VetMall.com is based entirely on Microsoft technologies, including the BackOffice Family and Microsoft Visual Studio®. "We had in-house experience with Microsoft Windows NT®, and we liked the integration of development tools and the way Microsoft technologies are easily deployed," says Liao.
Phase two, in development now, connects the veterinarians to the distributor. "Vets will be able to better communicate with their distributors and conduct business," says Miller. "They can offer products directly to their clients without storage or inventory costs. Distributors will be able to accurately forecast inventory needs, reducing warehousing costs. VetMall will also provide order receiving capabilities, e-mail accounts, Accounts Payable/Receivable functions, account tracking and maintenance, and advertising to the veterinarians."
Phase three will extend VetMall.com's reach by including the manufacturing community. VetMall will serve as the marketplace for manufacturers to receive orders from the distributors, negotiate pricing, and plan production for their products.
"We wanted to provide a simple way for manufacturers and distributors to join in VetMall, and we see XML documents as a better way than COM to ease the pain of EDI," says Liao. "Using BizTalk, they can send us their transaction format and we can facilitate e-commerce transactions by providing the mapping and pushing it back out."
VetMall uses the Commerce Interchange Pipeline component of Microsoft Site Server Commerce Edition, which supports XML, to facilitate data exchange over the Internet. Their four Windows NT Server–based servers and Microsoft SQL Server™–based databases are hosted by Data Return Corporation, a Microsoft Certified Solution Provider and specialist in advanced hosting services for the Microsoft platform. "Our Integration Server is our communications vehicle, which communicates with an Integration Server at Butler," says Liao. "When we get an order from a veterinarian, we wrap the XML document with Microsoft Message Queuing and push it to Butler's Integration Server. It doesn't matter how often they sweep their server, the orders will be queued up waiting to go.
"We believe SQL Server 7.0 Enterprise Edition is infinitely scalable, so that as we grow we can plug in as many machines as we need," continues Liao. "We really like the auto memory feature, which reduces our overhead."
Monday, February 11, 2008
Linking the Key Players
Desktop Corporation began creating VetMall.com by determining the key partners needed to field a best of breed solution. "We expect to have most of the 46,000 vets at 26,000 clinics in the U.S. on board," says Mark Morrison, director of Marketing at VetMall.com. "The key to this was selecting the best distribution partner to handle fulfillment, returns and relationships with the vets and we did that when we reached an agreement with The Butler Company—the only nationwide distributor dealing exclusively with the veterinary industry."
Upon reaching an agreement with Butler, Desktop began phase one of VetMall in March 1999, by connecting veterinarians with consumers on the Internet. "VetMall is unique in that it allows an individual veterinarian to develop a Web site using a simple wizard," says Morrison. "These sites showcase local information provided by the veterinarian, but also feature rich content provided by leading organizations in the vet industry, as well as interactive areas for children and educational information about pets and farm and ranch animals."
VetMall plans to leverage the relationship between the veterinarian and his/her clients to create traffic on the site. Says Morrison, "We believe that the consumer will enjoy greater value from purchasing products from a source they trust, their veterinarian."
VetMall launched the e-commerce portion of the site on October 1, 1999, offering more than 3,500 products for sale. "The key to supporting the existing pipeline is the fact that the local veterinarian will receive a margin on all products sold through the site. One of the interesting things about this marketplace is that vets are the only medical professionals who are authorized to prescribe and dispense products through their clinics directly to their customers," says Morrison. "Currently VetMall.com is the only online marketplace for this. We are not just selling dog food and play toys like other dot-coms out there."
Upon reaching an agreement with Butler, Desktop began phase one of VetMall in March 1999, by connecting veterinarians with consumers on the Internet. "VetMall is unique in that it allows an individual veterinarian to develop a Web site using a simple wizard," says Morrison. "These sites showcase local information provided by the veterinarian, but also feature rich content provided by leading organizations in the vet industry, as well as interactive areas for children and educational information about pets and farm and ranch animals."
VetMall plans to leverage the relationship between the veterinarian and his/her clients to create traffic on the site. Says Morrison, "We believe that the consumer will enjoy greater value from purchasing products from a source they trust, their veterinarian."
