Page 23 - Sphere No.10 (Dec 2003)

S PHERE
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I magine having to fill the shelves of more than 3,200 retail
stores in 15 different countries from a selection of more than
170,000 products.
Before the goods can be delivered they must first be sourced
from all over the world.And shelves must constantly be restocked
after products have been sold.What’s more, the tastes and buying
habits of customers differ from store to store and vary widely
according to the season. Finally, records of each transaction must
be fed back into the system to keep stock flowing smoothly.
It’s enough to boggle the sharpest of minds, yet it is a feat that
is pulled off on a daily basis by A.S.Watson (ASW).
Sourcing, distribution, logistics, computer systems — these are
the back-office operations that can make or break any retail busi-
ness. ASW has been able to improve on all these functions as it
grows in size and scope, resulting in better service and product
variety at lower prices.
A worldwide sourcing operation based in Hong Kong directs the
buying activities of the different divisions around the world, with
products from the Americas, Europe, China and Australasia.
“Sourcing is the lifeblood of the business,” says Group Managing
Director Ian Wade. “Without effective buying you don’t exist.You
need value, variety and point of difference with your competitors.”
Goods are shipped to distribution centres throughout Asia and
Europe, with sophisticated computer systems keeping track of
product flow. Logistics and IT are integrated so that crucial com-
mercial information is easily accessible at the click of a mouse.
“Logistics is vital within a health & beauty chain,” says Gert
Vos, Director of International Systems. “Just imagine that the
products do not reach the stores, or arrive late. Just imagine
that the costs of bringing the products to the stores are not the
lowest possible.
“It is impossible to keep good track of the product flow without
sophisticated computer systems,” Mr Vos adds. “The commercial
people want information on the sales per product, the margin per
product and the effects of price promotions, etc. In a modern retail
organisation this type of information is crucial. It is our task to deliv-
er that information in a way that people want. Most information is
generated by the products coming in and out of the distribution
centre, flow to the stores and from the stores to the consumer. So
logistics and IT cannot be separated, but are fully integrated.”
Since the Kruidvat acquisition, more containers from Asia are
reaching European shores, with pressure on centres increasing due
to rising sales across all business units.
ASW is able to use experience gained in more mature
economies and apply it to the quickly adapting Central European
markets where it has opened three ultra-modern distribution cen-
tres in the past two years, most recently in the Polish city of Lodz.
Impressive expansion targets in the coming years mean the
logistics and IT departments will have to anticipate change at every
turn, and extensions and improvements are a way of life.
ASW is rolling out a sophisticated computing
system across its European operations, starting in
the UK.The newWindows XP-based point-of-sale
platform, called StoreLine, isWeb-enabled, allowing
for inventory tracking across all stores as well as
corporate training and operation, further enhanc-
ing operating efficiency and customer service.
Despite ASW’s global reach, it retains
a local, pesonalised approach. Products and
packaging change from country to country
to suit local needs and tastes. In the
Philippines, for example, goods are mar-
keted in smaller packages than in other
countries, reflecting local shopping
habits. Similarly, sun protection prod-
ucts may be relevant in certain stores
in the summer season, whileVitamin
C might be a big mover during the
“influenza season”.
Then, of course, there is
Christmas, Easter, Chinese
New Year, “back to school”
and even “Sinterklaas” in the
Netherlands — all requiring sea-
son-specific inventories — not to
mention innovative and sustained
promotional campaigns for a vari-
ety of products, ranging from toys
to TVs.
With 170,000 product lines,
the range and volumes indeed
seem endless, but the over-
riding impression for cus-
tomers is that the prod-
uct they choose is one
in a million.
SHOPPING FOR THE SHOPPERS