Merchandise Management has data under control – from supplier to cash register

  Each year, the European Trade Institute EHI researches just before the Euro CIS how much retail invests in IT. For years, Cologne reports that retail invests a lot of money in inventory management and its cash register landscape. Today, both areas can barely be separated any longer, since the cash register has been an important data provider for years. The check-out counter is the last stop on the product’s way to the consumer.

Merchandise Management Systems – these are complex software-projects that have to fulfill many functions. Whether they are accepted by the user depends on whether they are user-friendly, how well they can be run and whether they make everyday work easier. This starts with the input of data and goes all the way to its processing. What’s entered as goods are received, stored in the warehouse, placed on the shelves and ultimately is being sold, has to be shown by merchandise management. To do this, skids, crates and articles get scanned numerous times. This means: The scanner data needs to be integrated into the merchandise management system just as easily as the master data, which is entered by the suppliers, all of which in turn requires an appropriate interface. The cash register has to fit into the system just as well as the office printer – only then does the data on the sales receipt and the invoice match and the sales tax correctly reported out.

The value of a cash register- and merchandise management system is reflected during an external audit. The tax auditors have an eye for accounting errors, which can prove costly for the retailer. According to information by software providers, smaller specialty retailers in particular occasionally shy away from such a purchase. They would like to know how much merchandise “gets lost“, but the tax authorities are not supposed to have insight into everything either.

Marry in haste, repent at leisure

Oracle and SAP are the two big companies on the market for merchandise management systems (WWS in German), and also offer retail editions. For retailers there are also several niche suppliers. All of them offer standard solutions, which can be adapted at several points to the individual user requirements. Combined with Business Intelligence, programmers are trying to merge the multitude of accrued data for the user in a meaningful way. Colorful bars, diagrams or rulers show at a glance, whether data is in the normal range. An alarm is triggered, when something gets out of control. And still, some retailers do not find what they are looking for on the market. Like the German retailer Rewe, they prefer to work with their own programs, which are combined with components from standard solutions.

Software suppliers are offering complete full service packages. By choosing one of these, you set the company course for a long time, since inventory systems reach deep into internal processes, and can’t be easily exchanged afterward. During the selection process, neutral consultants offer their services. They are not tied to any specific product, but when the companies are small, their continuity over the years is not as certain as with some of the larger software companies. Still, the chain store bakery Back-Factory chose a medium sized entrepreneur as its inventory software supplier: The large contract went to the ERP supplier Godesys from Mainz in the Spring of 2009. Back-Factory is a franchise corporation with about 120 stores all over Germany.

Real-time data is increasingly important

A merchandise management system not only needs to display information about the speciality retailer or the stores, but also the activities in the Online shops. Real-time data is still a particular challenge in this area, since the Internet shopper would like to know immediately, when an article is available. The Webshop’s data therefore needs to be synchronized with the merchandise management system. So far, much still needs to be done manually. WWS suppliers are currently working on integrated solutions though.

The issue: Juggling it all

Retail is on the go. Mergers and acquisitions are making headlines. When the Discounter chain store Netto acquired its competitor Plus last year, it wasn’t just the branches that needed to be “reflagged” as they say in this business. The product line was also unified – and so was merchandise management behind the scenes.

More challenging is a unified IT landscape for trade associations and cooperatives. They have to convince members of the advantages first. It was a tour de force last year, when Electronic Partner introduced the merchandise management system ”SAP Retail“ simultaneously in five countries. Edeka did not have this much success. Its independent merchants often develop a certain kind of stubbornness. Example Buchbauer: This Edeka merchant, which operates at least 31 stores in the Lower Bavaria region around Passau, chose an merchandise management system by Maxess and thus replaced ”Ebus“ which is used by Edeka in the Southern Bavaria region. Buchbauer believes that it can operate its locations better with Maxess. This presents a special challenge in supplying the Buchbauer headquarters with master data on articles, suppliers and sales promotions through the Edeka headquarter in Southern Bavaria, which is scheduled to be maintained as such with Ebus.
Independent retailers, which are outfitted by their headquarters with the unified WWS software, turn into a completely transparent vendor – from sales figures all the way to pricing. On the other hand, automatic orders are thus simplified and you don’t have to do your own system administration. Family run retail shops are finding it all even more difficult. They are not IT experts and thus need to obtain expert knowledge externally.

  Mobile Terminals report product shortages

Merchandise management no longer merely is dealt with in the back office – also not just in the branch office or the headquarters either. In January, the mobile terminal manufacturer Höft & Wessel announced a major order from the Discount chain store Netto for more than 1000 mobile data acquisition devices called ”Skeye Allegro“. The hand-held computers are outfitted with WLAN-access to the Aldata inventory management system. Last year, Kaiser's equipped its 700 branches with 1500 MDE-devises by Nordic ID. In doing so, it was essential that the instruments of the type “PL3000“ were able to wirelessly communicate with the WWS.

With these terminals, sales staff “on the floor“ directly record inventory and are able to reorder immediately. It then depends on the logistics supply chain, whether there will be product shortages. Surveys show: Customers are demanding and want to find their desired product in the store. If its not there, they won’t wait, but most likely buy it somewhere else. This is why retail is looking for projections, which warn against impending product shortages.

The merchandise management specialist Aldata is currently creating the software “Apollo“, which is a new business unit with a new top sales manager. “Apollo“ is intended to optimize the shelf utilization with its planograms and projections. Competitor Superdata supplements its inventory management software “Dewas“ with the modul “Umsatz-Checker“ (=sales volume checker) to prevent products from being out-of-stock. The program compares projection and sales figures and shows impending shortages

WWS at the EuroCIS

At the EuroCIS all software companies, which are important for retail, will showcase themselves – larger as well as smaller specialists alike. Inventory management will also be a topic at many other trade fair stands, since data is also created at electronic scales, bottle deposit machines or cash registers. Electronic price tags or advertising displays – Digital Signage – access merchandise data.


René Schellbach
eurocis.com

05/03/2010

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