WAL-MART EXECUTIVE SAYS INVOLVE STORE-LEVEL STAFF

CHRIS O'LEARY

WASHINGTON -- Whatever innovations retailers undertake to increase productivity are bound to fail unless employees on the front line are made part of the process, according to Randall Mott, vice president and chief information officer at Wal-Mart Stores, Bentonville, Ark.

Store-level employees need to be informed and allowed to voice their opinions about any new automated electronic system well before a corporate-level decision is made to install it, Mott said.

"Too many times the person that we [at the executive level] see as the end user is not the person using the systems at all. If the major concern is to satisfy our customers and everybody in our organization," then end users must be made a part of the decision-making process, he said.

"We need store automation that is aimed at putting technology into the hands of the end users -- the person that's out there doing the work day in and day out," he added. Mott made his remarks at the Retail Systems 1994 conference here late last month.

What supermarket retailers can learn from Wal-Mart, Mott said, is how to launch new store automation programs more smoothly by keeping the end users involved every step of the way.

The days of corporate-level decision-makers planning and implementing new systems, alone in smoke-filled rooms, must end, he said. "That time, that process, that function, it's no more."

Similarly, the decision to implement technological applications must be based on a lot more than simply the belief that all automation is worthwhile without considering the specific needs of a given situation or business process.

"There isn't any business out there today where automation [alone] is important. We need to

look at the overall process, not just at making the function work through some use of technology. There's plenty of technology out there" that is helping drive some very bad business processes, Mott said.

As an example of how retailers can integrate a new computer process into their stores and work with end users to ensure its success, Mott described Wal-Mart's installation of a system for tracking promotional item movements.

Wal-Mart had been relying on a system that did not track movement of reduced-price merchandise on an item-specific basis. "We used to take a shotgun approach. We weren't sure where the markdowns came from. It was very broad, very labor intensive, and hard to get the details of where you should mark down." To fix the situation, Wal-Mart had three developers conduct tests on the item-tracking system, while asking various store operators and merchandisers what they thought were its faults. End users supplied data about critical manual changes made on the previous system, which would have gone undetected if they had not been asked, Mott said. "If you don't understand the process, you find out for months afterward the things you left out."

After testing the markdown program in 20 stores, Wal-Mart then turned to outside firms for internal audit and loss prevention reviews as an added precaution. "We wanted to make sure there weren't any additional exposures from shrinkage in the way we were handling the process," he said.

Within three months, Wal-Mart has rolled out a new computer-based system capable of tracking more than 4 million individual product movements per day. As a result, Wal-Mart has been able to trim $6 million in administrative costs since last August.

In contrast, Mott said that many retailers typically use store automation programs that are designed by outside consultants, implemented without store-level input, and left unchecked for potential problems.

"Too many times [developers] show up already decided what they want to do," Mott said. "Don't just take your assessment or your developer's assessment but get the people who are going to be in there day in and day out. Spend time on the front end." Professional advisers may not even be needed. "Too many times people who do a design are people who used to do that function 10 years ago," Mott said. "If they haven't been doing the job for any length of time, they are no longer an expert. In fact, their old ideas about how to change it will work against you."

If a store feels that experts are required, they should consult the advisers before and after a design is completed. "Don't just assume it's right," Mott said. "Get the end users and the experts back in."

Following his presentation, Mott told SN in the past supermarkets have had success with technology decisions made by corporate-level executives only. The past successes, along with reluctance to invest in extensive rollout programs, may deter supermarkets from consulting end users.

"Supermarkets are very cost competitive," Mott said. "They've always run on low cost and one thing, I think, that may be in the way is that past success. The willingness to change is a problem."