Real-time processing -- the ability to gain instantaneous access to key information from virtually any system within a company -- is emerging as a topic of hot debate within many segments of the industry.
In areas such as electronic payment systems, real-time processing to access on-line debit, credit and check authorization programs is crucial. In other areas, however, the rallying cry may focus more on quicker rather than immediate access to data. The issue of how fast is fast enough is especially critical today as all segments of the industry seek to take full advantage of data processing technology and implement a wide range of information-intensive programs, often under the industry's Efficient Consumer Response umbrella.
Here is how SN's discussion with five key executives went on the subject:
SN: Must the industry begin moving to real-time processing to compete in today's efficiency-driven market?
PETER ROLANDELLI: There absolutely is a need to access information faster. Today I may get information weekly from my point of sale, tomorrow I will be getting that on a daily basis. There is no question about that. The real questions is, can companies digest this information on a daily basis?
Many people say that we are not using the weekly information we now have. But the industry will still move toward daily processing, and there is always that percentage of companies ahead of everybody else. Most mass merchandisers are using daily data today. We're still behind them. The technology to get information hourly is available today, but I'm not sure the demand or need is there.
BILL MAY: We're finding that real-time data processing may not be as important to us as speed, which I would define as receiving data on an overnight basis or in a batch process and then being able to look at it later in the day. For many of the day-in and day-out business issues, real-time processing isn't absolutely mandatory. Having that information available in a sensible time frame, meaning overnight or batched during the day and looked at later in the day, works well enough for us. So real-time in certain things, yes, but it isn't something we need in every area.
PATRICK STEELE: From a sales and expense trend analysis standpoint, I'm not sure real-time computing, obtaining absolute up-to-the-minute information, is necessary. I think same-day or next-day information can satisfy many of the industry's needs. I'm not even sure the demands of just-in-time inventory dictate the need for up-to-the-minute vs. same-day information.
Beyond real-time, however, there is a growing need for faster processing of data. With continuous replenishment and quick response types of demands and the other supply chain issues that surround ECR, the move toward faster processing of information is becoming a very active arena. Companies increasingly need to get information back on a more timely basis to make replenishment decisions at the store level, at the warehouse and with manufacturers. It is moving up the need ladder pretty fast.
RAY HAMILTON: I don't think all the publicity about real-time computing is hype. Considering the curve of real-time activity now, it makes sense. It is now possible to set up a store with frame relay for about $300 a month that will provide 56 or 128 kilobytes of bandwidth and provide a fixed communication cost.
SN: Are there any areas where real-time processing is critical and is it achievable? HAMILTON: We have a wide area network that is very important to us, especially for ECR. There is a growing need for obtaining information quickly. It is no longer OK to spend two or three days pulling back and fixing up data for critical programs such as computer-assisted ordering and labor management. In decision-support systems, the goal is to have someone working with a laptop looking at real-time data.
The time clock has to be attached to the WAN. If I'm one person trying to manage 30 stores, I can do a lot better if I know I'm having a problem on the third or fourth day of a pay period instead of waiting for the end of the period. So labor management would be a good application for real-time computing. It is also necessary for credit and check approval to help prevent fraud. There is also the maxim that if you build a bandwidth, they will come. That means, once you have the capability, ideas start popping about how to use it. DAVID HAYES: The one thing I think of immediately in terms of real-time applications is in communications to get product recalls off the shelf. Many people use satellite transmission for that purpose now. But overall, I don't think real-time computing is a priority that would take precedence over other initiatives for us.
There is some hype involved in the discussion about the need for real-time data, though. Airlines and some other industries need real-time systems, but I think for most small retailers, downloading information on a daily basis is fine. Real-time is not a big factor in our business. One area where it might play a greater role, though, is in buying diverted product.
MAY: Where real-time processing will be critical is in warehousing and distribution. As we move in the direction of cross-docking and flow-through, we need to know real-time when each truck is leaving a vendor or manufacturing site, where it is along the highway, and what time it will be arriving at our back dock so we have a door available and the appropriate labor on hand to off-load the product, sort it and cross-dock it onto trucks waiting on the other side of the distribution center. We will be seeking real-time data to accomplish that.
Obtaining real-time data is achievable in the areas where it is needed, and some pieces of that are already here. In other industries, such as over-the-road trucking using satellite communications, it is possible to know where each truck is to within one-tenth of a mile and when it will arrive at a specific destination. Again, our industry is somewhat behind other industries in this area. But it is very doable. It is just a matter of how quickly we integrate these capabilities into wholesale food distribution.
STEELE: Real-time computing is necessary in the area of electronic payment transaction systems at the front end. It is critical that both retail and financial institutions are protected, that if someone is paying for a product, there is money to pay for it. Everything is now moving faster and faster and there is a growing demand for real-time solutions in this area.