VetMall launched the e-commerce portion of the site on October 1, 1999, offering more than 3,500 products for sale. "The key to supporting the existing pipeline is the fact that the local veterinarian will receive a margin on all products sold through the site. One of the interesting things about this marketplace is that vets are the only medical professionals who are authorized to prescribe and dispense products through their clinics directly to their customers," says Morrison. "Currently VetMall.com is the only online marketplace for this. We are not just selling dog food and play toys like other dot-coms out there."
Updating the Traditional Pipeline
The pipeline that VetMall.com integrates may be traditional, but the technologies it employs are anything but. VetMall is using BizTalk, an e-commerce framework based on Extensible Markup Language (XML) that makes it easy for organizations to integrate applications and do business over the Web regardless of platform, operating system, or underlying technology.
"It has been incredibly difficult for companies to easily conduct business over the Internet due to the lack of a single technical vocabulary for describing business data and processes," says Ken Liao, chief technology officer at VetMall. "When Microsoft came out with the whole idea of the BizTalk framework using XML documents, it was exactly what we needed for VetMall.com."
Although VetMall.com was in the development stage long before BizTalk came out, Desktop was quick to go with a new technology that mirrored its concept so completely. Says Liao, "We started hearing about the overall idea behind the BizTalk framework and BizTalk Server, and it just happened our direction coincided directly with Microsoft's concept of this product. It was a great match for us."
"It has been incredibly difficult for companies to easily conduct business over the Internet due to the lack of a single technical vocabulary for describing business data and processes," says Ken Liao, chief technology officer at VetMall. "When Microsoft came out with the whole idea of the BizTalk framework using XML documents, it was exactly what we needed for VetMall.com."
Although VetMall.com was in the development stage long before BizTalk came out, Desktop was quick to go with a new technology that mirrored its concept so completely. Says Liao, "We started hearing about the overall idea behind the BizTalk framework and BizTalk Server, and it just happened our direction coincided directly with Microsoft's concept of this product. It was a great match for us."
Microsoft Technology: Flexibility and Choice
The Business Internet is not a rigid approach. The idea is to give companies choices: choice of devices, choice of networks, choice of services, and choice of the right partners to develop solutions that connect them to customers, to other businesses, and to their employees. While technology can't provide a complete answer to all the problems businesses face, companies can make progress toward their goals by deploying solutions built on Microsoft technology.
The Microsoft platform, with Microsoft Windows at its core, offers several key advantages to organizations developing Internet-based business solutions. It can provide a complete technology infrastructure by enabling business functions to operate seamlessly from one end of the company to the other. You also don't have to rely exclusively on Microsoft software. Microsoft products are designed to work with your company's existing systems so you can mix and match Microsoft and non-Microsoft software when building end-to-end solutions. This means you don't have to throw away the significant investments you have already made in hardware, software, and training. Applications built on the Microsoft platform are also designed to be flexible enough to evolve and adapt to meet changing business conditions. The result is solutions that are easier to manage and maintain, more familiar to your workforce, more flexible, and less expensive to operate.
The Microsoft platform, with Microsoft Windows at its core, offers several key advantages to organizations developing Internet-based business solutions. It can provide a complete technology infrastructure by enabling business functions to operate seamlessly from one end of the company to the other. You also don't have to rely exclusively on Microsoft software. Microsoft products are designed to work with your company's existing systems so you can mix and match Microsoft and non-Microsoft software when building end-to-end solutions. This means you don't have to throw away the significant investments you have already made in hardware, software, and training. Applications built on the Microsoft platform are also designed to be flexible enough to evolve and adapt to meet changing business conditions. The result is solutions that are easier to manage and maintain, more familiar to your workforce, more flexible, and less expensive to operate.
Introducing The Business Internet
However, this opportunity also creates challenges. Business managers today are faced with the necessity of making a dizzying array of technology decisions. Their job isn't made any easier by information overkill. Open up the pages of any business publication and you will be bombarded with ads for e-commerce, e-business, and e-services. All of the messages can become confusing and overwhelming. Business managers need information that is useful and easy to understand so that they can make decisions quickly, and be confident that their choices will help their organizations transform the promise of the Internet into practical business realities.
