Oracle Retail helps Woolworths to create unified stock and financial management capability

This article is brought to you by Retail Technology Review: Oracle Retail helps Woolworths to create unified stock and financial management capability.

Founded in Cape Town in 1931, Woolworths is a household name in South Africa and is today recognised as South Africas leading retail brand. Woolworths sells a wide range of products including food, clothing, beauty, homeware and more under its own label in over 380 stores nationwide as well as across Africa and the Middle East.

As part of its ongoing commitment to core values of quality, style, value, service, innovation, integrity and energy, Woolworths has been working on a number of initiatives designed to improve operational capabilities and sustain long-term performance. To help achieve these goals, Woolworths turned to Oracle to optimise its retail processes and improve data integrity in order to drive better decision-making across the business.

Since project Operation Optimise (O2) began, Oracle Retail applications have delivered a wealth of improvements to the business. By standardising and centralising its merchandising, planning and supply chain operations and integrating retail processes more efficiently with back-office operations, Woolworths has significantly improved stock visibility and end-to-end financial management.

Data integrity  

Following completion of the last of 14 projects under the O2 banner in October 2007, Woolworths has realised considerable improvements across many areas of the business.

John Hunt, CIO, Woolworths explains: Our technology investments have delivered a unified view of stock that has helped Woolworths execute more effectively on a broad range of merchandising and financial activities. I cannot stress how important data integrity is to our strategy. We know that once we had a centralised source of accurate reliable data, it would be possible to drive efficiencies across so many areas of our business.

The implementation of the scalable, fully integrated Oracle Retail Merchandising System was integral to the project, enabling Woolworths to coordinate its merchandise operations across its lines of business. Having successfully integrated the ability to systematically centralise its disparate food, clothing and homeware supply chains to create one common supply chain for the business (it has not physically been implemented as yet), the system has helped drive better insights and improved tracking of stock through the supply chain.

Improved stock and financial control

The guaranteed and measured transaction processing and updating from POS and in-store stock management systems has led to an accurate view of stock, which is held centrally only. The accurate view of stock has enabled the order management systems to achieve a higher level of re-order accuracy.  Furthermore, the tight integration with Oracle Retail Invoice Matching has ensured that payments are directly linked to actual merchandise receipts against valid purchase orders resulting in very few discrepancies between supplier order fulfilment and payments associated to them. From a financial management perspective, we have seen huge improvements in the management of activities associated with our suppliers and franchises procurement, purchase order, receipts, invoice matching processes and settlements, said Hunt.

Enhanced forecast capabilities

Oracle Retail Demand Forecasting has helped Woolworths to improve its food forecasting, allocation and replenishment processes providing a more accurate picture of consumer demand and supporting the allocation of stock accordingly.

With more accurate forecasting capabilities, we are focused on increasing customer satisfaction. We are working more closely with our suppliers to order the right levels of stock to meet demand in stores, thus improving availability, reducing wastage, and improving profitability, Hunt added.

Delivering an integrated system

When it launched O2 in February 2003, Woolworths was supporting a set of fragmented and cumbersome merchandising systems for its clothing, home and food lines.

Hunt explains: It was becoming increasingly difficult to support our ageing technology, both in terms of the skills required to manage these as well as the multiple versions of data provided by these disparate systems. The O2 project helped us to identify and implement efficiencies and best practice into the business, providing the capabilities to become more agile in our decision-making process. An integrated view of the business, incorporating dedicated forecasting, allocation and replenishment solutions and a common supply chain process, has delivered this agility and promoted more effective supplier and franchise financial management.

Why Oracle?

The O2 programme was not purely designed to resolve key issues around availability, wastage and supplier discrepancies. Our leadership team saw this as an opportunity to enhance business performance and position ourselves effectively for future growth and initiatives, explained Hunt.

With the core values of quality, integrity, value and innovation in mind, Woolworths identified Oracle Retail as the best solution for its business. Hunt continued: Oracle Retails mature foundation, its best-of-breed approach to retail and its integration capabilities was key to our decision. Oracle Retail applications are designed specifically for retail. They are proven to deliver results across many retail organisations around the globe. We wanted a platform upon which our business would grow. Furthermore, we wanted a partner with whom we could continue to grow and innovate going forward, across both the application and technical environment.

Implementation process

Oracle and implementation partner, Accenture, were committed to working with us to resolve any issues that arose during our phased implementation process, said Hunt. Whilst we considerably adapted the Oracle Retail Merchandising System for our requirements, we chose a relatively vanilla implementation of Oracle Retail Demand Forecasting because of the best practices incorporated in the application.

The Oracle Retail deployment led to the re-engineering of several business processes, particularly around stock management in the supply chain and financial management of the merchandise.

Following a detailed design phase which identified the best fit of Oracle Retail applications to existing business processes and technology environment, the O2 project commenced with the clothing replenishment project in February 2003. It completed the final implementation of Oracle Retail Merchandising System into the food business in October 2007, having managed 14 projects in that timeframe as part of the O2 programme.

The implementation of Oracle Retail and its associated applications has provided the systems platform for real value, integrity, growth and flexibility for the years to come, summarised Hunt.

Woolworths
Cape Town, South Africa
www.woolworths.co.za

Industry:
Retail
Annual Revenue:
US$2.3 Billion
Employees:
17,000

Oracle Products & Services:
Oracle Retail Merchandising System
Oracle Retail Demand Forecasting
Oracle Retail Invoice Matching
Oracle Retail Price Management
Oracle Retail Allocation
Oracle PeopleSoft

Partner:
Accenture
www.accenture.com

Key Benefits:
         Integrated view of stock (unit and financial)
         Data integrity and data visibility across the supply chain
         Enhanced food forecasting ability and thus improved availability and reduced waste
         Improved stock allocation and supplier management
         Enhanced clothing replenishment capabilities
         Enhanced and common information availability to drive decision making
         One common system for supply chain across clothing, homeware, beauty and food operations
         Huge improvements in financial management of suppliers and franchisees
         Replacement of ageing and non-supported systems