A&P REPORTS SUCCESS WITH SATELLITE SYSTEM

CATHY COHN

PALM SPRINGS, Calif. -- A&P's switch to a satellite system is yielding strong dividends and increased communications capabi-lities, according to Jerome Schwartz, vice president of technical services for the Montvale, N.J.-based chain.

A&P began switching from a ground-based network to a satellite system last year. It is now on line with the high-technology communications system at about 650 of its stores, with more locations to be added this month.

Among the prime benefits of the satellite system are expanded communications capabilities and fewer network outages, Schwartz said at the IBM Retail Executive Conference here.

A&P also is looking to save money over the long run by switching to a satellite system. "We believe the cost to us will be lower over the life of the asset," Schwartz said. Although the capital investment in the satellite system was significant, the company expects to recoup that investment in saved networking costs. The operational costs of the satellite system also are lower, he said.

But it is the data transmission and communications benefits that A&P is most excited about. The chain is using the satellite system for a wide variety of programs, including universal check verification, credit card transactions and electronic benefits transfer.

It is also used for batch transmissions of data, including price management information, frequent-shopper programs, customer activity, purchases by universal product code, point-of-sale data, payroll and software distribution.

The software distribution aspect, in particular, is "used extensively," and saves the chain an enormous amount of time in delivering important software to individual

stores, Schwartz said.

In the future, A&P plans to expand the services to include electronic mail, integrated ordering, pharmacy communications and energy management, among other areas, he said.

Schwartz also is pushing for online video to be installed as part of the satellite program as soon as possible. "For merchandisers to be able to discuss sales programs with stores would be tremendous. The opportunities are immense," Schwartz said.

He added that one division is ready to go online as soon as he gets approval from senior management.

According to Schwartz, the satellite system overall is considerably more reliable than the land-based network. But some new types of problems have cropped up.

While tests showed that the satellite outage rate is far below the 10% rate seen in the terrestrial network, there now are outages caused by sun, rain and ice, which is a problem that still needs to be addressed.

In addition, some stores, such as those in Manhattan, are not able to tap into the satellite system because there is no direct "line of sight." The executive said A&P will build a terrestrial network where it is unable to use the satellites.

The biggest problem A&P now faces with the satellite is recovery following an outage, Schwartz said. "We need to find what is the slowest recovery element of the network and make it faster," he said.

Initially, it was taking 2.5 hours to recover from an outage, Schwartz said. "That was unacceptable." In its last test, recovery was made in 20 minutes. "We should be able to do it in 2.5 minutes," he said.

A&P's satellite program runs through two data centers, one in the company's Montvale, N.J., location and a second in Columbia, Md. It uses Scientific Atlanta's Skylinx.25 satellite system and IBM's 3090-200E processors, with 3745 communications controllers and 3174 cluster controllers, he said.