Case study 1:
With 2,305 retail stores in 31 states, Albertsons is one of the largest retail food and drug chains in the world. Among these retail stores are 1,351 combination food-drug stores ,707 standalone Albertsons, Albertsons Express,Albortsons-Osco,Albortsons-Sav-on,Jewel,Jewel-osco,Acme,Sav—onDrugs, Osco Drugs, Max food and super saver food.
Albertsons marketing vow is to “Make life Easier for our customers”. This credo plays a large part in another of the company’s priorities, which is to make Albertsons the number one grocer in the United states. Wal-Mart currently holds that distinction with $56 million in annual revenue from its grocery departments. Albertsons stands in their place $20 million behind Wal-Mart In revenue.
Wal-Mart has been selling groceries for a mere 16 years, making it a relative newcomer in the industry compared to most of its competitors. Of course, Wal-Mart does have a vast retail experience, massive purchasing power, and leading-edge systems to apply to its grocery business to catapult it ahead of the competition. Wal-Mart Supply chain management systems are extremely quick and efficient they keep inventory down to the necessary minimums and operating cost low so that overhead tasks a much smaller chunk out of the company’s sales revenue. Wal -Marts Retail Link network pulls in point-of-sale data from its retail stores every 15 minutes, giving suppliers incredibly up-to-date information on how their products are selling. Other retailers capture sales data only once or twice each day. Albertson is working in reduce costs in its supply chain, so that it stores can offer low prices that are more competitive with Wal-Mart’s prices. Johnson has consolidated distribution centres and is using the web to coordinate shipments and to reduce billing and invoicing costs. The company also upgraded its core corporate systems, moving financial application to software from oracle and its human resources management to People Soft software. Chief Technology Officer Bob Dunst intends to overhaul 90% of the company’s application by 2007.In addition to the Oracle and PeopleSoft adoptions he has to upgrade the company’s high speed-network infrastructure. Albertsons had already added electronic data interchange capabilities, which enable better processing of transactions with suppliers. However, Albertsons does not yet have a system comparable to Wal-Mart for sharing sales data with suppliers and for automatically placing orders in reaction to sales that are taking place in the field.