Although the iconic German footwear and fashion brand Birkenstock is synonymous with a laid-back lifestyle, before it took the first step on a journey to transform its North American operations the company carefully planned the project and left nothing to chance.
Birkenstock’s technology transformation included launching a new subsidiary in Canada and replacing an outdated, 16-year-old AS 400 system in the U.S. with cutting-edge technology supported by SAP S/4HANA and the industry-specific features of the SAP S/4HANA for fashion and vertical business solution.
The Birkenstock project team, led by Joshua Milos, senior director of IT for Birkenstock Americas, worked closely with SAP partner Rizing to reinvent its Canadian and U.S. operations and now has a streamlined, modern platform to support the company’s robust growth.
The greenest of greenfields
Birkenstock has long had a presence in the U.S., and in 2019 it decided to open a new subsidiary in Canada to better serve its growing market there. Starting out with no existing infrastructure in the country—no offices, employees, or tech—it was a true “greenfield” project in every sense of the term. From the start, Milos and his team saw the Canadian project as a blueprint for a planned revamp of Birkenstock’s U.S. operations and the perfect opportunity to lay a foundation for future growth.
“This was the greenest of greenfield implementations you could have, which gave us the chance to use it as a template for future expansion,” he explains. “Starting with Canada gave us the opportunity to test our processes and make adjustments before rolling out to other regions.”
The Birkenstock team worked with Rizing to establish a robust foundation for the new subsidiary, relying on the partner’s system architecture expertise to ensure that the infrastructure was scalable, future-proof, and met the company’s specific needs. “Rizing provided us with preconfigured clients and the expertise necessary to get us off the ground quickly,” says Milos, noting that this enabled seamless implementation of advanced functionalities like order management, inventory control, and financial reporting.
Process standardization was crucial: the Canadian project team collaborated closely with U.S. colleagues to identify and embed best practices from the U.S. business. Rizing helped Birkenstock map out its business processes and configure the new SAP system to align with these standards, ensuring that the Canadian operations were consistent with established U.S. practices.
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Immediate benefits
The Canadian implementation quickly demonstrated the benefits of a modern ERP system. Within a few months, Birkenstock Canada was operating with a level of efficiency and visibility that was unattainable with the legacy systems in the U.S.
Real-time reporting and analytics capabilities in the new SAP system provided Birkenstock with immediate insights into operations, allowing for faster decision-making and better resource allocation. Automated workflows and integrated systems significantly reduced manual processes, improving operational efficiency and freeing up resources for more strategic tasks. And as Birkenstock Canada grows, its SAP infrastructure is ready to handle increased loads and expanded operations.
Patience… and partnerships
While the Canadian greenfield implementation was straightforward, Birkenstock’s “brownfield” transition from its old system to SAP S/4HANA in the U.S. wasn’t without challenges. The company’s legacy system hadn’t been upgraded in 16 years, resulting in inefficiency and manual processes. A global pandemic, a private equity investment, and an IPO all added additional layers of complexity along the journey. Milos knew that patience and consensus-building with stakeholders were crucial for change management. “We had to identify where the issues and pain points were to establish our ROI,” he says.
Rizing helped navigate these hurdles, providing industry expertise to create a compelling business case for global leadership. And to get buy-in at all levels of the organization, the project team spent ample time with business stakeholders, including visualizing processes in a sandbox environment to make the technology more approachable.
Another key step was to form a super-user group comprising key business stakeholders. This group, empowered by extensive training, was responsible for owning the system post-implementation. “The user group made the decisions, took ownership, and were heavily involved in the process,” Milos notes.
Clean core, clean data
Birkenstock has ensured that its system is future-proof, nimble, and upgradeable by sticking to a “clean core”—using standard functionality and avoiding unnecessary customizations. “We took an MVP [minimum viable product] approach. Only the minimal things needed for go-live were implemented,” Milos explains.
Having clean, accurate data before go-live was also vital. “Get your master data right before you start transacting in the system. It drives a lot of what goes on daily,” Milos advises. Focusing on data integrity enabled a smooth data migration and allowed the company to get immediate value from its new system.
Birkenstock leaned heavily on Rizing’s expertise with SAP best practices as it implemented the clean-core strategy. The SAP partner helped Birkenstock identify where standard functionality could be leveraged, reducing the need for custom development.
Integration and real-time insights
Implementing SAP S/4HANA has allowed Birkenstock to achieve a unified system for its wholesale, retail, and digital channels that offers real-time insights and streamlined business processes. “We have more sales reporting and can see data in a holistic view, not in silos,” Milos notes.
The transition has also improved supply chain visibility, crucial for navigating global uncertainties like tariffs. “Being able to support our consumers better and adapt to changes nimbly has been a game-changer,” Milos says. In addition, Rizing’s industry-specific solutions and deep understanding of the fashion retail sector ensured that Birkenstock could maximize the benefits of SAP S/4HANA.
The fashion-forward power of SAP S/4HANA
Birkenstock opted for the SAP S/4HANA for fashion and vertical business solution because of its industry-specific features like allocations, ATP scheduling, and the retail article master. “For fashion companies, using SAP S/4HANA for fashion and vertical business is crucial for its advanced capabilities and better product management,” Milos emphasizes.
Rizing’s preconfigured Fashion Suite accelerator for SAP S/4HANA for fashion and vertical business also sped up the implementation process. With order types, pricing procedures, and other processes ready to go “out of the box,” Birkenstock could focus on business-specific customizations.
A resounding success
Despite initial skepticism from Birkenstock executives that had experienced past project challenges, the company’s North American SAP S/4HANA implementation went live on schedule and was a resounding success. From the beginning, the team knew it needed to do the U.S. implementation as a “big bang,” with the wholesale, retail, and digital channels all going live at the same time. To ensure a smooth transition, the team added an additional six months to the initial timeline for rigorous testing.
The project was also a success from the SAP partner’s perspective, says Rizing’s Javier Zayas Cela, business development senior director, fashion: “Partnering with Birkenstock on this transformation journey has been incredibly rewarding. Their openness to change and strategic vision in transitioning from legacy systems to the advanced capabilities of SAP S/4HANA have positioned the brand well to embrace new technologies and accelerate its growth.”
The transformation has not only modernized Birkenstock’s operations but also equipped the company with the tools to adapt and thrive in the constantly-changing fashion business landscape. As the company moves forward, it’s focused on continuous improvement and optimization and is committed to using its SAP system to drive innovation and growth. “This is just the beginning,” Milos says. “We’re excited about the possibilities that lie ahead.”
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