How One Retailer Unchained its Stovepiped Systems

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September 22, 2007

How One Retailer Unchained its Stovepiped Systems

Since its current inception a few years back, SOA has been mainly about delivering integration and agility within the corporate firewalls. But there's a vast frontier -- business-to-business interactions -- that some SOA implementations have only begin to tap.

In this new article in Supply Chain Executive, Bruce Williams, general manager and vice president of BPM solutions at webMethods, talks about one retailer's initiative to maximize its supply chain, employing new SOA and BPM strategies.

First, as anyone in retail and consumer goods manufacturing can attest, the age of overstock is long over. As Williams notes, "companies simply can no longer afford to invest in huge physical warehouses and carry massive amounts of stock in anticipation of customer demand. Neither can they wait days or weeks for data to be loaded into data warehouses in order to create demand forecasts that may be egregiously out of phase with customer activity by the time those analyses are produced. Market forces are requiring businesses create ever-tighter connections between product delivery and customer needs and wants, and take the waste and latency out of the processes by which they fulfill those needs."

Such was the challenge for Albert Heijn (AH), a big retailer based in the Netherlands, which lacked visibility into its supply chain, and was forced to rely on fixed replenishment schedules that were based on local demand forecasts.
The company needed to minimize the amount of inventory in warehouses and across its 170 stores.

The solution was to change from a once-daily to real-time monitoring replenishment cycles. This required "replacing existing integration points with an infrastructure capable of fully connecting all 720 stores to corporate systems and suppliers," Williams said.

The solution AH pursued included a SOA-based approach to bridge its previously separated technology environments. AH's new platform consists of webMethods' Integration Server (IS) on each store's back-office server, employing a JDBC Adapter to communicate with the server's database for processing outbound and inbound messages. Each store's IS connects to a central broker at AH's headquarters, which in turn connects to back-office applications.

AH rolled out the new system to the first store in November 2005, a process that was completed for all 720 stores by May 2007. AH can now bridge previously separated application-to-application and B2B environments within a single infrastructure that also controls the supply chain. Information on each retail sale streams all the way back to suppliers. All point-of-sale data is automatically aggregated with sales data from across all 720 stores and delivered to a centralized replenishment application. Decision makers now get replenished data every half hour to help with supply chain decisions.

To build the case within the business, AH created cross-functional teams to bring together business and IT people, and focus the strategy on the business needs and projected benefits of the project.

AH is now implementing webMethods Business Activity Monitoring technology to provide end-to-end monitoring of key performance indicators (KPIs), Williams adds. This new capability "will enable the retailer to continuously improve the replenishment process, monitor technical connectivity between stores and headquarters and gain additional visibility into timeframes for transactions in replenishment processes."

Posted by joemckendrick in Business Process Management | Digg This | Add to del.icio.us