A Retail Tale

The Hudson’s Bay Company (HBC), Canada’s well-known chain of department stores, needed to implement a new system throughout its Zellers division. With more than 300 stores across Canada, keeping track of who needs what products and when can be a bit overwhelming. After two full years of planning, the chain implemented the final phase of its new retail-management system in April.

The systems that were in place before were simply becoming outdated, according to HBC’s vice-president of information services, Gary Davenport.

“The situation prior to the (new) implementation was a grab-bag of legacy applications that were built and linked together over a great number of years. The net result of that set of systems was a level of performance for the business and productivity that was not in keeping with where we needed to get to — and get to quickly,” Davenport explained.

It was pretty much “a green screen environment,” before the new implementation, said Moses Levy, the company’s general manager of supply chain and logistics systems.

Davenport explained that within Zellers there is a buying community which is responsible for identifying the products that customers want, and setting up those products on the system. Orders must be placed to fill the shelves and the stores. As the products arrive from the suppliers, the receipts must be entered into the system so it is acknowledged that those products have been received into the distribution centres (DCs), and then they are shipped out to the stores.

After some hunting around, HBC decided to go with a solution from Minneapolis, Minn.-based Retek, a retail business software company, along with Oracle Corp.’s 8i database and software tools.

Retek’s Merchandising System and ActiveRetail Intelligence (ARI) products are used by Zellers for everything from file maintenance for vendors and items, down to inventory management, replenishment and price management, all in one system.

Thomas Redd, Retek’s vice-president of global marketing, explained the products are Internet architected, “which means that it’s a whole different way in how updates are provided, and how you’re leveraging the Internet to get the job done.”

The system overall adapts well, he said, which means the job becomes easier for network managers and administrators.

“Utilizing an Internet infrastructure, it’s much easier to adapt the system to the users and to their environments and their portion of the business,” he said. “When you talk about overall networks, I think one thing is the fact that the way our system is designed, it’s all about data movement, utilizing the Internet, utilizing the structure of our system design for moving large amounts of data across network environments.”

With the implementation of Retek, the Zellers chain has totally converted to a Unix/Oracle-based environment, with servers located centrally to provide quick access to all the key operating components of the system, Levy explained.

All of the stores are now equipped with Web access, which helps keep the chain’s costs down because the applications don’t need to be loaded onto individual PCs and workstations across the country, said Dave Rumer, director of e-business solutions for Oracle. With the Web-enablement, HBC is able to implement the system from one central location.

And, Rumer noted, when new releases or versions of the Retek software become available down the road, Zellers will only have to redeploy it from one location.

HBC has deployed capabilities “from central (head office) to monitor the network, monitor the servers, and sort of use the industry practices like Tivoli to drill down on problems and see where things are happening,” Levy said.

The new system keeps a perpetual inventory as well as

information on which items are selling and when it is time for reordering or replenishing.

“It does the whole supply-merchandise fulfilment from order through to customer sale, and it provides reporting around that,” Davenport explained. “So in essence, it is all about providing the right product to our customer at the right time, at the right price.”

HBC is looking at different vehicles to transform its business into an e-business to really compete, according to Oracle’s Rumer. “And the core or the centrepiece of their foray into becoming an e-business is really the merchandising system.”

Given the magnitude of the project — all the stores, seven distribution centres and approximately 400 people at the head office were involved — there was no way to entirely avoid problems. But according to Levy, any issues that came up were not insurmountable.

“We had a number of challenges,” he said. “As we got closer to implementation, just the logistics of trying to train the thousands of people that needed to be trained and having to set up regional training centres and deploying equipment — all of those things invariably give you some challenges. Frankly, nothing is insurmountable. It was typical of a large scale ERP implementation.”

Training was handled by a division of the company known as HBC University.

Logistics and communications posed a challenge, so people from the HR department were brought in to send out communications to all the stores indicating what changes were coming and how they would affect everyone.

The next big challenge — as if the last one wasn’t enough — is to implement the same system across The Bay chain of stores. Expected to be in place sometime next year, this new system will be connected to the Zellers environment.

“Our real advantage for The Bay is we should be able to proceed at a much faster rate, and take the experience of the Zellers implementation and build on all the strengths and solve all the deficiencies,” Levy said. “We’re expecting a much more rapid deployment and probably a much more stable one.”