Loblaw draws on the latest data technology to address inventory issues
Like most grocers, Loblaw wants to get rid of excess inventory while increasing customer service levels. And it’s deploying heavy duty technology to make that happen.
During a session titled Understanding Inventory: Why is it important? at the Teradata Partners user group meeting in Anaheim, Calif., a Loblaw IT executive explained why and how the company is using data to simultaneously reduce out-of-stocks and inventory levels.
Brian Rampersad, director of integration & business intelligence at Loblaw, referenced the retailer’s first Q1 2015 report for one of the key challenges facing the retailer, stating it is the “inability of the company to manage inventory to minimize the impact of obsolete inventory.”
The opportunity, he said, is to continue driving net efficiencies across the food retail business by achieving reductions in supply chain. Further, he added that Loblaw needed to catch up with leading retail supply chains that routinely achieve 20% higher profitability, 50% higher net asset returns and 15% lower supply chain management costs.
Loblaw took a hybrid approach, driven by strategic business needs and grounded in tactical data analysis by deploying Teradata’s Data Integration Roadmap and DataLab technologies last year.
Rampersad said the Teradata solutions provides Loblaw’s merchandisers and marketers with a better understanding of the questions that can be asked and answered, as well as the ability to store, interrogate, and unlock value in large volumes of data. The retailer also views the system as a means to unlock the hidden potential within data, accelerate the analytical capabilities of subject areas already within the company’s data warehouse and address business case challenges like the reliance of IT for the integration of any new data and a lack of enterprise business visibility and agility.
Loblaw implemented a retail logical data model that helps it ask questions like “What products and categories are driving the business?” and “How do I unlock the relevant data so the business users can move more rapidly and more intelligently?” The responses come through an integrated set of key performance indicators that can each improve retail business capabilities like demand forecast accuracy, on shelf availability, replenishment optimization, demand planning, vendor collaboration, inventory allocation and more. To start Loblaw selected six questions on markdowns, promotion response, sell through levels and predicting inventory levels and now are expanding the range leverage the power of the data and give users the ability to gain new customer and product movement insights.
The bottom line, according to Rampersad, is that Loblaw is now able to “unlock the relevant data in its system so business users can make more rapid, timely and intelligent decisions,” adding that the data technology addressing inventory so directly that Loblaw is driving net efficiencies across the food retail business and achieving significant reductions in supply chain costs.