Retailer To Suppliers: Track Inventory, Restock Shelves - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

Retailer To Suppliers: Track Inventory, Restock Shelves

Canadian home-improvement store extends inventory-management software to cut labor

Rona Inc. is turning to IT in its battle to remain No. 1 against Home Depot Inc. in the Canadian home-improvement market.

The Montreal retailer last week disclosed plans to make suppliers more responsible for keeping its store shelves stocked. Starting in September, Rona's 15 major suppliers, which account for as much as 30% of its inventory, will access its inventory-management system through the Internet and determine when to ship more products based on parameters Rona sets. The software will give each supplier an ID and password to access information pertaining only to its products.

Rona, a privately held company, has relied on software from E3 Corp. for five years to manage inventory levels in its warehouse-size stores and Montreal distribution center, which supplies Rona's smaller outlets. Inventory data is fed daily to Rona's 19 buyers, who access E3's inventory-management software from their Windows desktops.

Each warehouse store carries as many as 45,000 products; the distribution center holds 35,000 items. Without the software, says Pierre Pelletier, Rona's VP of distribution and logistics, "no one could handle this many SKUs [stock-keeping units] for each store and the distribution center." The software's preset parameters, such as acceptable inventory levels based on sales projections and how fast a product moves, notify buyers when to call suppliers for more products.

By giving suppliers access to that information, Rona expects to save labor costs by having fewer buyers. "The buyers are still going to be looking over their shoulders, but it's mainly the suppliers that will be doing the work," Pelletier says. Suppliers also can gather data on promotions. A supplier "is going to be able to do a much better job than we do because he knows his own production [requirements]," Pelletier says.

Rona is following in the footsteps of its archrival Home Depot, an early adopter of supplier-collaboration technology that trails Rona in Canadian market share by 10% to 13%. E3 is charging Rona and each of its suppliers $50,000 for deployment, training, and the software license, and it's charging the suppliers $12,000 in each subsequent year for licenses only.

Pelletier says suppliers should see a payback on the initial cost in three to four months.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Commentary
Enterprise Guide to Edge Computing
Cathleen Gagne, Managing Editor, InformationWeek,  10/15/2019
News
Rethinking IT: Tech Investments that Drive Business Growth
Jessica Davis, Senior Editor, Enterprise Apps,  10/3/2019
Slideshows
IT Careers: 12 Job Skills in Demand for 2020
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/1/2019
Register for InformationWeek Newsletters
Video
Current Issue
Getting Started With Emerging Technologies
Looking to help your enterprise IT team ease the stress of putting new/emerging technologies such as AI, machine learning and IoT to work for their organizations? There are a few ways to get off on the right foot. In this report we share some expert advice on how to approach some of these seemingly daunting tech challenges.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll