PRIOR ACQUISITIONS GIVE SUPERVALU IT INTEGRATION EXPERIENCE

CHRISTINE BLANK

ORLANDO, Fla. - As Supervalu gets ready to absorb major chunks of Albertsons over the next several months, the Minneapolis-based wholesale/retail giant already has experience integrating the IT side of an acquired company.

Supervalu has been in acquisition mode over the last several years, picking up the assets of Cub Foods, bigg's, Farm Fresh, Sav-A-Lot and other banners. How Supervalu was able to integrate the systems operated by those companies was explained by John Eversman, Supervalu's vice president of retail technology, at Lawson Software's annual Conference and User Exchange here April 9-12.

"Part of the challenge we faced was that every one of these [acquired companies] had their own data tools," Eversman said. "We needed some kind of plan and architecture that would support those companies."

Supervalu found it by partnering with Lawson, based in nearby St. Paul, Minn., to implement the software company's efficient-assortment, strategic-pricing and library applications.

In integrating the acquired companies, Supervalu needed to understand several key systems functions, including how each company organized data and handled category management. Item and category data varied so much across banners that an SKU classified as a frozen food item at one chain could be categorized as a general merchandise item at another, Eversman said.

"We needed a common merchandise structure across all retailers and [the ability to] share information across companies," Eversman said.

Supervalu and Lawson took several steps to organize data, such as analyzing direct-store delivery and category management for each chain to determine costs by item, supplier and store. They quickly found that POS and DSD information from multiple store hosting systems was causing confusion. As a result, "we developed one host [Lawson Library] that handles all of these: POS, DSD receiving, fresh department production scales and shelf tags," Eversman said.

Lawson also helped Supervalu improve its data warehouse system to better understand its POS product movement.

The various banners under Supervalu also needed to improve their in-store POS records. "Items were being sold in the stores that no one in the corporate office knew we were selling," Eversman said.

Now, stores are required to enter new items into the Lawson system to get corporate approval, or at least acknowledgement that the item has been added. "This helps us with pricing and tag maintenance, planogram implementation, and promotion and display support," Eversman said.

Supervalu and Lawson also boosted promotion and ad planning. Color-coded marks on specific SKUs alert category managers that they need to review those items for possible pricing changes.

Now that it has aligned the banners' multiple technologies, Eversman said Supervalu is ready for the next step: pricing. "Our goal was to get standardized, now we're in a position to begin strategic pricing," Eversman said. "We have better information on which products sold as well as causal items, such as products sold during Easter week."

To help improve strategic pricing and other merchandising techniques, Supervalu is working with a group of other supermarket chains in the U.S. and Europe to support Lawson in developing "next generation merchandising software," according to Eversman.