Many wholesalers and retailers no longer rely on their information systems staffs to generate timely reports for data analysis. Instead they use decision-support software to give associates access to specified information from bulging corporate data warehouses.
The availability of internal fiscal and item movement data, for example, is bringing improvements in areas such as category management, item maintenance files and preferred customer payment methods.
Despite strong results from the use of decision-support technology, however, some retailers are still adjusting to the idea that information distributed to the PCs on their desks is true, live and actionable.
"Associates across the board benefit from decision-support, because each department has access to information outside their department that is now available through stored databases," said Bob Drury, vice president of management information systems for Schnuck Markets, St. Louis.
The decision-support process begins by creating a database to store all aspects of business data that associates will query to make business decisions. The user looks at the client tools on their PC to generate the queries to gain access to data. The next level involves the extraction tools that present the information associates need to develop reports.
"These extraction tools are the backbone to operating the decision-support system," said Konrad Spicer, manager of source data analysis and control for Ukrop's Super Markets, Richmond, Va. "However, you need all the pieces in place to make the decision-support system work."
While decision-support tools potentially are available to virtually any associate level or operating department, most companies using the technology see its greatest application in supporting category management and marketing departments.
"Decision-support helps category managers and those in marketing to understand what the business is doing and how to respond," said Schnuck's Drury. "Each one can take a personal view of information pertinent to their job and make very tailored reports and decisions."
Ukrop's Super Markets, Richmond, Va., recently jumped into the use of decision-support to make better business choices to increase their company's bottom line. "We spent almost four years dabbling in category management prior to implementing decision-support," said Spicer. "We ended up spending money and not getting good results."
This realization prompted Ukrop's to investigate what decisions needed to be made to do category management properly, and what information was needed on a daily basis. "Ultimately, we investigated the decision-support components we needed, and finally developed our system."
Ukrop's uses its decision-support system to track the movement of its items at store level. Since implementing the system in July, the retailer has already been able to clean slow- or non-moving items out of its stockkeeping units database.
"We started by investigating our general merchandise and health and beauty care product SKUs. After analyzing 22 weeks of data in our database, we found there was no movement on 20% of those SKUs, and another 30% sold less than five units in the same time frame," Spicer explained.
Ukrop's category management analysis found that only half the HBC SKUs contributed directly to profits for the department.
"We used to be hesitant about taking items out of the system. Without the decision-support tools querying if these items contribute to our profits, the products would end up staying in the database until the end of time," he added.
Even with 10 years' experience using decision-support tools, Abco Foods, Phoenix, was still surprised when it began to drill down and pinpoint which payment methods generated the most sales per customer.
"By giving our accounting associates access to decision-support, we found out that almost 50% of our sales are paid for with plastic, whether [it be] credit or debit cards, " said Jerry Johnson, vice president and chief information officer for Abco.
Abco also discovered that cash transactions averaged about $12, while credit transactions averaged $30 or more. "We also see that the use of checks in our stores is declining through the increased use of plastic," Johnson explained. "This is a good thing, as this switch is helping to reduce our bad-check losses."
In addition, the use of decision-support technology also enabled Abco to establish which debit and credit cards generate the most sales per customer.
Even with some dramatic decision-support success stories, the biggest challenge for some retailers is getting employees to use the tools and accept the data. United Grocers, Portland, Ore., a company that went live with the technology eight months ago, is still trying to overcome this hurdle.
"In the past, our associates were comfortable inputting data on standard spreadsheets based on stacks and stacks of paper reports," said Michael Brown, manager of retail systems for United Grocers.
"The biggest challenge we face is getting the users to accept the system and believe the data that are being presented to them are real," he added. "They need to understand that decision-support is an automated process that presents real data, in real time, and that it means something that has an impact on our business."