There is no question that many companies today—whatever their size and industry—face several common business imperatives. They want to become more focused on their customers. They want to attract and maintain the best workforce possible and give their employees the tools to succeed. They want to maintain flexible internal infrastructures that allow their organizations to adapt quickly and effectively to changing market conditions. There is little debate over the need to evolve and adapt; the real question is how to achieve this goal.
That's where The Business Internet comes in. It has a straightforward aim: Make the Internet a part of everyday business operations with a combination of software, services, and expertise. Companies of all sizes should have the ability to move processes online, connect to suppliers and partners, understand and respond better to their customers, and empower their employees with the quick delivery of critical business information.
There is no question that many companies today—whatever their size and industry—face several common business imperatives. They want to become more focused on their customers. They want to attract and maintain the best workforce possible and give their employees the tools to succeed. They want to maintain flexible internal infrastructures that allow their organizations to adapt quickly and effectively to changing market conditions. There is little debate over the need to evolve and adapt; the real question is how to achieve this goal.
That's where The Business Internet comes in. It has a straightforward aim: Make the Internet a part of everyday business operations with a combination of software, services, and expertise. Companies of all sizes should have the ability to move processes online, connect to suppliers and partners, understand and respond better to their customers, and empower their employees with the quick delivery of critical business information.
Give It Away—And Watch Use Grow
Significantly, Sainsbury's is making the EQOS system available to suppliers free of charge, reiterating the company's commitment to improving customer service and to the VCI. Rowe says, "Our supply chain is increasingly being organized in a virtual way. This brings huge benefits but relies on information support systems that are integrated across company boundaries. We see Microsoft's vision of VCI as the motorway, a road on which we need to drive to get information moving around between companies."
Sainsbury's has given its top 25 suppliers licenses to EQOS Collaborator and will soon have its top 1,000 suppliers online. These suppliers are so happy with the system that many are recommending that their other customers use it as well.
And EQOS Collaborator is useful for far more than promotions. EQOS Systems has tailored versions of the solution for managing product introductions, product returns, delivery slot bookings, product lifecycles, and forecasting. Virtually any function that deals with coordination across a supply chain is fair game. Non-retail applications EQOS Systems is targeting include public administration, transportation, even finance.
Concludes Quinn, "Sainsbury's has taken an important lead in shaping collaborative information systems. There's no limit to what can be done with co-managed and cross-functional collaboration. Microsoft's underlying e-commerce technologies are moving this whole industry ahead very quickly."
Sainsbury's has given its top 25 suppliers licenses to EQOS Collaborator and will soon have its top 1,000 suppliers online. These suppliers are so happy with the system that many are recommending that their other customers use it as well.
And EQOS Collaborator is useful for far more than promotions. EQOS Systems has tailored versions of the solution for managing product introductions, product returns, delivery slot bookings, product lifecycles, and forecasting. Virtually any function that deals with coordination across a supply chain is fair game. Non-retail applications EQOS Systems is targeting include public administration, transportation, even finance.
Concludes Quinn, "Sainsbury's has taken an important lead in shaping collaborative information systems. There's no limit to what can be done with co-managed and cross-functional collaboration. Microsoft's underlying e-commerce technologies are moving this whole industry ahead very quickly."
Good News for Suppliers
In another situation, Oscar Mayer—in the U.K., a supplier of Sainsbury's brand of ready-made meals such as lasagne and curries—used Collaborator to spot a looming shortage of its meals in Sainsbury's stores during a promotion, and to also spot a huge supply languishing in a nearby warehouse. The Oscar Mayer supply chain team could direct warehoused meals immediately to Sainsbury's stores, where customers devoured them. Collaborator's intervention meant 300 cases of perishable meals were sold rather than left to spoil.
Rowe says, "With the EQOS system, we can circulate information and knowledge very quickly. Now that several of our suppliers have started to use it, there seems to be an increasing thirst for data that can improve decision-making. The good news for consumers is that they will get the product they want."
Sainsbury's can also place new lines of goods, as well as product promotions, in stores in a much shorter time. Quantities can be predicted and managed much more accurately, whereas before, there was difficulty in matching correct stock-to-demand ratios. Rowe says, "Now we can co-manage forecasts with our suppliers, whereas previously we worked in isolation. Branded suppliers will have a far better idea about the impact of advertising, promotions they are running, and so on, so we can update our forecasts of their products on a continuous basis."
