Retailer builds on Web efficiencie

Start with a solid base and build on that; and if it isn’t broken, don’t fix it. That IT strategy has been working for Michael Rossy Ltd., a retail chain of 63 department stores, mostly in Quebec but also in New Brunswick, Nova Scotia and Ontario. There are plans for the 40 year old company to open two more stores this year.

Jimmy Katsulis, director of IT, says information regarding the 50,000 SKUs on hand travels between stores and head office via VPN (Virtual Private Network) over the Internet.

“Even though all the stores are in different locations, we see them here as if they were local and they see us the same way,” he says. “Everything is going over the communication channel – the email, the credit, debit, polling – anything communication-wise.”

About three years ago, Rossy computerized its inventory and sales process to maintain and accelerate the expansion it was experiencing. Rossy contracted the products and services of IBM and its business partner Connections Canada for hardware and JDA Software Group Inc. for applications to implement an inventory management system that allows the company to track exact daily sales figures from all its stores, reducing time and errors relating to inventory management and providing management with useful product history data.

Network and checkout equipment installed then as well reduced waiting time at the check-out for customers. The network allowed Rossy to process six transactions at six check-out counters simultaneously, which was not possible before.

“We were pretty much the pioneers in using the Internet for credit and debit especially,” Katsulis recalls. “The bank was not very keen on it because it was new and the Internet was public. That is one of the reasons why we route all the credit/debit through the head office, then we push it out the regular data Pac form. They don’t even see the stores where it comes from. They just see it as from the head office but our equipment here tags it for us and we know exactly which store sent it. It is a great way of working.”

Time clock application

More recently, Katsulis designed and installed automated VPN communication between the ADP Payroll system and the electronic time clocks in the stores that employees punch to record their working hours.

“When you swipe the card, that punch appears here in head office on our server for the payroll and then it is automatically processed,” he explains. “Before, they had time cards that would have to be calculated and done on a spreadsheet, so it saves days and weeks of working out numbers.”

Katsulis says he just used what Microsoft has to offer in terms of communications, in particular the routing and remote access service with Windows NT, including Microsoft’s Point-to-Point Tunneling Protocol for creating a virtual private network using the existing Internet backbone infrastructure. “It didn’t cost me a fortune. Everything is there. It’s all just IP work.

“The clocks at the store level are not very intelligent,” he adds. “You can give them an IP address but that is all you can do. You can’t point them to a gateway or anything. Another server [at head office] makes a reverse tunnel outwards and goes to find the clocks. So when they get punched, it comes in this way through one gateway and there is another gateway to send it back out. So all the traffic is handled by our servers here. They grab it and they push it through the right location. ADP said it can’t be done and now that it is working, they are looking at doing it for other clients.”

Because “everything we have now is effective, operational and supported,” no major upgrades are planned at this time, Katsulis says. “Currently everything is certified to operate together and everything works perfectly for our needs. We try to keep everything the same across the board so if we have a system failure or something, it is very easy to replace. We ship out mirror images on CDs so if the server dies, we just pop in a new hard drive and reload the CD. But if I wanted to put a new product in, I would have to get everything re-certified for the banking. It is not a short process.”

Price checking next

But that doesn’t preclude Katsulis from continuing to build onto their base. “We are looking now at in-store price checking scanners both for the clients and for store use but we want it to automatically update with the head office price listing again using the Internet as the communications tool so the prices are always the correct price at every moment and every day.”

The tentative plan is to employ an RF (radio frequency) system “where staff can go around and check prices on items instead of having to go to the cash register and scan it. Again that communications will go through the Internet to our head office.”

At press time, they were considering NCR and Symbol and assessing which will interface with existing network with least mechanics involved.

Also, since some stores still have dial-up modems, being in smaller centres, the plan for this summer is to upgrade all the lines to high-speed.

“Once those high-speed lines go in, I can shoot down the 50,000 SKUs anytime,” says Katsulis. “Also, when they do transfers store to store, they do them on the store level server and then it gets picked up in polling and processed during the night. With high-speed lines, they’ll be able to transfer directly into the head office system from the store level.”

He cites the example of a store fulfilling a shipping request for 50 hats to another store. “The other store won’t see those numbers until the next day because it has to go up the polling stream and get processed. With the high-speed lines, I can give them a session on the same server directly at the head office level and it doesn’t have to go through polling because it’s done directly. So the 50 items that you sent today will appear on that store’s inventory so you won’t go request an additional 50 over those that have already been shipped.

“With the high-speed lines, we will be able to see in real-time where everything is – which is great for buyers.”

Not to mention Rossy’s bottom line.