HBC puts LID technology on Zellers inventory

For Zellers, using business intelligence reporting has not only made managing inventory easier, it saves the national retail chain $5 million each year.

The mass merchandise division of Toronto-based Hudson’s Bay Co. (HBC) recently upgraded its Listed Inventory Database (LID) system to incorporate Microsoft Corp.’s SQL Server Reporting Services technology. The initiative began as a pilot project last April and was expanded to all 300 Zellers stores in August.

Chris Marinis, manager, development services and information services at Toronto-based HBC, said the in-house developed LID system allows Zellers to know, from the stockroom to the store shelf, the precise status of inventory.

Previously, inventory management meant staff had to manually check store shelves to determine what was needed from the stockroom. The next version of the LID system included a “semi-automatic” solution which data residing on a server locally in the store, allowing staff to reference the database to determine inventory.

The current LID third phase uses the Microsoft BI capabilities to create an integrated and centralized solution where all stores have real-time access to inventory and sales data. Marinis said the biggest challenge was in integrating the various technologies from its various vendor partners into the inventory management framework.

Along with the Microsoft enterprise reporting services technology, the LID’s replenishment and stockroom management system uses a Cisco Systems 802.11b wireless infrastructure to scan items via Symbol Technologies Inc. wireless devices, along with QVS software and IBM Corp. technology for data integration. Leveraging these technologies were key, Marinis said.

“What we needed to do was do a better job of managing the inventory from the backroom,” Marinis said.

The upgrades means Zellers can now automatically determine what products are on a given shelf at a specific time. Operational and inventory reports are generally generated in each store twice a day. With 300 stores, this means more than 600 reports, Marinis said, adding that HBC uses a number of specific BI queries which are used to get a more detailed view of the inventory. The LID system completely automates the replenishment process right to the shelf and also centrally monitors stockroom inventory. From the point of sale (POS), the inventory database is adjusted in real-time, Marinis said, adding that employees can now spend more time with customer service and management can make better decisions on the supply chain and labour.

Darren Massel, SQL Server senior product manager for Microsoft Canada Co. in Mississauga, Ont., noted that the enterprise reporting tool enables HBC to create reports that extracts data from any data source to any device in a variety of formats. When SQL 2005 is released next year the Reporting Services functionality will feature tighter integration with the Microsoft Office System along with the expanded performance, user queries, scalability and functionality changes in that major overhaul of the database, Massel said.

Since its launch in January, the Reporting Services add-on for SQL Server 2000 is part of Microsoft’s strategy of adding BI functionality into the database at no extra cost. Microsoft first began with extraction, transformation and load (ETL) functionality and online analytic processing (OLAP) in SQL Server 7.0, and incorporated data mining algorithms with SQL Server 2000. According to IT research firm IDC, the reporting market is valued at about US$3.5 billion. Where Microsoft stacks up with higher-priced BI offerings from established enterprise reporting vendors such as Cognos, MicroStrategy and SAS is a bit premature.

BI and reporting tools provide a competitive advantage, Marinis said. The IT infrastructure overhaul has paid off not only in cost savings and efficiency, but also in recognition; HBC’s LID system was recently named Best Corporate System at the sixth annual Retail Systems Achievement Awards held in Chicago.

The recognition reinforces the idea the HBC is on the right track when it comes to its IT environment, Marinis said.

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