Another hidden benefit that the customer may not see is the ability to pass on consumer comment to suppliers in a quick and efficient manner. Rowe says, "We will be able to pass on consumer dislikes, comments, and desire much more efficiently. Previously, the paperwork was a bit of a nightmare, and the feedback loop was complex. With Collaborator, we can now focus on responding to customers quickly."
Rowe says, "With the EQOS system, we can circulate information and knowledge very quickly. Now that several of our suppliers have started to use it, there seems to be an increasing thirst for data that can improve decision-making. The good news for consumers is that they will get the product they want."
Sainsbury's can also place new lines of goods, as well as product promotions, in stores in a much shorter time. Quantities can be predicted and managed much more accurately, whereas before, there was difficulty in matching correct stock-to-demand ratios. Rowe says, "Now we can co-manage forecasts with our suppliers, whereas previously we worked in isolation. Branded suppliers will have a far better idea about the impact of advertising, promotions they are running, and so on, so we can update our forecasts of their products on a continuous basis."
Another hidden benefit that the customer may not see is the ability to pass on consumer comment to suppliers in a quick and efficient manner. Rowe says, "We will be able to pass on consumer dislikes, comments, and desire much more efficiently. Previously, the paperwork was a bit of a nightmare, and the feedback loop was complex. With Collaborator, we can now focus on responding to customers quickly."
Good News for Suppliers and Consumers
Sainsbury's first rolled out EQOS Collaborator to its major suppliers and is working to offer it to all 4,000 suppliers. Nestlé embraced the collaboration system immediately. Tom McGuffog, planning and logistics director at Nestlé U.K., says, "Nestlé invests millions of pounds ensuring that our information systems are optimized to provide our customers, the retailers, with the best possible service. Internet-based systems like EQOS Collaborator gives us the opportunity to synchronize dynamic supply chain information with that of our customer. This helps to ensure that we both deliver the best possible service to our common customer: the consumer."
He continues, "We believe this project with Sainsbury's will deliver some very tangible benefits—improved communications leading to better on-shelf stock availability, and therefore to more cost-effective promotions. That is good news for our customers and consumers."
Other leading suppliers using Sainsbury's Collaborator include Proctor and Gamble, Heinz, Unilever, Kimberly-Clark, Kelloggs, and Coca-Cola.
Britvic, the U.K. distributor for Pepsi and other leading soft drink brands, found within 48 hours that a Pepsi promotion was substantially outstripping forecast. Using Collaborator, the Sainsbury's buyer and Britvic representative were able to track sales daily and increase production to meet demand. As a result, Sainsbury's rescued the promotion from a potential stock-out catastrophe and had plenty of Pepsis on hand for thirsty customers.
He continues, "We believe this project with Sainsbury's will deliver some very tangible benefits—improved communications leading to better on-shelf stock availability, and therefore to more cost-effective promotions. That is good news for our customers and consumers."
Other leading suppliers using Sainsbury's Collaborator include Proctor and Gamble, Heinz, Unilever, Kimberly-Clark, Kelloggs, and Coca-Cola.
Britvic, the U.K. distributor for Pepsi and other leading soft drink brands, found within 48 hours that a Pepsi promotion was substantially outstripping forecast. Using Collaborator, the Sainsbury's buyer and Britvic representative were able to track sales daily and increase production to meet demand. As a result, Sainsbury's rescued the promotion from a potential stock-out catastrophe and had plenty of Pepsis on hand for thirsty customers.
Effortless Links with Legacy Systems
The system is built on a Windows NT Server platform, hosted by the Windows NT Server Internet Information Server and browsed by Microsoft Internet Explorer. Information is stored in a SQL Server database, and can be easily integrated into other legacy databases. Importantly, the EQOS system can be hosted on many servers, giving suppliers the ability to upload and download information to and from the system. EQOS Administrator, which is the main program for building and deploying applications, has been developed using Microsoft Visual Basic® development system. EQOS also has a Web-based version of Administrator that allows users to build and deploy their own collaborative applications. And the e-commerce functionality, utilizing the dynamic data collected, is provided by Microsoft Site Server 3.0 Commerce Edition.
