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When Tony Kleiner, director of buying and supply chain projects for Los Angeles-based Smart & Final, talks about spaghetti, he isn't referring to pasta. He's describing the technology infrastructure that once controlled the flow of information throughout his operation's supply chain.
The legacy supply chain technology was made up of homegrown and modified systems that had served their purpose, but were coming to the end of their run. "We had a system that was 20 years old," says Kleiner. "It was primarily for buying and warehouse distribution. It worked very well, but couldn't be replicated to other warehouses. We were stuck with that system and were trying to make it work."
Making this particularly challenging were Smart & Final's unique offerings and customer base. As a 241-store non-membership warehouse retailer serving both consumers and commercial food businesses such as restaurants, it carries many high-volume items -- water, paper, detergents -- that sell by the pallet. However, it also carries a number of slower-moving items to satisfy the occasional specialty needs of its restaurant and catering customers. These swings in volume and in variety mean that buyers need to have items' sales data at hand -- and in up-to-the-minute condition.
The old network was too ungainly to keep pace.
"It was difficult to understand which system interfaced with which system, so if we needed to modify or add to it, it was a very complex undertaking," recalls Kleiner. "We lacked visibility to the touch points throughout the supply chain. You had to go into different systems to see various activities, and we needed to query multiple databases to get a view of how product flowed from vendor to customer."
But since employees manually entered information into the system at several points throughout the supply chain -- such as the warehouse management system at the distribution center, or the ordering system in the store -- over time, inconsistencies crept into the data.
The company's IT staff installed patches to force the integration of the disparate technologies, and the network held together, but the situation led to inefficiencies that negatively affected the business. "We couldn't coordinate our forecasting, distribution, and replenishment activities in an optimal manner," admits Etienne Snollaerts, Smart & Final's president and c.e.o. "We ended up with too much or not enough inventory. Issues in warehouses caused inconsistent inbound and outbound activities."
What's more, Smart & Final's recent spurts of growth stressed the system to its limit. "Smart & Final has been growing rapidly, and to support that growth, we needed to overhaul our supply chain network," says Kleiner. "Systems, warehouse locations, and existing processes had to be reviewed to make sure they were capable of supporting our go-forward initiatives."
Fortunately for Smart & Final, Snollaerts had been in this situation before, at French retail chain Groupe Casino, where he was heavily involved in supply chain projects. Casino had needed to improve data quality and accessibility across the entire supply chain. Its inventory management procedures were also based on multiple decentralized databases, including four warehouse management systems, four store-level product management systems, and a separate product database for each warehouse in operation. It, too, had needed easier access to the latest product information, and the ability to quickly and effectively analyze data.
As he did with Casino, Snollaerts decided to corral all of the supply chain data together into a centralized source, with a common interface and reporting for all users as well as trading partners. He went with Casino's choice, Aldata Solution, the Helsinki, Finland-based provider of integrated merchandise management and supply chain solutions, with a U.S. home in Atlanta.
Smart & Final installed the Central, Stock, and Topase modules from Aldata's GOLD suite of products, which was developed to allow retailers to find, implement, and enforce common processes throughout the enterprise, organizing the retailer's former supply chain mess into a single version of the truth, regardless of whether a buyer or warehouse manager is looking at the data.
Central is the application module -- the control center -- of the GOLD software family, incorporating all of a company's business rules into its processing, among them multiple formats, multiple currencies, multiple languages, and multiple organizations. The system includes reference or master data management (such as company topology and suppliers), purchasing, replenishment, sales (assortment, pricing), and logistics flow management.
Stock is a warehouse management system for the management, control, execution, and processing of logistics operations, and provides multisite, multiorganizational, multiprincipal, multisystem, and multilingual capabilities. It manages all physical and information flows, and processing is controlled and executed for one or more warehouses within a logistics network in local and/or centralized mode.
The Stock component also manages storage, integrates with warehouse automation, optimizes order preparation, and tracks productivity, enabling visibility and full traceability throughout the supply chain.
Topase uses mathematical forecasting models to create scheduling and the ordering procedures of suppliers, by integrating all of the logistic constraints.
Together, the software enables Smart & Final to host its data centrally, while giving each type of user, whether in the warehouse, office, or store, the ability to use it in a way that makes sense for each user's particular role.
"This is important, because buying and warehouse teams had different policies and processes for determining pallet configurations," says Kleiner. "Buying bought in one configuration, and the warehouse often restacked those pallets to a configuration they needed for storage. The new software helped us to define common needs between the various groups within the organization, and we now work together in developing a single configuration that's much more efficient all around. We're now seeing better receiving processes, reduced labor, and more efficiencies."