Streamlining the Supermarket Supply Chain

Shaw's taps i2 to control inventory, ADX to link to SME suppliers

Tempe, AZ  February 7, 2002  With profit margins in the retail grocery industry hovering just above razor thin, supermarkets must make quick, informed decisions about inventory control to ensure lower costs.

So it's not surprising that Shaw's Supermarkets is looking for ways to improve its bottom line by streamlining its supply chain.

Case in point: Recently the New England-based supermarket chain went looking for a supply chain planning and optimization tool to improve the efficiency of its operations.

"In the past, we didn't have the data or tools we needed to really understand how to align our network," said Mike Powell, senior vice president for supply chain at Shaw's. "We knew we had to be more precise to ensure that our organization was operating at peak efficiency."

Shaw's elected to test-drive i2's Supply Chain Strategist tool and saw good enough results from a pilot to proceed with a full implementation. "After completing a pilot program using the i2 solution, we found that we could be more efficient in aligning stores and distribution centers," Powell said. i2 said its solutions are designed specifically to help tighten up the supply chain to create delivery-on-demand networks.

Meanwhile, Shaw's is also set to use supply chain connectivity services from Advanced Data Exchange (ADX) to link to its small and midsize suppliers.

Shaw's will use ADX outsourced services to connect non-electronic data interchange (EDI)-enabled suppliers to the ADX Network, allowing suppliers to exchange EDI transactions without the costs or complexity of purchasing and installing traditional EDI systems. Shaw's will exchange such business documents as purchase orders and invoices with its suppliers electronically via the ADX Network.

The ADX solution allows Shaw's to leverage its existing EDI systems to extend electronic trading partner relationships to its smallest suppliers, which ADX says should reduce errors, achieve greater efficiency, cut costs and increase profitability for the supermarket chain.

"Shaw's Supermarkets has been looking for a compelling solution to electronically connect to our midsize and small suppliers," said Karen Leggett, Shaw's corporate data control manager. "The ADX service provides obvious value and efficiencies not only to Shaw's, but also to our suppliers for a minimal investment."

Shaw's, a wholly owned subsidiary of England's J Sainsbury, manages 185 Shaw's and Star Market store locations and two distribution centers throughout the six New England states, tallying total sales of nearly $4.0 billion in its most recent fiscal year.