In the future, EQOS may build the Microsoft Commerce Interchange Pipeline (CIP) technology into the solution. The CIP, a significant feature of Site Server 3.0, Commerce Edition, is a simple system for enabling application-to-application interchange of structured business information using the Internet, e-mail, or third-party EDI Virtual Added Networks (VANs). The CIP provides a standard method of sharing any type of business-critical data over any network among businesses.
EQOS Managing Director Mike Quinn says, "We're employing very clever technology between trading partners, which doesn't require either company to change their core systems. Rather, it pulls information from legacy databases. EQOS gives Sainsbury's the opportunity to do new things without going back and recoding their old systems."
In the future, EQOS may build the Microsoft Commerce Interchange Pipeline (CIP) technology into the solution. The CIP, a significant feature of Site Server 3.0, Commerce Edition, is a simple system for enabling application-to-application interchange of structured business information using the Internet, e-mail, or third-party EDI Virtual Added Networks (VANs). The CIP provides a standard method of sharing any type of business-critical data over any network among businesses.
EQOS Managing Director Mike Quinn says, "We're employing very clever technology between trading partners, which doesn't require either company to change their core systems. Rather, it pulls information from legacy databases. EQOS gives Sainsbury's the opportunity to do new things without going back and recoding their old systems."
The Answer: Constant Communication
After the basics are established, Collaborator arbitrates and manages a flow of planning information among Sainsbury's and its suppliers. Sainsbury's might prefer the promotion to be a three-for-one offer, while the supplier would rather offer a two-for-one offer. Collaborator acts as process manager so nothing is forgotten, and prompts for next steps through e-mail.
Once planning is complete, the system taps both Sainsbury's and the supplier's forecasting databases to see how they match up for that particular product promotion. Sometimes they're miles apart. Collaborator doesn't create a forecast but allows the two sides to share their forecasts and move them closer together. Sainsbury's might send its coffee promotion forecast to Nestlé, and Nestlé might ask why they are forecasting such a big uplift. Sainsbury's can tell them they are offering a chocolate promotion at the same time.
Collaborator also lets Sainsbury's and suppliers look at actual inventories and decide what product to move where. For example, they may concur that they need to move 10,000 cases of cola from northern to southern England during a promotion, due to increased demand in that particular region.
Once the promotion is underway, EQOS Collaborator lets Sainsbury's and its suppliers track its progress, in near-real time. "Most promotions last one to four weeks, but you can usually tell within 48 hours how a promotion is doing," Rowe says. "That 48-hour sales information wasn't usually available until months later. EQOS allows us to capture sales data and share it with suppliers as it's coming in. This is a tremendous help to us in adjusting or discontinuing promotions. And it has huge ramifications for customer satisfaction."
Once planning is complete, the system taps both Sainsbury's and the supplier's forecasting databases to see how they match up for that particular product promotion. Sometimes they're miles apart. Collaborator doesn't create a forecast but allows the two sides to share their forecasts and move them closer together. Sainsbury's might send its coffee promotion forecast to Nestlé, and Nestlé might ask why they are forecasting such a big uplift. Sainsbury's can tell them they are offering a chocolate promotion at the same time.
Collaborator also lets Sainsbury's and suppliers look at actual inventories and decide what product to move where. For example, they may concur that they need to move 10,000 cases of cola from northern to southern England during a promotion, due to increased demand in that particular region.
Once the promotion is underway, EQOS Collaborator lets Sainsbury's and its suppliers track its progress, in near-real time. "Most promotions last one to four weeks, but you can usually tell within 48 hours how a promotion is doing," Rowe says. "That 48-hour sales information wasn't usually available until months later. EQOS allows us to capture sales data and share it with suppliers as it's coming in. This is a tremendous help to us in adjusting or discontinuing promotions. And it has huge ramifications for customer satisfaction."
The Answer: Constant Communication with Suppliers
Rowe realized that Sainsbury's needed far better, far more continuous communication with its suppliers. The company had moved from paper catalogs to electronic catalogs to a Web-based information service for suppliers. Now they needed to move to true online collaboration. Rowe says, "We saw the need for continuous information-sharing and joint decision-making."
