address within a few hours – without the delivery being delayed. Where orders are to be divided, for example because one of the items will only be deliverable at a later point in time, the following rule applies: As many deliveries as necessary, as few deliveries as possible. Because sustainability considerations such as the reduction of waste and CO2 emissions are also part of a positive shopping experience.

Flexibility at the Right Time

A particularly positive advantage of the DOM came to light in March 2020, shortly after go-live. When all the stores had to close during the lockdown and the number of orders in the online store increased disproportionately, Breuninger was able to react to this unusual situation immediately. By means of the „Pickup from Store“ function, a large proportion of the goods in the 13 branches could be sold and the increased online demand met.

Breuninger benefited twice over from the logistical fusion of online and store stock. We could grow the e-commerce field by more than planned. And at the same time we were also able to sell the stores’ stock despite the branches being closed due to the pandemic.

Dr. Frank PostelCTO, Breuninger

Ultimately, such flexibility is always a decisive factor in guaranteeing and increasing both customer satisfaction and profitability. As the system can integrate multiple distribution centers and logistics partners, the introduction of the new goods services center and its logistics system could also take place smoothly and without any interruption to operations.

High Efficiency through Real Teamwork

A small, agile team is responsible for the development. After a two-year project phase, the team is now in the product phase, in which the system is continuously improved. The team consists of a product owner and three internal plus two INNOQ engineers, some of whom have been involved in the development from the very beginning.

The special feature: All team members are full-stack engineers and work with the Remote Mob Programming method. Everyone does everything, which means that from backend to frontend, from infrastructure to data analysis, everyone can work at all levels, thus avoiding unnecessary delays. And all work together on one thing: Every day the whole team is in a virtual Zoom room and together implement one feature after the other. This method of working also leads to a high level of affinity with the product. As a result, many new ideas for features and solutions come from the team itself, as both problems and potential can be spotted early on.

The Technical Highlights at a Glance:

• Java / Spring Boot
• Kubernetes
• Apache Kafka
• MongoDB
• Data exchange via event feeds
• Data analysis with Google BigQuery