Shared Services

Shared Services combine competence centres in six following areas. They are responsible for both the operational activities and the different strategic orientations.

• Logistics
• IT
• Transport
• Sustainability/Environment
• Planning/Expansion
• Quality assurance

In 2014, activities in the area of logistics focused on increasing efficiency by reducing costs along the entire supply chain. Rising raw material prices, the euro exchange rate and higher production costs necessitated continuous optimisation along the whole value-added chain.

Automation at the Migros Distribution Centre Suhr (food) and Migros Distribution Centre Neuendorf (non- and near-food products, textiles and frozen produce) was stepped up again and the fully automated picking facilities installed in 2012 were further consolidated. The investments in automation made in recent years have resulted in additional productivity increases and cost savings.

Systematic implementation of new transport solutions

Roads became more congested in the reporting year. In both international and domestic transport, Migros implemented new transport solutions and concepts which ensure long-term efficiency and reduce the carbon footprint. In international transport, this was achieved in particular by expanding the southern port connection, through which a quarter of goods from the Far East pass. In domestic transport, the measures included improved transport planning.

Alongside conventional road and rail shipments, Migros has also been relying on intermodal transport for the past few years, including on the Swiss Plateau-Eastern Switzerland, the Swiss Plateau-Western Switzerland and the North-South axes. This enables long distances to be covered by rail. However, for infrastructural reasons, deliveries to the supermarkets ("final mile") are made by truck.

In 2014, Migros systematically implemented its proven transport logistics strategy of always transporting goods by rail where possible. It also strengthened its position as the biggest customer of SBB Cargo. Since 2013, shipments from the distribution centres to several regional cooperatives are made by rail. The full benefit of the changeover became apparent for the first time in the reporting year: In the period up to the end of September 2014, and in comparison to the previous year, the goods wagons covered around 12 percent more kilometres in total. Across the whole year, the increase amounts to 5 percent.

Migros IT Services: development of M-Infrastructure

As part of the development of the consolidated M-Infrastructure for the Migros Group, the areas of M-Telecom, M-Security, M-Workplace and M-Datacenter are being consolidated, centralised and standardised from 2014 to 2020:

• In the area of M-Telecom, the standardisation of the communication networks and the integration of the decentralised teams into Migros IT Services was completed in 2014.
• M-Datacenter will provide a data centre platform with relevant redundancies for the Migros Group. This project will be presented to the decision-making committees in 2015 and should be implemented by 2018.
• M-Workplace defines the standard workplace for the Migros Group, with the aim of equipping 25‘000 workplaces centrally and operating them in the companies. In addition to the long-term strategic advantages, this will reduce costs by CHF 25 M per year in comparison to a decentralised structure. The roll-out project will be completed by 2019.

Sustainable development: optimised services

In 2014, the Logistics & IT Department, in partnership with the other strategic business units (SBU), committed itself to the sustainable organisation of its services. For example, environmental and energy management was further expanded within the Migros Group. Corporate environmental protection has been a basic requirement for all Group companies since April 2014. The development of individual climate and energy strategies, the submission of energy and CO2 target agreements to the state and cantons, and the implementation of specific energy measures were also supported in the reporting year. In the logistics companies, for example, additional measures for utilising waste heat were implemented to replace fossil fuels.

Since the start of 2014, Migros has been the first Swiss retailer to recover and recycle all types of household plastic bottles. The company won the 2014 Swiss Recycling-Award for its pioneering work in the area of plastic bottle returns. In the reporting year, awareness of materials recycling and sorting was raised among staff at the branches and operating centres. The department also made a commitment to expanding the near-natural areas on the company's own premises. More than two million square metres of near-natural habitat were created for animals and plants by the summer of 2014.