Supervalu: Changing retail through technology
Date: Monday , September 03, 2007
It is a cold winter morning and the Cub Foods Supermarket in Minneapolis is preparing to open for business. The store manager is busy taking stock and finds that though he had stocked his shelves with sugar and flour the previous day, he is actually running short of these key baking ingredients. So is the case with cold creams and coffee powder, thanks to the season. Using a portable laser device, he scans the Universal Product Code (UPC) on the shelf tags identifying the items. This device tells him if there is stock of the item currently in the store stockroom, and if so, where it is located. The handheld device also gives him the price of the item and whether it will be advertised on sale in the next few weeks. If the stock is not available in the store, he can immediately place an order from the SUPERVALU Distribution Center through an enhanced order entry system which is transmitted using satellite technology. By the same evening, this advanced technology enables replenishment at adequate stock levels to meet customer demand.
This scenario provides a “sneak peak” into the supply chain process of the United States’ third largest retail grocery company, SUPERVALU. The company operates over 2,500 food and food/drug combination stores, 878 in-store pharmacies, 117 fuel centers and serves as primary distributor to an additional 2,200 independently owned stores. SUPERVALU reaches out to a very broad spectrum of customers across the United States and having the right goods available at the right places and in the right quantities presents a constant challenge. To remain a leading player in the retail grocery business, SUPERVALU understands that technological competence is a major factor in the supply chain and retail sector, which benchmarks even the time required to process a customers’ purchases at POS (point of sale) terminals.
SUPERVALU’s IT team supports the vision of the retail and supply chain giant by constantly exploring opportunities to utilize technology to enhance the shopping experience for its customers. Some of the cutting edge technology currently employed includes self-checkout terminals, inventory replenishment systems, robotics, biometrics, and much more. Imagine a technology that could reduce the time it takes a retailer to measure inventory; one that could provide accurate information about a single order as it moves from a manufacturing unit to a warehouse, then to a retail store, and then on to post-sales support. Imagine one that could finally fully automate checkout, freeing store personnel to provide increased levels of customer support. These are some of the thoughts that drive a software engineer at SUPERVALU.
With this IT roadmap, SUPERVALU has set up its first IT organization outside the U.S.—right here in Bangalore! Established as an extension of the IT group in the United States, with a supporting research and development lab to enable innovation, SUPERVALU India commenced operations on March 14, 2007. The company, with a state-of-the-art facility, is currently operational with a headcount of just over 50 people. “We are planning to expand our people strength to 200 by the end of this financial year” says Anilesh Seth, Managing Director, SUPERVALU India. “India has a large talent pool in the IT sector and our plan is to team up with the best and brightest engineers to explore the retail technology sector” adds Seth. Currently, the work in India ranges from support and maintenance to development of new applications. The India organization is also involved in the enhancement of existing applications with advanced features and functionalities. Apart from this, work is also being completed on an enhanced B2B (business-to-business) portal and other web-based applications.
The company is looking for experts with technical knowledge and business intelligence in the retail technology domain. “The work culture we offer to our employees will be entirely different,” says Seth. SUPERVALU India employees will have the stability of an organization with 137 years in existence and also the excitement of a start up. “We emphasize continuous learning and our employees are provided periodic training at all levels to update their knowledge,” explains Suneeta Ijari, Director of Human Resources. Engineers are given training in the business side of the retail world as SUPERVALU believes that the technical knowledge combined with a business perspective will produce tremendous results. It is working to partner with major institutions and universities in India to help its employees engage in higher studies in the area of their interest. Says Joan Dobias-Davis, the expatriate Human Resources Director from SUPERVALU, who is based in India as part of the team to get the India center off the ground, “We continue to be delighted with the quality of the talent in India as well as the commitment levels of our employees.”
The challenges the retail IT world offers engineers in relating their work to the company’s core business are exciting and dynamic. IT professionals must focus on the goal of providing an enhanced customer experience in the retail grocery domain and as well as the many intricate details within the complex operations of the supply chain business. For example, every retail chain needs an efficient and timely logistics system including ordering, tracking, selection, storage, and distribution. Products and goods are procured from suppliers and manufacturers world-wide and the goods must reach multiple retailers at the right time and in the right quantity; especially during festival seasons and holidays, when there is a surge in demand. Retailers are constantly in search of new technology and solutions that can help predict consumer shopping trends with regard to area, season, festival, and other categories.
Ultimately, the goal of an IT department in a retail and supply chain organization such as SUPERVALU. is to develop and improve technology to enable supermarkets to provide just-in-time products at the quality and quantity customers expect with minimal shrinkage. It is very possible that, in the future, the Cub Foods store manager will not even have to place an order to keep his supermarket well-stocked. Advanced technology and software will place the order for him by following the trend patterns as the customer purchases the product; sensors would sense the movement from the shelves and an order would be automatically placed to replenish the purchased product. Anything is possible with the emphasis SUPERVALU is placing on technological research and development in the retail and supply chain domains.