The next five to 10 years will see more South African chain retailers moving to real-time network solutions - technology that few retail chains currently employ, says a Johannesburg-based enterprise resource planning (ERP) network solutions company.
Unibase Solutions MD Lance Schaffer says many chain retailers face point-of-sale and supply chain management challenges, and would benefit significantly from switching to real-time networked architecture. This would allow real-time access to information, drive down costs, increase efficiency and reduce the number of administrative staff required.
Most chain retail outlets are connected via national networks, but, explains Schaffer, these are batching networks that run a four- to six-hour delay, instead of showing real-time information, such as stock levels.
Real-time national networking solutions would specifically be suitable for retailers dealing in non-fast-moving consumable goods, where expiry dates and stock levels need to be frequently monitored across many branches, he says.
This type of solution would also be suited to the medical sector, where real-time networking would be an advantage for hospitals, he maintains.
"Networking means optimum availability. In addition, procurement processes are improved when managers have a national view of their stock holding and sales movement. Stock control, including redeployment between branches, auto-replenishment and ordering, is radically simplified by real-time networking."
But, Schaffer says, many chain retailers have been 'burned` by using the wrong software, such as overseas products that have been designed for a low-cost bandwidth environment. He adds that the key challenge is finding the right software and the right team to tailor a solution for a business at the right price.
"Installing the wrong ERP system, with too many useless features, will not be cost- or bandwidth-effective. Because SA has such a high cost of bandwidth and its own business idiosyncrasies, local businesses need to realise that not only overseas vendors supply networked ERP systems; they should investigate the local market, instead of shelling out millions of rands for overseas solutions. Local software is written according to the South African business principle, and takes into account the excessive cost of bandwidth."
Schaffer points out that bandwidth is still expensive in SA, but prices are set to go down, and the trend is expected to shift to central servers.
"It`s the way of the future because of the reduced administration costs and increased information access. Companies that take advantage now will see significant competitive advantage when this becomes the norm," he argues.
"All your information and processes can be integrated into a single platform. Consolidation is immediate, and any transaction at any branch is visible nationally in real-time. Your business processes become dynamic."
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