November 2000

Experiments by Safeway are showing that intelligent handheld terminals at the shelf-edge can feed benefits right back through the supply chain. e.logistics magazine reports

In many ways the holy grail of retail store operation is a supply chain system which reacts the instant someone buys something, activating a replenishment process that ensures product will always be available when it is needed.

Traditionally there has always been a time lag between store-based events (notably purchases) and a corresponding reaction in the supply chain system. Reducing that delay demands timely and usable information, which must be gathered at source and presented to the people who need it in the location where they need it ­ that is, out on the shop floor, in the warehouse, or on the manufacturing line.

Safeway reckons it has come close to achieving this with a new solution which combines the leading-edge technologies of pervasive computing and the Web. Effectively it "joins up" the consumer end of the supply chain with the production end. The company says the result has been to reduce lead times and create a seamless just-in-time value chain.

Applying technology in these areas is not of course new. In ten years of continuous development, retailers have adopted a wide range of information-handling technologies including EPOS systems, batch data capture, and (more revolutionary) radio frequency technology. But according to Danny Edsall, Safeway's manager of business solutions for the supply chain, there have been various barriers to achieving maximum potential benefit from these developments. He cites lack of standardisation, software issues, distribution problems and scarcity of programming resource.

Now, he says, three major technological developments have combined to allow true end-to-end management of the value chain. These are high-bandwidth wide area networks running TCP/IP; high-bandwidth spread-spectrum radio frequency networks in stores; and lightweight, ergonomically-designed handheld data management devices capable of running Web-based applications at the shelf-edge.

"Combining these technologies allows retailers to benefit from highly responsive real-time applications at the shelf-edge, whilst presenting those applications in a simple and easy-to-use format," Edsall says.

What Safeway has done is bring these components together in its "Real-time Store Inventory" project, which keeps track of the 25,000 individual products available in a Safeway supermarket. The information is made available instantaneously to suppliers through the company's Supplier Information Service ­ a Web-based extranet system which suppliers use to plan production and keep depots in stock.

One of the features of the system is that it makes the Web continuously available to the store manager at the shelf-edge. As well as providing access to bespoke Safeway applications, this also gives him easy access to Internet-based applications such as weather forecasts, as well as supplier extranet information about products, promotional literature or other intranet-based applications. These might include store product maps, price lookups, profit and loss figures and email.

Safeway has also adopted more consumer-facing technology. The Shop & Go self-scanning service, launched in 1995, is proving very popular, Edsall says. Last year the company took the Shop & Go concept a stage further when it introduced the new generation of self-scanning terminals. These took advantage of the software and system integration skills of IBM.

The enhanced system offered significant new possibilities alongside the recognised advantages of self-scanning. Among them were data mining capabilities, integration with home ordering systems, in-store pick-up and scanning. "Now we can communicate more effectively with customers, offering them significantly more product information as they shop," Edsall says. "We can provide menu suggestions and recipe ideas, and draw their attention to new products on offer, or alternatives to their usual choices."

Meanwhile, an extension to the Collect & Go home ordering service, Collect & Go Easi-order, has been undergoing trials at Safeway's Basingstoke store. Shoppers are given a palm-sized electronic organiser that contains a list of all the items they have recently bought in store, divided into categories such as bakery, delicatessen and frozen foods. They select items by scrolling through and touching what they require with a grey pen. The device can then be plugged into a phone line and the list sent to the store electronically, along with the desired date and time for collection. The shopping is collected and paid for in the same way as other Collect & Go orders.

A significant development in this context over the past eighteen months has been the emergence of the "personal organiser" type of device. The evolutionary path has led from large, clunky batch-based luggables (where designers tried to squeeze a PC into a small handheld device) to a revolution in design terms ­ a handheld device using Windows CE and Palm Pilot platforms.

 

Safeway is trialling devices based on both platforms. The Symbol PDT 7200 Portable Data Terminal incorporates both one- and two-dimensional barcode scanning into a lightweight device which runs industry-standard Microsoft MS-DOS or Windows CE. It also incorporates a voice-pager to allow instant communication over a Symbol Spectrum24 wireless LAN.

The PPT 2700 series of Palm-size PCs is a family of rugged, pocketable Windows CE-based computers, and combines barcode scanning and wireless LAN connectivity with the Microsoft palm-size PC platform.

Safeway claims to be the first retailer to deploy Java-based RF hand-held applications in a front-of-store environment. It is trialling both of the Symbol models, and has selected Java as its strategic applications architecture to ensure that applications can be platform-independent.

"Symbol made it easy for us by offering both Palm and Windows-based options in the same ergonomic package," Danny Edsall says. "In the past, programmers working on in-store applications were very specialised. We have made Java our core development tool, so that we can make best use of the systems development resource in the business. The developers are freed from the worries of specialist coding, and can concentrate on the key elements of efficiency and ease of use."

He adds: "It also allows us to buy the hardware most suited to the task, regardless of vendor, and be confident that code will run largely unmodified. Both from a retail perspective and from a systems development point of view it is a very effective way of using the budget."

The first application developed and deployed by Safeway with the new technology centres on stock control. "Our objective is to keep track, in real time, of the 25,000 lines in the average retail store and feed that accurate inventory back to the centre for accurate and timely buying decisions," says Danny Edsall. " We use the scanners to capture any movement of stock in the store and to pump the information back to a large DB2 database on a central mainframe.

"The real benefit to the store manager is the information the system can give back to him via his handheld device. It might include information about delivery arrivals, alerts about imminent stock run-out, and prompts to fill shelves at the right time. The system can remind him to count the same stock in different locations; it can monitor what the customers are doing and predict where shelf stock shortages are about to occur. There's no longer any need to walk up and down to check stock levels; labour can be focused where it is needed."

Edsall says there are numerous other potential applications where information delivered to the store manager at the shelf-edge can make a critical difference to performance.

"One possibility is for merchandising. We aim to provide a recommended model for laying out product lines in meaningful way for the consumer. The store manager can take the model and adapt it to fit the physical characteristics of the store. He can use the hand-held device to confirm his actions against the model and to record variations from it. Over time, we acquire a mass of data about the physical layout of our stores and what works best in which locations."

Another potential application is in pricing, which at the moment is very labour-intensive. Shelf-edge labels are batch printed, manually sorted and changed by hand while customers are out of the store. "With a PPT 2700, a store employee can be issued via the screen with a list of prices needing to be changed.

The operator can immediately print new labels from a belt-mounted printer, change the label and scan to confirm. This is a far less tedious and disruptive operation altogether." The primary driver for the whole project, says Danny Edsall, was to improve product availability to meet customer demands. There are two specific streams: the availability stream, for which the company has developed the stock-keeping application; and the second stream, which is all about opening up a new retail platform. "The hardware that we have delivered into our stores gives a new infrastructure for carrying our all store activities more effectively."