Inventory In Sync
All bets are off on predicting consumer spending—which means retailers have to react even more accurately to the real-time inventory fluctuations in their stores.
To manage replenishment levels, the vast majority of retailers rely on batch processes that feed daily inventory records from the point of sale back through the retail enterprise to generate outbound orders at the retailer’s distribution centers. Problems such as delayed or failed batch reports can occur when retailers have disparate solutions running throughout the enterprise, as is usually the case following mergers and acquisitions.
For instance, Milwaukee, Wis.-based Roundy’s Supermarkets owns and operates 153 stores in the Midwest. The portfolio, which includes company banners Pick ‘n Save, Copps Food Center, Rainbow Foods and The Metro Market, has, for the most part, evolved from the steady acquisition of existing grocery chains. Beginning in 2000 with the acquisition of 24 Pick ‘n Save stores and continuing with the acquisition of Copps Corp. the following year, Roundy’s has increasingly grown its presence as a retailer. The company also supplies independently owned grocery stores.
A key challenge Roundy’s faced was keeping replenishment inventory flowing smoothly via batch jobs that had to run seamlessly across diverse platforms including Unix, Windows and the enterprise’s mainframe. In addition to its stores, the company has three distribution centers in Wisconsin as well as a food-processing plant that supports the more than 2,400 items sold under the company’s private-label brand. Annual revenues at Roundy’s are nearly $4 billion.
Recently the retailer deployed an enterprise-wide scheduling solution from Houston-based BMC Software. Justin Newby, senior production control analyst at Roundy’s, described the process of running batches across so many disparate systems.
“All our processes for inventory supply, billing, financials, as well as analytic reporting and forecasting run on applications spread across mainframe and open systems. Before BMC’s uniform scheduling environment, it was like one big black hole—we had no visibility into how everything tied together.”
The scheduling solution integrated the many application processes under a single point of control, allowing Roundy’s to optimize productivity and resources while supporting growth without additional costs or manpower. Currently Roundy’s processes 2,300 to 2,700 batch jobs per day, roughly a 70% increase over what it processed 10 years ago. Without the enterprise-wide automation, Roundy’s estimated the company would have had to double the throughput of many applications plus increase its IT staff to keep pace with its growth.
Additionally, Roundy’s can perform “what-if” scenarios to measure the affect of changes in demand. When sales peak seasonally, inventory volumes spike and there are increased POS transactions—placing increased pressure on the batching process. The scalable scheduling solution maintains the continuity of critical applications during these peak times.
For the inevitable exceptions that occur, Newby has created comprehensive documentation for each job so that operations personnel know exactly what to do if a problem occurs.
“The BMC solution alerts us when there’s a problem, and the operators use the documentation to see exactly what corrective action to take,” Newby noted. “There are manual interventions we can use, such as rescheduling or delaying some less important jobs to make room for the ones that are critical.”
Although all of Roundy’s stores are located in Wisconsin and Minnesota, retailers with stores across multiple time zones benefit from a feature within the enterprise-wide scheduling solution that defines time-definite events.
Saar Schwartz, solutions marketing director for BMC, explained how time-definite synchronization is particularly useful in scheduling replenishment deliveries. For instance, a European retailer relies on the system to schedule truckload deliveries of frozen products.
It can also be used for managing timely payments to supply chain trading partners. For instance, a large international coffee retailer that usually sources pastries from locally owned bakeries has used the solution to streamline and synchronize its ordering and payment process, which enables the retailer to keep its costs low and products fresh while maintaining cash flow to its mom-and-pop suppliers.