Harris Farm's 25-year-old in-store integrated retailing system was "creaking at the joints", it said this week, prompting the grocery chain to modernise, moving to a newer Microsoft platform to manage its whole supply chain.
Harris Farm CIO Mark Hudson
(Credit: Mark Hudson)
The chain had 10 more stores than the old system could handle, according to Harris Farm CIO Mark Hudson. IBM, NCR and electronic scale manufacturer Toledo had worked together between 1981 and 1983 on a system that could connect a cash register to a scale. The code developed for that AS/400 mainframe-based system was the code the firm was largely running on now, according to Hudson. "It was 10 years ahead of its time," he said.
The problem was that the stores started carrying more and more food outside its normal fresh fruit and vegetables, increasing the number of product lines to 5000 or 6000. There were also problems because the purchasing was being carried out in a very ad-hoc manner: either suppliers would arrive at the store and notice that their goods were out of stock so they would deliver some, or managers would call or SMS. There was any number of mistakes which could occur, according to Hudson, such as double ordering.
Harris Farm put out a request for proposals, and decided in the end to go with Microsoft's Dynamic NAV platform, which was being offered by Microsoft partner Hands-on Systems. Hudson said Hands-on Systems had experience with Macro Whole Foods (since bought by Woolworths) on its resume — a company considered to be very similar to Harris Farm. Harris Farm also liked the fact that Hands-on Systems was offering Microsoft, which gave the company the feeling that it would bend over backwards for it.
The new system will handle Harris Farm's whole process, from stocktake, merchandising and sales to warehousing and supply chain, Hudson said — giving the company full stock control. Business intelligence at the desktop would give the company a view over purchase and sale prices as well as orders. In-store staff would be able to interact with the system via handheld Windows Mobile devices, three to four for each of the 22 stores. Purchase orders would be received electronically at the warehouse.
Hudson has three of his five IT staff working on the project as well as two contractors and 10 to 11 workers from Hands-on Systems. The system and integration deal has cost the company $900,000 and he expected to spend at least that again on his side, bringing the cost of the implementation to around $2 million. Hudson believed the company would achieve return on investment in two years.
As yet, Hudson has only implemented the financials portion of the system, but is already seeing some benefits. Staff — instead of entering information manually into the AS/400 platform as well as into MYOB — now only have to enter the information into the old system, which has been integrated with the new financials. This has meant less mistakes made because of illegible or ignored notations.
The next step is to implement the purchase order part of the system, which will bring the most benefits. It will start with a pilot in the next few weeks, followed by implementing the system for the warehouse products in October, then that for fresh products and in store integration, which are both scheduled to start in November.