Sainsbury's evaluated several off-the-shelf collaboration applications and chose one called EQOS Collaborator from Microsoft Certified Solutions Provider EQOS Systems. Co-founder and managing director at EQOS Systems, Mike Quinn, says, "We decided to develop EQOS Collaborator using Microsoft technologies, because this enabled us to deliver a high degree of collaborative functionality very quickly. The wide range of Microsoft tools and available skills in the market was also an important factor. In addition, EQOS's vision of providing a unique collaborative software tool to enable supply chain integration is entirely consistent with the Value Chain Initiative (VCI). Working with Microsoft on VCI is enabling us to reach a wide base of companies who are looking toward innovative software solutions for their supply chain needs."
EQOS Collaborator is a Web forms-based collaborative application development toolkit that Sainsbury's has used to build a Collaborative Planning System (CPS). Sainsbury's first application on CPS tackles the complex area of promotions planning, measurement, and evaluation. The system prompts individuals for information such as promotion type, promotion date, product being promoted, promotion pricing, promotion objectives, and so on. Some of this information is pulled automatically from legacy databases (such as product and forecasting), and some is entered in real time. For example, the Sainsbury's buyer enters the product code, and Collaborator drops in the product name, the usual price, the usual sales forecast for that item, and the quantity of stock in that store and in Sainsbury's warehouses.
Sainsbury's evaluated several off-the-shelf collaboration applications and chose one called EQOS Collaborator from Microsoft Certified Solutions Provider EQOS Systems. Co-founder and managing director at EQOS Systems, Mike Quinn, says, "We decided to develop EQOS Collaborator using Microsoft technologies, because this enabled us to deliver a high degree of collaborative functionality very quickly. The wide range of Microsoft tools and available skills in the market was also an important factor. In addition, EQOS's vision of providing a unique collaborative software tool to enable supply chain integration is entirely consistent with the Value Chain Initiative (VCI). Working with Microsoft on VCI is enabling us to reach a wide base of companies who are looking toward innovative software solutions for their supply chain needs."
EQOS Collaborator is a Web forms-based collaborative application development toolkit that Sainsbury's has used to build a Collaborative Planning System (CPS). Sainsbury's first application on CPS tackles the complex area of promotions planning, measurement, and evaluation. The system prompts individuals for information such as promotion type, promotion date, product being promoted, promotion pricing, promotion objectives, and so on. Some of this information is pulled automatically from legacy databases (such as product and forecasting), and some is entered in real time. For example, the Sainsbury's buyer enters the product code, and Collaborator drops in the product name, the usual price, the usual sales forecast for that item, and the quantity of stock in that store and in Sainsbury's warehouses.
Tripping Over a Complex Process
Sainsbury's has worked diligently to satisfy customers, using criteria established by an initiative called Efficient Consumer Response (ECR). ECR aims to provide the retail consumer with the highest quality service through integrated partner collaboration, information-sharing, and efficient supply chain operations. In the area of product promotions, ECR estimates that $4 billion can be saved across Europe by linking stores and suppliers more efficiently.
Consider the complexity of the average supermarket promotion. Sainsbury's might decide to offer a promotion on Nestlé coffees: buy one jar, get another jar free. Sounds simple. But, how does Sainsbury's calculate how much extra coffee to have on hand? If everything goes right and the promotion is a big success, the chains sell more coffee and boost profits. However, if the promotion is a big success and Sainsbury's orders too little coffee, then inventory runs out, customers are frustrated, and profits are limited. Conversely, if Sainsbury's orders too much coffee and the promotion bombs, the chain is left with unsold merchandise. In the case of perishable items like bananas or yogurt, Sainsbury's and the supplier takes a huge loss, because they can't sell those items later.
Multiply this scenario by the thousands of promotions going on simultaneously with thousands of suppliers, and you have the makings of a colossal logistical nightmare. "We were barreling into the next promotion without understanding the impact of the last one," Rowe says. "There are hundreds of people at Sainsbury's and thousands of people in our supplier base involved in promotions—brand managers, product managers, line managers, event managers, advertising managers, and the list goes on. The time for planning a promotion can be very short—anywhere from a week for perishable items like fish or fruit to several months for other products. We needed a way to synchronize people and information to correctly estimate stock levels, keep customers happy, and reduce product waste."
