KinHom

As the leading furniture brand in China, KinHom has achieved one miracle after another in the industry since its establishment 12 years ago, continuously creating new marketing practices for the industry.

Since KinHom initiated the hypermarket model from its establishment, it opened 300 chain stores branded KimHom or Xiang Jiang Furniture in almost all the medium and big cities in the six zones of China. Now it's the real leader in the industry. KinHom achieved the several records in the history: the 1st furniture brand issuing promotional ads on the main-stream newspapers and magazines; the 1st furniture brand developing B2B and B2C models of e-business to play a pioneer role in the industry again.

KinHom Furniture
Creating another miracle by improving efficiency

In the view of rapid business growth and complicated even fierce competition, KinHom's self-made management system was not capable of answering the needs of enterprise progress. To implement the management revolution by adopting the most mature and comprehensive ERP solution, KinHom chose SAP with no hesitation, because SAP is the worldwide leader and stands for the most advanced enterprise management intelligence.

SAP - KinHom's successful choice with full confidence

It's original for KinHom to choose SAP solutions in the conventional retail industry.

"The best enterprises in the world have made it. We can make it, too." said Ms. Zhai Mei Qing, President of Xiangjiang Group and Board Chairman of KinHom Group, "Now KinHom covered the six zones of the country and owned over 300 retail stores. Our group also fulfilled the CIS (corporate identity system) introduction, VI (visual identity) integration, procurement centralization by operation headquarters and distribution centralization by logistics hub to enhance the management system of chain stores. Two years ago, KinHom Group invested a lot to found a KinHom e-business Company and set up the biggest furniture e-business website in China - Furniture China (www.jiajucn.com). Thus, today when business continuously grows up, we decide to use the worldwide leading solutions from SAP which is most qualified to stand for advanced management intelligence." All is in the same reason that SAP solutions are most suitable to the complicated situation of furniture retail industry.

SAP solutions are running well in the 400 enterprises of Fortune 500 in the world. Meanwhile, there are a lot of successful experiences in retail industry. All of these facts lay a foundation for cooperation between KinHom and SAP. PhD Geng Jun, Project Leader, Vice President of KinHom Group and CEO of KinHom e-business Company expressed with full confidence, "When we chose solutions, we did not only pay attention to the experience of SAP solutions running in the worldwide big enterprises, but also considered its localization level. SAP's perfect localization was the trigger to our choice. Meanwhile, our technical team was to work on further development of solutions together with SAP experts in order to make them more suitable to KinHom and other furniture retail enterprises in China."

(Highlights)
"When we chose solutions, we did not only pay attention to the experience of SAP solutions running in the worldwide big enterprises, but also considered its localization level." said PhD Geng Jun, Vice President of KinHom Group and CEO of KinHom e-business Company.

Sufficient communication and preparation paving the way for success

With thorough investigation and carefully considering all aspects, after adopting SAP solutions, KinHom selected Novasoft China from Germany, an european top-class consulting company as implementation consultant. In the early phase of cooperation, the expert team from Novasoft started with initial contact and training for the ERP team members who are sales experts from various departments of KinHom Group or technical proficients from KinHom e-business Company.

The members of KinHom ERP Team were all able-persons selected from the whole group. Ms. Zhai managed the ERP project in person and turned it into a real "leader's project" with great support from preparation, selection to implementation. Tang Jie, Zone President of SAP South East China highly appreciated KinHom's preparation, "It is hardest for enterprise who wants to run ERP solutions to obtain the attention from management level and do a good communication job. Gratifyingly, KinHom did the great job on the above two points." Due to great efforts, collaboration and communication of SAP, Novasoft and KinHom, KinHom's SAP project launched successfully on 1st December 2002 after only 7 months of implementation which consisted of main data input, suppler chain management(serving sales, procurement, inventory management, automated supplement, distribution, promotion, commission sales, retailer recruitment, etc.) and finance control, and covered KinHom's retail stores, procurement, central warehouse, finance department, lease department, marketing department and goods department. The success of the project was not only the milestone of KinHom's IT revolution but also SAP's breakthrough in Shenzhen retail industry.

Creating new wonder by improving efficiency

Launch was quite hard but ended with obvious and outstanding effect. Doctor Geng commented, "Many things could be impossible without SAP solutions. For example, now finance department can control every process. When it wants to know any process, it never needs to search for a lot of original documents as usual."

The situation that finance control depends on original documents has gone for ever. Moreover, now detailed records are saved in the system which enables finance department to control clearly the status of procurement, pricing and department issues. "It’s because the whole billing and settlement process is shown clearly in the system." SAP solutions also show great strength on the settlement with suppliers. It was impossible to settle upon real situation before. Suppliers might ask for settlement even when their goods were not sold out but finance department might not know the fact and had to make the settlement on a 15-day basis. Now it's different. We may tell suppliers clearly about sales report printed out by the system. Settlement is only available for those sold out.

Before launch, only in Shenzhen were there over 60 staffs of finance department. After launch, this number is reduced to 10 plus with a big saving on human resource. Supplement process is also realized and controlled upon real situation directly by the system. Therefore, "the saved human resource amounts to 60 at least and 200 at most."

"Besides finance, inventory management is not ignorable as well", said Doctor Geng, "only after launch, central warehouse really works." SAP solutions played the role of joint band to integrate finance, sales and inventory and reflected the real situation and real-time information of every process, breaking the isolation of respective departments in the past." At present, the inventory turnover has been improved just 100% than ever. Furthermore, KinHom is able to see a return on its investment in 2 years!" Doctor Geng has a lot of confidences.

According to the project schedule, the 1st stage is to integrate the procurement, logistic and inventory system of KinHom Shenzhen central store, Group Headquarters and respective zone central stores, 30 retail stores in Guangdong province into the system while the ERP system of the first 5 KinHom chain stores is to be launched. By 2004, all of KinHom chain stores will be on line. In the next 5 years, KinHom will set up 300 chain stores to maintain the leading position in China and fight for top 2 ranking in the world. With support of IT innovation and improvement in efficiency, KinHom will grow freely and quickly on the way of globalization.

Kinhom China: Leading furniture China Retailer

• 300 Stores (at time of implementation)
• 30% market share in China

Primary Drivers:

• Existing systems not supported
• Existing systems would not be able to sustain planned growth
• Opportunity to reduce cost of systems ownership

Project Scope:

What Was Delivered:

• Project successfully delivered within seven months.
• In parallel with outsourced system operations / POS replacement
• Minimal business disruption
• Store openings proceeded to plan
• Lower the stock 25% according to 3rd party's evaluation

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