Betta Stores Ltd. (BSL), the retail services company behind the Australian Betta Electrical and Chandlers retail franchises, is leading a push to streamline supply chain management for the electrical appliance industry.
“It’s early days; we’re doing about 2000 orders a month (with one key supplier) and over the next 12 months we expect this to grow to about 30,000 orders a month,” said Jim Tarlinton, BSL IT strategy manager. He added that other suppliers are asking to join in but BSL is waiting until the system is thoroughly tested.
The 412 Betta Electrical and Chandlers stores account for US$670 million in retail sales and operate without warehousing. All stock is delivered direct from suppliers and managed via a “virtual warehouse”, according to Tarlinton, who was speaking at the recent Smart 2003 supply chain conference in Sydney.
BSL is working closely with the Appliance Industry E-commerce Initiative (Applie-com) which kicked off in late 2000 with a steering group formed by Betta Stores along with Coles Myer, Harvey Norman, NARTA, Retravision and the Good Guys.
Core Applie-com enablers are EAN.UCC standard product numbering and standard electronic commerce messages – EANCOM/EAN.UCC XML. However, Tarlinton opted to not follow the XML route for BSL as XML was seen as an immature technology.
“Non-technical people said ‘you must have an e-market place and you must use XML’. I struggled with that for about six months and argued that it’s about structure and content,” he said.” If you get the structure and content right, everything else follows; people have used Edifact for more than 20 years, they have got it right; why reinvent it?” (Edifact is Electronic Data Interchange for Administration Commerce and Transport, an ISO standard for EDI.)
Tarlinton said that BSL management required any new supply chain system to be simple to use, easy to understand (as “it would cost a million dollars to go out and train people in each store”), quicker than a phone order, able to handle international trade, reduce the risk of error and disputes, and to work with other than electrical appliances.
Also, it would provide a process where BSL managed the data flows to be included in the financial transactions; retailers would manage the ordering and receiving, and suppliers manage the transport and logistics.
“The system is built on workflows and we used Applie-com as the data sharing standard,” Tarlinton said.
According to Mike O’Neill, former Whirlpool CEO and now chairman of the Applie-com steering group, at least 15 to 20 per cent of sales administration time in the appliance industry is devoted to fixing errors and these cost some 0.5 per cent of total revenue. EAN Australia has been working with the industry to create a series of trading messages based on EANCOM. Retail organizations such as BSL can choose which particular Applie-com trading messages they want to use to interact with their suppliers. Before ‘go live’, retailers can test supply chain systems using a “Community Management Tool” at www.ean.com.au/cmt.