Coles starts auto-ordering

Coles has finally made some progress on installing an automated ordering system in its stores, hoping to roll-out the system to just under a third of its supermarkets by the end of the year.

Coles has finally made some progress on installing an automated ordering system in its stores, hoping to roll-out the system to just under a third of its supermarkets by the end of the year.

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Ian McLeod
(Credit: Wesfarmers)

"The easy ordering program is something that we're now starting to progress with broader levels of scale," Coles MD Ian McLeod said at an investor briefing in Sydney last Friday.

He addressed past critics who believed the chain should have tackled its pen and ink ordering system sooner. "I know there's been criticism in the past that we've been slow off the mark in terms of developing this automated system. But in my personal experience if you rush at rolling out automated systems into stores, then ultimately it will fall over and cause you more problems. What we've been absolutely resolute in doing here is making sure we roll at a pace we think stores can digest," he said.

In August this year, Wesfarmer's CEO Richard Goyder had said that McLeod thought the business was "not capable" of introducing auto replenishment at that time. "We will gradually bring auto-replenishment into the business as we can do it effectively and in a way where we don't create enormous upheaval in the business," Goyder said.

The time appears to have come. Next week will see 30 stores on the system, according to McLeod, with 200 of the chain's 700 stores planned to go on by the end of the year. The stores that adopted the system had seen lower inventory levels and improved availability, according to McLeod.

The most important thing when moving stores onto the system was not putting the personnel's noses out of joint, he said. "What's important in these areas is that the store management feel as if they've been delivered a benefit and they not just feel like they've been done to," he said. "Previously this was regarded as an IT implementation system and what we've done is re-spun it to make sure that the stores realise that actually this is a store operations improvement program with IT facilitating the support."

This had been so successful, he said, that department managers working in the 30 stores where the system had been implemented were resisting transfer to the stores that hadn't yet installed it.

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