PEAPOD AIMS TO BOOST SUPPLY CHAIN PRODUCTIVITY

PATRICK SCIACCA

SKOKIE, Ill. -- Peapod, the Internet grocery company based here, is planning to integrate a new distribution management system in an effort to improve supply chain visibility and operating efficiency.

"I would say we're looking [to achieve] another 15% to 20% improvement in productivity, primarily [in] receiving, putaway, pack and ship," said John A. Caltagirone, chief logistics and operations officer for Peapod. "We certainly feel this will help us [improve] service levels and inventory control," he added.

"I think it's more of a total integration, we're getting more involved in purchasing and planogramming and things of that nature," Caltagirone said. "[The new system] is what I'm going to call the latest and greatest, a step up," he added.

The new distribution management system, which is from the McLane Group, a Temple, Texas-based food-distribution systems company, comes as part of a strategic partnership with the third-party.

"We're going to go from the grain field to the pantry," Caltagirone added, noting that the technology will provide more functionality by integrating everything from the warehouse to merchandising.

The integrated distribution management system should also allow for full visibility of the supply chain across the entire company. This is currently not the case, according to the company.

The use of the third-party's technology is a departure from Peapod's traditional in-house software development. Caltagirone noted that in-house systems development takes up a lot of time.

Drayton McLane Jr., chairman of the McLane Group, will also make a significant personal investment in Peapod and join Peapod's board of directors, according to the retailer.

The retailer said the technology would be integrated into existing operations such as Boston, New York, San Francisco and Chicago as well as added to all new market operations, but a timeline for implementation has not been set.

"We will be expanding into new markets after the New Year," Caltagirone said.

"We're taking a look at when we want to roll it out and looking at what our business processes are," he said. "It's going to be next year for sure," Caltagirone added.