OKLAHOMA CITY -- Homeland Stores here will roll out an automated direct-store-delivery system that will serve as the cornerstone for a computer-generated ordering program.
The retailer, now using a manual DSD system, in September will equip one store with handheld frequency modulation devices linked directly to the corporate mainframe. Following the one-store pilot, 23 Homeland stores will have automated DSD installed by year's end and the remaining 80 stores will go on-line in 1996.
Automated DSD will vastly reduce labor hours and improve ordering accuracy, said Bill Rulla, vice president of management information services and electronic data processing. More importantly, he added, the system will provide essential data needed to launch a CGO program next year.
"Since we will capture everything coming in the back door [through automated DSD], and already capture everything going out the front door from scanning, we're going to use that data base to build a system to automatically do reordering for the stores," he said.
Computer-generated ordering differs from computer-assisted ordering in that it requires very little or no manual intervention. CGO should deliver increased product accuracy and reduced back-room inventories, Rulla noted.
Before computer-generated ordering can be implemented, an automated DSD system must be in place and Homeland is now building a corporate-level order data base and linking it to in-store processors, Rulla said.
"We're going to have a master data base at the corporate level and, where we can, we're going to get [vendor] deals from our suppliers through electronic data interchange.
"We're going to send any changes to that data base out to the store level on a daily basis, so that all of our stores have the current
deals, authorized products and authorized vendors in their data base," Rulla said.
Upon arriving at the dock, vendors will key their orders into the store's handheld FM unit, which will then electronically send the information to the in-store processor.
The processor "will produce a receiving document for our back-door receiver to go through and verify that the products are there, while creating an electronic invoice at the same time," he said.
"If there is any discrepancy at that point, we will inform the supplier there is a discrepancy in the price and we will pay what is on our file, since we are getting those files electronically from their company," Rulla added.
The electronic invoices generated will be pulled back each day to the corporate level and fed directly into the accounts payable system, he said.
The DSD system will vastly improve Homeland's current receiving process, which requires an extensive amount of paperwork and manual product checks.
"The receiver has to go through and manually count everything and check it off," Rulla explained. "If there are any discrepancies in the invoice, they're not caught until it hits the accounting department.
"The labor savings will be fantastic," he added. "I won't have people fooling with paper. Paper won't be delayed because somebody put it in a drawer and forgot to send it in and we lost our discount."
Homeland anticipates similar benefits to come from the CGO system, which will be run based on daily sales and inventory reports.
"It will be computer-generated ordering based on set points within the store," he said. "It will do a daily algorithm check to look at what [product] moved in that period of time."
Although CGO is highly automated, it is also extremely flexible and individual stores will be able to modify orders as needed.
"We'll give the stores the ability to add to that order if they want to do an endcap or display," he said. "But the majority of the work will be done automatically."