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Managing information systems: Sainsbury's

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Transcript: Managing information systems: Sainsbury's

Sandwich design

Voice-over:

When a major supermarket chain identifies a potential addition to its sandwich range, detailed information needs to be communicated to many different parties.

From its conception and design through to its sale, unique codes and shared IT systems allow information relating to every single sandwich to be communicated smoothly and used effectively.

IT director:

The sandwich, the humble sandwich, to you and me it's two slices of bread, some cheese or something on a chopping board at home - in five minutes you've made a sandwich. For a retailer it's a little bit more complicated.

If we're going to create a new sandwich the first thing you have to do is the ingredients. And it's very clear that you have to have it to a certain specification. Now, to get that to two or three suppliers and make sure that those sandwiches then end up in stores requires quite a lot of systems involvement.

Voice-over:

The retailer will create a brief for the new product, which is shared with the chosen manufacturer.

Product developer:

I have listed the concept ideas we'd like you to have a look at.

Product technologist:

When do you see the launch date for this range being

Product developer:

We're looking to launch early summer, so May.

Product development manager:

So I'll sort of pull a critical path together and then we can discuss that at later presentation dates.

Product developer:

I will be sending a copy of this brief via email to you all.

Product developer:

IT is very important in my role, for briefing suppliers and receiving and sending information. And obviously for critical path management.

Hi, morning, thanks for coming in to see us today.

Product development manager:

We identified that vegetarianism is in really large growth. So today we'd like to show you a vegetarian product for summer.

Voice-over:

The manufacturer will present ideas based on the brief. Once approved, a detailed specification needs to be drawn up.

Product developer:

It's really crunchy.

Product development manager:

Nice?

Product technologist:

Okay, well if you're happy to approve that on the table now we need to obviously start talking about critical path. It's about 12 to 13 weeks to launch date. So we need to agree dates with the product approval panel to get it signed off internally.

Product developer:

I need to take the specification with me to the product approval panels, have you started working on it?

Product technologist:

Yeah, we've started requesting all the information so that shouldn't be a problem.

Product developer:

Brilliant.

Voice-over:

Thanks to a shared system, which can be accessed online, the specification can bounce easily between the manufacturer and the retailer as details are added, amended and approved.

Process development manager:

We have several retailer- web-based systems, whereby the retailer and us - the supplier - can co-ordinate with regard to new products that have been signed off by the retailer. So a product will be signed off by the retailer, put onto the web-based system and it is then with our department, the process department. We will then take that product and work out the ingredient declaration, the nutritional, any allergens or anything that may be required specifically for that product.

Voice-over:

The retailer will scrutinise all the information provided by the manufacturer to ensure that the sandwich meets all of its requirements.

Product developer:

We're in the allergen section at the moment; they' said there's sesame, didn't they? We need to check.

Process development manager:

With regard to the technology, in particular the web-based systems, it leaves no margin for error, which is good. It means you've got a better eye for detail because you can understand what errors are going to be called up. No specification will be submitted by the web-based system until errors have been completed.

Manufacturing

Voice-over:

When a manufacturer is making 40 million sandwiches a year for a single retailer, orders need to be generated and processed efficiently. To do this, the retailer posts orders on extranet pages, which can be accessed by suppliers.

Office manager:

The extranet is there just to help us with the orders from the actual supermarkets. They place their orders directly onto this extranet and then we can just access it very easily here and print off exactly what we need to produce and dispatch out for the following day.

Voice-over:

Orders are fed through to the planning department so that they can instruct people working on the factory floor on exactly how and when the production line should run.

Planner:

At the beginning of each day we'll be given a summary of all the orders, which are placed by the different supermarkets. This information will then be placed on a database, which is used as a sort of central hub. From that information we'll then create a daily plan. So basically we let the production know what quantities and when to produce certain products.

The main systems that we use would be the database and the spreadsheets. From that we create everything that we need. We also need to make issuing sheets - they're basically recipe sheets that will go through to the fridge, so the fridge knows exactly what raw materials to release to the production.

We're also responsible for the manufacturing specifications, which lets the people in production know exactly the order, how to produce the sandwiches and it's got the technical information on that as well.

Voice-over:

The production line is set up according to the manufacturing specification. To ensure quality and efficiency, critical control points including speed checks and weight checks are in place.

Production manager:

For each product that we run on the line, we have to control the speed of products to make sure that we get the right quality. Codes help us to detect when we are tracing the product in case there is something wrong with the product, to trace it back to the supplier.

Voice-over:

For traceability, these ingredient codes are recorded on a Hazard Analysis Critical Control Path document.

Labels on packages must include accurate information about ingredients, best-buy dates and an all important barcode, which will allow the retailer to track the sandwich right through to its sale.

Dispatch manager:

The supervisor in charge of this department will sign this label check sheet and make sure we pass it over to the technical department.

Most of the customers need barcodes on their products. And every product has a sell-by date: it's either three or two, which means it has three days' shelf life or it has two days' shelf life. That's why we have this paperwork here.

Voice-over:

The sandwich is now ready to be chilled and boxed for transportation and distribution.

Factory to supermarket

Voice-over:

When the retailers' order is processed by the manufacturer, the shared system also generates barcodes for boxes and pallets. Hand-held scanners will read these barcodes so that our sandwich can be tracked all along its route from the factory to the supermarket shelf.

Dispatch manager:

We print outer label boxes for our customers. We scan the outer label boxes and then this information is connected to a PC, which will make a printout and send it to the depots of the customers that we supply.

Office manager:

Pallet labels are generated again from the system, which means that on the pallet there is information, delivery address and exactly how many boxes of what product are on that pallet.

Voice-over:

En route, the lorry driver will use a combination of GPS (a global positioning system) and mobile network technology to relay details of his journey and expected time of arrival to sorting depots and supermarkets.

