MAGNIT PJSC: Magnit Begins Large-Scale Supply Chain Transformation

DJ Magnit Begins Large-Scale Supply Chain Transformation

MAGNIT PJSC (MGNT) 
Magnit Begins Large-Scale Supply Chain Transformation 
 
16-Dec-2020 / 11:45 MSK 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
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: [e-mail] 
 
Office: [phone] 
 
Dina Chistyak 
 
Director for Investor Relations 
 
Email: [e-mail] 
 
Office: [phone] x 15101 
 
Media Inquiries 
 
Media Relations Department 
 
Email: [e-mail] 
 
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)