UNITED SUPERMARKETS UPGRADING SYSTEMS

CHRIS O'LEARY

LUBBOCK, Texas -- United Supermarkets here is embarking on an extensive program to revamp its hardware and software systems and implement a technology-driven merchandising strategy.

As part of a drive to enhance operating efficiency and hike productivity, United is consolidating its two hardware systems onto a single platform, said Terry Driscoll, management information services director for the 43-store chain here.

In addition, United is about to launch a series of software-driven merchandising programs, including one in which its prices could be changed automatically to beat competitors' offers.

Other programs will allow United to track item movement extensively for the first time and implement or upgrade several Efficient Consumer Response-related initiatives, such as direct store delivery and continuous replenishment programs.

"We needed more flexible systems than we had. The [upgrade] is going to drive a lot of things, including a number of ECR programs. We need to expand the systems we have before we can go further on anything we want to do," Driscoll said.

"We have to get a handle on our merchandising from a host standpoint before we can handle direct-store-delivery correctly and before we can analyze our profits at the item level," he added.

The new software programs, from JDA Software, Scottsdale, Ariz., will help United build and implement a comprehensive merchandising strategy, Driscoll said.

United employees are now in the process of collecting extensive data that will be used to take advantage of a sales analysis program, he said. "We're now getting item level movement and item level sales [from our stores] daily. We're building a file to feed the

analysis system."

The program will allow the chain to analyze product movement from its wholesaler, Fleming Cos., Oklahoma City, to store checkouts. "Today we don't do our own warehousing so we're tracking what we're buying from Fleming and some vendors too," he said. Another new program will help give United an edge over its competition in the critical area of pricing, Driscoll said. The chain, he said, will be able to enter prices of competing stores and, if desired, run a program to automatically counter or beat their offers.

"If we want to make it our policy that we're always the cheapest, and a competitor comes in at a cheaper price, we could make the system automatically change our price to theirs," Driscoll said.

Other new programs are designed to enhance United's price and cost management abilities. "As soon as we find out about a price change that's going to happen, we can enter it in the program with the dates it will be effective," Driscoll said. "The system will take over from that and download information to our point-of-sale system at the proper time. [The programs] will drive our POS pricing and our gross profit reports, as well as what's going to happen to prices in the future."

Though United made a substantial investment in the programs, it was a necessary step, he said. "We recognized that the software we have now is not going to take us forward in the future. The new programs are going to allow us a lot more growth to do other things we need to do in the future."

The consolidation of United hardware platforms, similarly, is designed to help increase productivity in the chain's management information systems department.

With the consolidation, United will run all its financial and merchandising programs on a single IBM AS/400 system. Before, processing was split between two systems.

Driscoll said United also went with these programs because of the potential to manage warehouse operations. "There's also potential some day if we decide we want to open our own warehouse," he said.