Voice-over:

Within hours of their manufacture, a fleet of lorries delivers our fresh sandwiches to supermarkets across the UK. At the loading bay, barcodes on pallet labels are scanned so that deliveries are automatically logged onto a central system. Information from hand-held scanners is transmitted via wireless network to computers within the shop.

Warehouse assistant:

It's a hand scanner, which scans everything in that comes through our back door so that we know that it's in the store and it's updating our inventory all the time, which is basically what stock we've got in at what time.

The main information which is inputted is a DU which comes on the back of our wagons, which means delivery units, which gives you a grand total of how many cases are on this roll pallet at the time. You scan the barcode and just count every layer and tray at the same time.

When we start scanning it in for a wagon we get a prompt to give a temperature, which we have to do on every wagon that is involved in chilled goods. That prompts us to appoint a storage area: the back chillers.

Voice-over:

As well as knowing where to store different products, staff need to know where to display them on the shop floor. A range planner identifies the optimum sales area for each product.

Senior range planner:

The sandwich came from a cold storage unit out here through these double doors onto the shop floor and then down the aisles until it ended up at the sandwich cabinet. The sandwiches are located at the very front of the store. They are located alongside soft drinks, crisps and snacks, other products that you'd assume to actually be able to buy when you actually come into the store for a lunchtime solution.

Voice-over:

Our falafel and humus wrap is now ripe for the picking.

In the store

IT director:

When the customer comes into the store, they pick their sandwich up and they take it to the checkout and at that point they scan the barcode.

So it's a unique barcode within the sandwich and it tells us that we've sold that sandwich. And the system will tell the centre that we need to go through and re-order a new sandwich to put into the store for the next day because they've sold that one.

Voice-over:

On this occasion our customer chose to use self-checkout, scanning his own products and using a touch-screen computer. Staff supervising the area can see what is happening at each self-checkout point on their own computer screen.

Customer service assistant:

One of the things that I'm using - the screen just shows that the customer needs help and if they need to verify an item or something, or they need assistance, it's very easy to use.

Voice-over:

Throughout the day, stock checks continue with the use of hand-held scanners on the shop floor. The range of stock information accessed with the handset is useful to head office, shop staff and customers.

IT director:

Our handset is used by all of our colleagues in-store and what it does is it collects the stock information of what is on our shelves in-store. And once it's collected it, it immediately brings it back to the centre. And then in the centre they can look across the chain and decide what products to re-order for the stores.

Fresh foods manager:

Using a handset is actually more practical then having a piece of paper that you can actually lose because once you've got that information into the handset it's transferred straight to the system, which the system keeps for records.

If a customer has a query about falafel humus wraps, we can find out when it's coming in, how many we've got, its price history and any information about the product, instead of going to the warehouse and searching for it.

Voice-over:

As the day draws to a close, some fresh produce may not have been sold. If it's still within its shelf life the price will be marked down. New price information has to be created without delay.

General assistant:

The printer is what we use to print off the reductions labels so the customers can see clearly what's been reduced and what hasn't. You must always, always put the label on the back to cover the barcode.

Voice-over:

Inevitably a few sandwiches will remain unsold. Their fate needs to be recorded by the system so that wastage can be calculated.

IT director:

We need to tell the system that we've wasted those sandwiches because otherwise the system won't know what's happened to them. So we use our handset to go through and waste all those sandwiches.

If they're within date and the date is still valid we will normally give them to charity. But if they're out of date, because of the health and safety we have to put them in the bin unfortunately.

Using the data

Voice-over:

Our sandwich might have reached the end of its life cycle, but the information associated with its sale has only just begun its journey through the retailer's IT systems.

IT director:

It's very important that our systems are integrated and that we have a full view of what we do in the business, because we have over 500 stores and each store sells about 25,000 lines. And it's very important to us that we can see end to end what's going on with every single one of our products in every single one of our stores. So it's always there for our customer when they need it.

Voice-over:

Thanks to barcodes on products, every single sale becomes a valuable piece of data. This is stored in a data warehouse to be used in many different ways by the retailer.

Trading and marketing lead:

We store all the data relating to every product that we sell regarding the sale of those items. So how much it costs, how much it retails for, what promotions it's on, how many of those units we sell by day, by store.

All of that data is basically filed within the warehouse with a time and date stamp. Data comes out from the system in a series of sort of flash reports that we send out to our retail and buying users. It comes out in the form of spreadsheets that the user can then open up and manipulate as they see fit.

The store managers in the shops are using these flash reports on a daily basis to see how well their stores are doing, basically on a week-for-week basis and a year-for-year basis; comparing yesterday's sales with the comparable sales for last year.

Supermarket supervisor:

Wastage: the target was 628 and we did 614. So we're just under on that.

Trading and marketing lead:

They also use it to monitor their wastage, that is how many items they have to dispose of in store, or how many items they have to reduce to sell to customers.

It's important to understand this data from our point of view because it helps us understand what customers are buying. It also helps us understand the profitability of these lines, where they're actually selling. So for example, if something is selling well in a certain set of stores, but not well in another set of stores, we can make decisions based on where we actually put that product in the future.

IT director:

We have another system that says that if I've got that many stores with that many sandwiches on that many shelves, then I need to buy this many sandwiches every day. And that's called our forecasting system.

Analyst programmer:

We have three years-worth of sales per item per store at weekly level. We can base a lot of our future demand forecast on actual history of those items and how they've sold in the past. We can base seasonal forecasting off an average of those three seasons.

Female:

Retail is great because it's fast-moving and everything is very immediate and if IT can support that then it's fantastic. It really is good fun and I've never had a dull day in the 15 years I've been in it.

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