This board is tooooo quiet. WMT is finishing it's basing period and getting ready to make a run on 70 again.
Fez
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Tuesday March 21, 12:55 pm Eastern Time
Asda hooks up to Wal-Mart computing muscle
By Kevin Drawbaugh, European consumer goods correspondent
LONDON, March 21 (Reuters) - The world's most powerful retailing computer system will come on line in Britain in two weeks when supermarket chain Asda hooks up to the massive data crunching network of its U.S. parent, Wal-Mart Stores (NYSE:WMT - news).
From counting tubes of toothpaste sold per minute to cutting payroll cheques, Wal-Mart's all-encompassing systems promise to sharpen Asda's already formidable competitive edge.
``This is a real first for the UK and it's a big opportunity for the business to be absorbing this,' said Asda retail development director Andy Clarke, head of systems integration for Britain's number-three supermarket chain since it was acquired last summer by Wal-Mart, in an interview on Tuesday.
Wal-Mart prides itself on its attention to customer service and ruthless price competitiveness.
But, the company says, just as important in its rise to becoming the world's largest retailer was its early and ongoing commitment to state-of-the-art data systems.
From headquarters in Bentonville, Arkansas, Wal-Mart micro-manages its empire so tightly that it is said to be able to remotely adjust the thermostats in each of its 2,522 stores.
``They have a very strong IT capability supporting a very simple business objective, which is to have the right stock at the right place at the right time ... As a result they've got no fat in the system at all,' said Alexander Drobik, an e-business expert with consulting firm Gartner Group in London.
Bringing that sort of power -- chiefly a cost-savings edge -- to Asda, which already outperforms most rivals, is one of the reasons other UK retailers fear the so-called ``Wal-Mart Effect.'
``At the moment, we're training store colleagues and Asda House colleagues in how to use the technology. In a couple of weeks' time, we turn that technology into live data ... So we'll start to use the systems in a live environment,' Clarke said.
WAL-MART SWITCHED ON EARLY
Twenty years ago, when most retailers were still using typewriters and forms in triplicate, Wal-Mart began using computers to drive costs out of its supply chain.
In the early 1980s, it adopted costly bar-code scanning, while other retailers struggled with error-prone optical character recognition. OCR died out. Bar-codes became universal.
Wal-Mart followed in 1990-1992 with a series of innovations, including:
-- An in-store system called Smart that links checkout registers, tracks inventories and automatically reorders goods from suppliers when stocks run low. It processes price changes, payrolls, staffing levels and reports any anomalies to managers.
-- A Retail Link system that broke decades of tradition in retailing by making sales data available to suppliers. It lets them check invoices, count goods sold at each store daily, track price cuts and returns and analyse trends and forecasts. Retail Link migrated onto the Internet in 1997.
-- Telxon portable stock checking units carried by sales floor clerks and linked to Smart by wireless connection.
-- An Informix tracking system for Wal-Mart's vast fleet of trucks giving dispatchers real-time data on vehicle locations, loads, weights and routes through onboard transmitters.
-- A massive private satellite communication system linking it all together and giving Wal-Mart executives instant real-time access to employees around the world.
``Wal-Mart committed early to technology and it did give them an advantage,' said Goldman Sachs retail analyst Nicholas Jones.
SYSTEMS EDGE CRUSHED COMPETITORS
These systems allowed Wal-Mart to save money in its supply chain. Those savings allowed it to then undercut competitors' prices on a permanent basis, yet preserve equal profit margins.
The result was disaster for U.S. competitors such as Kmart (NYSE:KM - news) and Sears Roebuck (NYSE:S - news).
Unable to respond quickly to Wal-Mart's systems advantage, they could only stand by while the Arkansas group devoured
their market share.
Today, Wal-Mart has usurped both Kmart and Sears as leading American retailer and is expanding overseas. It has bought
two small hypermarket chains in Germany, where its computer systems are up and running. Last summer, it bought Asda,
setting off a wave of anxiety among competitors such as Tesco Plc (quote from Yahoo! UK & Ireland: TSCO.L) and J. Sainsbury Plc (quote from Yahoo! UK & Ireland: SBRY.L).
Back in America, Wal-Mart has been quick to incorporate the fresh-food systems strengths of Asda, whose stores tend to sell a greater proportion of groceries than Wal-Mart's do.
``We haven't just taken the Wal-Mart systems off the shelf. We have made some enhancements to some of them,' Clarke said.
``Our way of working with fresh foods can enhance their stores, as well...So some of that is being transferred across the water. There's a piece of learning there for Wal-Mart about Asda's fresh food systems,' he said. |
