How ICA Global Sourcing Scaled Retail Operations with Sustainability in Mind

ICA Sweden AB is the leading retailer in Sweden with over 1,300 stores and a market share of approximately 33%. Aside from grocery, they also sell non-food items. Over 15 years ago, ICA opened their first sourcing office in Hong Kong – ICA Global Sourcing (IGS). With their head sourcing office in Hong Kong, they also have additional sourcing offices in Shanghai, Dhaka (Bangladesh) and Bengaluru (India). Prior to opening their Hong Kong office, they used importers to purchase goods for their retail hypermarkets across Scandinavia and the Baltics. In addition to ICA, IGS is also a sourcing partner to other retailers. One notable partner is Kesko, a Finnish retailing conglomerate with a market cap of over $8B USD. For ICA, their focus on offering variety, lower product costs with fast time to market are becoming vital to their competitiveness. They needed to scale and expedite their sourcing operations – kick starting TradeBeyond’s partnership with IGS.

A Partnership for the Present and Future

Facing an increasingly competitive retail environment, IGS wanted a solution that could scale their operations and help reduce product unit costs. At the same time, they have a strong commitment to sustainability and Corporate Social Responsibility (CSR) initiatives. IGS aims for 100% supplier audits in high-risk countries to improve labour conditions and ensure responsible sourcing.

Their main goals:

1. Scale quickly and enable their internal departments to collaborate efficiently while reducing their dependence on spreadsheets for communicating critical information.
2. Support their rigid compliance requirements while also longer-term needs when it comes to sustainability and CSR.

“The sourcing landscape changed and the work tasks also changed. We needed to have a system that really mirrors our sourcing activities. At the same time, the administration and requirements from our partners connected to the European regulations is getting tougher and tougher – requiring even more information through the systems,” said Par Nilsson, CEO of ICA Global Sourcing.

From the initial collaboration with TradeBeyond till now, there has been seamless continuity. Timely and professional support from the TradeBeyond team when it comes to platform upgrades and integrations has been crucial to them to leverage features most relevant to their business.

• Their ERP system is connected to the CBX platform, allowing them to push the requisite data for GS1 standard item synchronization.
• Their two largest partners, ICA and Kesko have their respective ERP systems (Bison and SAP) integrated to the CBX platform. This enables them to submit their POs directly to IGS through CBX.
• Inspection reports are also uploaded to the CBX platform to enhance transparency and visibility for all parties to indicate that inspection is completed for a specific PO.
• With a strong focus on compliance, TradeBeyond allows them to store and track all details for product items.
• Vendor onboarding has allowed their suppliers to operate from the same platform, reducing email traffic significantly.

“GS1 is the baseline for all the data that we need to transfer. In the old system, some of this was handled manually. With the upgrade, CBX and GS1 have a deeper connection. This has lowered our overall administration costs. We also offer quite a lot of variety when it comes to apparels, so it has been much easier to duplicate SKUs and much faster than before we began using the CBX platform.”

• Par Nilsson, CEO of IGS

The Human Side of Implementation

From an implementation and user perspective, the collaboration between the IGS IT team and TradeBeyond has been a positive experience.

“The TradeBeyond team and our main interface, Charlie Cheung, Senior Manager for Professional Services was very professional. Her team delivered on the commitments they made and went above and beyond their deliverables – offering out of the box solutions for our challenges,” said Jeffrey Wu, IT and Automation Manager for ICA Global Sourcing.

The reality of process digitization is that each company’s internal processes are unique. This complexity expands further with IGS having to accommodate the requirements from their top two partners – ICA and Kesko.

“There are multiple areas of constraint when it comes to using a supply chain platform. There are internal processes unique to IGS, processes that our partners need to abide by and of course the platform itself,” said Oscar de Frias, Sourcing Director for ICA Global Sourcing

Even with these constraints and with IGS sourcing teams and users based in different countries, they are able to use the CBX platform to signifcantly reduce their administrative workload and expedite their product delivery.

“We needed to manage a lot of ups and downs in terms of volume during and after covid. TradeBeyond’s platform enabled us to customize the system for our needs and provide some flexibility,”

How Scale and Sustainability Translates into Customer Loyalty and ROI

With the ability to offer an expansive portfolio of goods to their customers at affordable price points, they can continue to be the retail market leader in Sweden. TradeBeyond and the CBX platform is one of the reasons for this result, enabling:

1. On time in full (OTIF) of 95%, an approximate 20% improvement from before they used the CBX platform.
2. Enhancing operational efficiency by over 50%.
3. 100% improvement of visibility across supplier activities.

Internal teams (e.g., CR, QA, Merchandising) and suppliers now operate on a shared platform, improving coordination and reducing email traffic. Particularly with the use of inspection management, we have seen a significant reduction in offline communication time between IGS and vendors, as well as in production order verification and inspection data consolidation time. This improvement has resulted in an estimated 50% time savings compared to the previous manual processes.

– Jeffrey Wu, IT and Automation Manager, IGS

Looking at current trends with an outlook to the future, IGS foresees a greater need to integrate more of their supply chain processes digitally. With these enhancements, they aim to remain highly competitive in an increasingly cutthroat retail environment where consumers are the ones who ultimately determine the price and quality of products. With the advent of the ethical or conscious consumer, there will continually be a need to ensure compliance to the growing list of EU social and environmental regulations for retail products.

“While aiming to launch products within a month may be ambitious, the importance of speed to market has increased significantly in the age of social media. Rapid responsiveness to trends and consumer demand is now a key factor in staying competitive. We don’t want to lower requirements for each product but to identify what the most important requirements are so that we can expedite the process for certain categories.”

We are also facing new challenges with the Green Deal package, launched by the European Union. All retailers in Europe will need to be able to document and set up all required processes and systems to enable data validation. This can then be transferred to regulatory and partner platforms to ensure compliance.”

Par Nilsson – CEO, IGS

Their continued partnership with TradeBeyond will help them navigate these challenges. This includes further identification of relevant sourcing processes that can expedite product development and delivery as well as support for more stringent compliance requirements from the EU.

For these blue quotes, I was thinking we can put them in ‘boxes’ similar to the Salesforce examples as well as the Aftership ones.