Consider the complexity of the average supermarket promotion. Sainsbury's might decide to offer a promotion on Nestlé coffees: buy one jar, get another jar free. Sounds simple. But, how does Sainsbury's calculate how much extra coffee to have on hand? If everything goes right and the promotion is a big success, the chains sell more coffee and boost profits. However, if the promotion is a big success and Sainsbury's orders too little coffee, then inventory runs out, customers are frustrated, and profits are limited. Conversely, if Sainsbury's orders too much coffee and the promotion bombs, the chain is left with unsold merchandise. In the case of perishable items like bananas or yogurt, Sainsbury's and the supplier takes a huge loss, because they can't sell those items later.
Multiply this scenario by the thousands of promotions going on simultaneously with thousands of suppliers, and you have the makings of a colossal logistical nightmare. "We were barreling into the next promotion without understanding the impact of the last one," Rowe says. "There are hundreds of people at Sainsbury's and thousands of people in our supplier base involved in promotions—brand managers, product managers, line managers, event managers, advertising managers, and the list goes on. The time for planning a promotion can be very short—anywhere from a week for perishable items like fish or fruit to several months for other products. We needed a way to synchronize people and information to correctly estimate stock levels, keep customers happy, and reduce product waste."
Sainsbury's Supermarkets
Sainsbury's, a leading United Kingdom grocery chain founded in 1869, opened its first store in Drury Lane, London, with the promise of "highest quality at keenest prices." In 1998, with around 400 stores in the U.K., Ireland, and the United States, and total sales of £11.6 billion, Sainsbury's is still bringing the best products and high service quality to an increasing number of consumers. In a market that is fiercely competitive, product promotions, customer loyalty, quality of produce, and availability all drive market share and position.
Special promotions account for a whopping £2 billion—or about 10 percent—of all Sainsbury's sales. Such promotions range from a "buy one, get one free," offer, to a discounted price, to a product tie-in offer, for example, the customer gets a free bag of potato chips with every six-pack of cola. Sainsbury's runs about 2,000 promotions at any one time, involving billions of pounds worth of products, thousands of players, and an incredible array of logistical coordination. Despite this, the company had to manage the promotional planning process using a series of paper-driven systems that meant poor coordination, planning, and evaluation of promotions. "Promotions account for a large percentage of our sales, but we were running them without sufficient information," explains John Rowe, Sainsbury's director of logistics.
With the help of Microsoft Certified Solutions Provider EQOS Systems, Ltd., Sainsbury's began streamlining this critical process. The chain built a Web-based supply chain planning and collaboration system that allows suppliers and buyers to work through every detail of a product promotion in advance and to track its success in real time. The solution was created in a matter of weeks using Microsoft e-commerce technologies, such as Site Server 3.0 Commerce Edition, Windows NT Server 4.0, and SQL Server 6.5. As a result of this new application, Sainsbury's is reducing the time spent in planning promotions and is eliminating the chance of running out of inventory. Sainsbury's and its suppliers can deploy stock where needed, and increase promotion-related revenues.
Special promotions account for a whopping £2 billion—or about 10 percent—of all Sainsbury's sales. Such promotions range from a "buy one, get one free," offer, to a discounted price, to a product tie-in offer, for example, the customer gets a free bag of potato chips with every six-pack of cola. Sainsbury's runs about 2,000 promotions at any one time, involving billions of pounds worth of products, thousands of players, and an incredible array of logistical coordination. Despite this, the company had to manage the promotional planning process using a series of paper-driven systems that meant poor coordination, planning, and evaluation of promotions. "Promotions account for a large percentage of our sales, but we were running them without sufficient information," explains John Rowe, Sainsbury's director of logistics.
With the help of Microsoft Certified Solutions Provider EQOS Systems, Ltd., Sainsbury's began streamlining this critical process. The chain built a Web-based supply chain planning and collaboration system that allows suppliers and buyers to work through every detail of a product promotion in advance and to track its success in real time. The solution was created in a matter of weeks using Microsoft e-commerce technologies, such as Site Server 3.0 Commerce Edition, Windows NT Server 4.0, and SQL Server 6.5. As a result of this new application, Sainsbury's is reducing the time spent in planning promotions and is eliminating the chance of running out of inventory. Sainsbury's and its suppliers can deploy stock where needed, and increase promotion-related revenues.
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