Page 26 - Sphere No.11 (Apr 2004)

C O V E R S T O R Y
SPHERE
1224
W hen a customer buys an item at a PARKnSHOP store,
the transaction automatically triggers a chain reaction
that goes all the way up and down the supply chain.
Integrated software responds to the “event” by updating infor-
mation for various departments throughout the organisation. Not
only is the transaction filed for accounting purposes but the dis-
tribution chain is also alerted, ensuring that the store never runs
out of supplies.
“From the moment the bar-code is scanned by the cashier at
point of sale, the information is transmitted via the store server
to a centralised computer,” explains C. K. Lai, Financial Controller,
Group Finance at A.S.Watson & Co. Ltd.
“If the customer purchases a bag of rice, for example, the inven-
tory level is automatically reduced by one.When the number of
units on the store shelf falls below a pre-set level, a purchase
order is automatically sent to the supplier who sends more bags
of rice to the PARKnSHOP warehouse, which in turn are deliv-
ered to the particular store to re-stock the shelves.This is a huge
change from the old days when staff had to manually count items
to keep track of inventory,” Mr Lai explains.
“The information flows both ways,” he adds. “When prices
change, head office prepares the information and sends it to the
various store servers. Of course, the staff still have to physically
change the price tags on the products, but the point-of-sale scan-
ners already have the new information factored in.All of this dra-
matically cuts down on man-hours, reduces error and improves
the experience for shoppers.”
The A.S.Watson Group operates more than 3,500 supermar-
kets and retail outlets across Asia and Europe, which together sell
over 200,000 product lines to some 10 million customers per
week in 16 different countries and regions.
To source, stock and sell such a vast selection of items out of
so many stores requires a very high
degree of logistical dexterity which
would not be possible without the
use of IT.
When Hutchison introduced the
EBIS system across all its business
units, ASW took the opportunity to
deploy new layers of IT that would
both support the specific requirements of its businesses and also
dovetail with EBIS. It was to be the biggest IT initiative ASW had
ever undertaken and would ultimately result in seamless front and
back office operations, delivering a competitive edge that has been
a driving force behind ASW’s rapid global expansion.
After examining the options, ASW selected a Web-based
approach, enabling the company to
build flexible solutions that help it to
communicate anytime, anywhere
using secure office, home and wire-
less technology that allows manage-
ment, employees and, vitally, suppli-
ers and customers to stay in touch
at all times.
To support this flexible Web-based approach, ASW developed
an IT strategy called SIMPLE (Smart Infrastructure Makes People’s
Lives Easier). Essentially, SIMPLE comprises the technical architec-
ture, the two data centres, the network system servers and the
common databases upon which all the other IT systems sit.
“The architecture is designed with mobile deployment and 3G
technology in mind, so ASW can take advantage of the exciting
developments in these areas,” says Mr Lai.
ASW then introduced software systems that were appropriate
for its various subdivisions. For example, its PARKnSHOP and
Fortress subdivisions deployed Retek software, an Oracle-based
suite of applications that provides solutions in the areas of
merchandising, warehouse data, distribution management, demand
forecasting, sales auditing, customer order management and
various other functions important for the smooth running
of retail businesses.
“The vision that was set for ASW’s IT team was to develop
systems that are of great value, but also simple to use,”
Mr Lai confirms.
“With EBIS, ASW has achieved a very cost-effective solution
through deployment of a single system that can be accessed by
over 800 users in five countries — Hong Kong, China, Taiwan,
Singapore and Malaysia.”
The net result is that today millions of product lines through-
out ASW’s retail operations are sourced, transported, tracked,
stored, stocked, sold and replaced according to standardised prac-
tices and with the minimum of fuss.
Staff productivity has increased dramatically, customers enjoy
exceptional value, and all financial transactions are handled
smoothly and efficiently, leaving a clear audit trail and allowing top
management easy access to data at the press of a button.
“What’s more,” says Mr Lai, “whenever ASW opens a new
store anywhere in the world we can deploy standardised
IT systems that enable the new entity to seamlessly fit in with
the rest of the operation. Thanks to the intelligent use of IT,
ASW has succeeded in keeping costs under control, increased
profitability and made a very complicated organisation run
like clockwork.”
thing commercially viable by using it where necessary to make
the conglomerate more efficient and more profitable.
Nicholls stresses that, at Hutchison, technology must be busi-
ness-friendly. “We make sure that we talk and, more importantly,
listen to our customers and then install simple technology that
helps people,” he explains.“We are early adopters when it suits us,
but information technology has to be driven by the business.”
This approach has helped to foster a working culture at
Hutchison that values the contribution made by IT to the com-
pany’s daily operations. The controlled deployment of advanced
technology has also produced a workforce that favours innovation
because it has already experienced the benefits.
“We have opened the doors for people to become more tech-
enabled, by providing them with relevant training,” says Nicholls.
“The partnership between business and IT allows people to
come up with innovative solutions which best suit their
business requirements.”
Continuous training of its staff is one of the reasons why the
THE OPERATIONAL ADVANTAGE