20 March 2024

X5 Group develops a proprietary warehouse management system

Moscow, 20 March 2024 – X5 Group (“X5” or the “Company”, LSE and MOEX ticker: FIVE), a leading Russian food retailer, has developed and piloted Nexus WMS, a proprietary warehouse management system that automates warehouse business processes. The software is used to manage warehouse operations from the moment goods arrive at a distribution centre (DC) and until they are sent further on along the logistics chain. With the new software, the Company has fully replaced its previous warehouse management system supplied by a foreign vendor that left the Russian market. The system is a proprietary development of X5 Tech, the Group’s IT company.

WMS is a key element of supply chain management that helps to improve the efficiency of warehouse processes, facilitate the flow of goods and ensure the transparency of all the Company’s stocks at DCs. The software helps to save the time of warehouse employees by reducing the number of warehouse operations and minimises errors that could lead to extra costs. In addition, the new system will provide the technological foundation for the further robotisation and automation of the Company’s warehouses.

To date, about 85% of warehouse operations at X5 have been transferred to the new system, including warehouse receiving, pick-by-voice, internal routing and picking, vehicle loading, work with documents related to receipts and shipments, and more. A functionality analysis of the new Nexus WMS system revealed additional opportunities to optimise business processes that have already improved DC performance. For example, the new system triples the speed of reserving goods to be picked for shipment.

The system has currently been put into pilot operation at four Pyaterochka DCs in Obninsk, Yekaterinburg, Krasnodar and Oms,k as well as at one Perekrestok DC in Voronezh.

The rollout of the WMS to all Perekrestok and Pyaterochka DCs is expected to be completed in mid-2025 and early 2026, respectively. The proprietary Nexus WMS system is already mandatory for new X5 DCs.

Anton Mironenkov, Managing Director of X5 Technologies, commented:

“After foreign vendors left the market, we analysed all the available options and discovered that Russia-made solutions do not cover 100% of our business needs, including in terms of volume, loads, speed, scale and sustainability. Moreover, we started to think seriously about comprehensively expanding the existing functionality of our warehouse management system, including for the purposes of automating and robotosing our DCs. As a result, we decided that we needed to develop our own system. And I can confidently say that we succeeded in creating a world-class warehouse management system that is on par with advanced European and American alternatives. Our reality today will inevitably push us towards robotising warehouse operations. We now have the foundation to make a leap forward in this area. We are eager to explore the opportunities that robotisation can offer us today and in the medium term, and X5’s Nexus WMS is a necessary and very timely step in this direction.”