By Stephen Withers
IT in the Supply Chain takes a spin down the aisles of the retail market to discover which technology projects are getting mindshare in 2005.
The retailing industry is a significant user of IT. IDC Australia estimates that retailers with 500 or more employees spent $330 million on hardware, software, and services during 2004, a figure expected to rise to $420 million by 2007.
Kourosh Ghassemi, research director for vertical markets, says most of this expenditure is on supply chain management, merchandise management, and transaction systems.
According to our interviewees, technologies of particular current interest include B2B e-commerce, analytics, RFID, and logistics.
Bruce McCabe, technology analyst and principal of S2 Intelligence, says that although people have stopped talking about it, B2B e-commerce is hotter now in the retail sector than it has ever been. There is "an enormous amount of retail activity in supply chain [systems]," he says. "I can't emphasise too much the amount of growth in this sector for 2005."
Amber Tiles, for example, is a franchised retail operation selling hard flooring products including tiles and pavers. During 2004 it set up an e-commerce system using Micronet software to automate the ordering and invoicing processes between individual stores and head office. All of the NSW and ACT stores were online by the end of the year. They were joined in January and February 2005 by the 10 Queensland outlets.
"We've seen significant gains," says information systems manager John Schrooten. For example, the time to handle an invoice has been halved as data entry is avoided-all that's really necessary is to check the price and quantities are correct and that the goods were received.
But only 30 percent or so of items are ordered via head office. The remainder are ordered directly from individual suppliers by each store, so the next step is to extend the system to major suppliers.
"Obviously when you're working with an external partner, it's quite a bit harder," says Schrooten. One of Amber's big suppliers is already doing electronic ordering and invoicing with Bunnings, and a hardware industry working group is looking to establish a standard. The question facing Amber is whether or not to wait for that standard, he says. The company doesn't have an answer yet, but wants to press ahead as it is "probably the greatest opportunity to improve efficiency in the stores," says Schrooten.
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