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Today's retailers need responsive information systems to maintain their competitive edge. For some they will be sophisicated, using telecommunication satellites. For others, a simple system to manage inventory will suffice. Knowledge is power in dealing with competitors, vendors and customers. The right information system delivers that knowledge to the fight place, at the fight time.
The success formula in retailing has a one day life cycle. Unless the retailer is COnstantly improving his business, he is failing behind the competition. The industry, analysts say that 40% of all retailers who existed at the start of this decade won't be around in year 2,000. Most of the successful trailers have information systems that provide timely, accurate, and concise data. And most will go through a major computer system conversion, both hardware and software, before the end of the decade.
The following case illustrate two approaches to automating a retail business. The first was a COnversion from an exhisting system, the second a start up. The first decided on a package, the second custom developed. The first has a minicomputer host, the second a PC network.
Company ABC is a drug/variety store chain with pharmacy being the main department. They automated the store pharmacy operation in 1984 and began a merchandising and warehouse conversion project in 1985. Their old system was custom developed in the 1970's, but had become antiquated and was overwhelmed by transaction volume. PC applications were introduced into the corporate office in 1984 and limited to accounting and reporting;.
More than half of the store's inventory receipts are ordered through the central warehouse via Telxon hand-held units. the company needed a merchandising system that was easy to use, hardline (not apparal) oriented, capacity for 50,000 SKU's and 50 stores, developed for retailers, not wholesaiers, and relatively inexpensive.
It was believed that custom developing from scratch would cost too much time and money. The Company looked at a drug wholesaler package and a softline retail package before deciding on a package written for hardlines retailing. This software ran on an IBM S/38 (the AS-400 wasn't available yet), which dictated the hardware decision.
Although the software fit was high, merchandising management required extensive modificaations. Each retailer has many unique transactions and Company ABC was no exception. Since the IS staff at Company ABC was sparse, outside consultants were used for project management and programming.
During the merchandise system project, payroll was converted to the S/38 (they do all their payroll in house). Afterwards, the general ledger and accounts …