Shoprite Checkers, South Africa`s largest retail chain, has extended its installation of the EXceed warehouse management system to include its Johannesburg, Pretoria and Durban operations.
Shoprite Checkers has been running the software at its Cape Town facility since 1996. This facility, at 50 000 m2 in extent and 15m high, is the country`s largest distribution centre and holds 15 000 line items. The other warehouses average 20 000 m2 with 5 000 line items. In total the distribution centres employ in more than 1 000 people.
These centres service 500 stores, including Shoprite Checkers, Hyperama, OK Bazaars franchisers and Sentra.
Photios Tzellios, supply chain manager for Shoprite Checkers, says the exercise first started with an international search to identify and benchmark suitable warehouse management systems that would locate, replenish and assist in achieving operational efficiencies. Their search took them to Dallas Technologies (which subsequently became EXE Technologies). Since installing EXceed, Shoprite Checkers has moved to a near-paperless process in its distribution centres and has been able to implement best practices, boost productivity, reduce shrinkage and wastage and ensure Year 2000 compliance. In addition, EXceed facilitated Shoprite`s ability to accommodate substantial growth in the business, and to allow for the integration of OK Bazaars after it was acquired in 1997.
"We can definitely say that EXceed has assisted in reducing our operating costs," says Tzellios.
Competitive edge
Tzellios maintains the software has given Shoprite Checkers a competitive edge in the retail industry. "We handle and fulfil promotions better- it is a matter of bringing in product and getting it to each store in the right quantities at the right time."
Shoprite Checkers adheres to an open system philosophy and has installed the software on an IBM Risc System 6000, driving 60 terminals in Cape Town. The other distribution centres are to get their own servers, in line with the group`s approach of distributed computing where appropriate.
EXceed is integrated into Shoprite Checkers` other systems. "Previously we developed all our systems in-house, so it took a considerable effort to change this mindset and move toward an off-the-shelf package.
"Coming from an environment where our staff were not computer literate made the transition to EXceed challenging, while at the same time introducing our staff to a new skill set. The process of skills transfer has been a major win for us" says Tzellios.
A key feature of EXceed is the integrated RF (radio frequency) module which not only enhances the response times at the distribution centres, but has also contributed to a reduction in equipment usage. Competitive packages do not have an integrated RF module. "Each pallet we store has a unique ID, which we scan, along with its location. This improves accuracy and allows immediate availability through realtime updating.
"In a facility as large as this you don`t always know where the people are, and EXceed assists in terms of managing people and telling us what`s been done."
Asset management
The system also has an asset management module that allows Shoprite Checkers to manage equipment such as pallets and roll-cages issued to stores. EXceed also monitors product by the sell-by-date requirement.
EXE helped Shoprite Checkers to become the first retailer in South Africa, and EXE`s first customer worldwide, to implement a system that allows the simultaneous release of branch orders (via a pull methodology) together with the allocation of stock (via a push approach). In addition, cross docking is also available. This feature allows one to bring in products from suppliers in a consolidated format and then to route them directly to stores without having to place them into storage.
Of great importance, adds Tzellios, is the fact that Shoprite Checkers kept its implementation as close as possible to the standard version of EXceed. "We installed EXceed in its `vanilla` format," says Tzellios. "However, like all customers, we at first thought that our operation was unique and we requested customisation. This turned out to be unnecessary. Because EXceed is parameter-driven, we enjoy the benefits of flexibility without having to request modifications."
EXE has been observing best practices globally, adds Tzellios, "and we learn from them in terms of running more efficient distribution centres".
Shoprite Checkers has also bought the market`s leading replenishment package, E3, which is compatible with EXceed and allows the group to improve its management of inventory.
Tzellios believes Shoprite Checkers is leading the other retail chains and will continue to lead. "For us it has been a substantial change, and today EXceed is a key component of our supply chain initiative. With our newly acquired skill set, we look forward to contributing towards the implementation of these mission critical systems in the South African market. Systems such as EXceed lead the way in changing the way people think about the dynamics of supply."
Tzellios, who has championed the acquisition and implementation of EXceed, says he enjoyed strong buy-in from management.
In the light of successes gained from the implementation of EXceed, Shoprite Checkers is now considering a roll out to the furniture and perishables divisions within its business.
EXE Technologies is represented in South Africa by Armada SSA. "Shoprite Checkers, as an early adopter of EXceed, has a head start on its competitors," says Alan Fuchs, EXceed product manager. "The productivity and efficiency gains within Shoprite Checkers have been phenomenal."
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