Piggybacking On ATMBy Elizabeth Bennett | Posted 2006-10-02 Print
Retailers including the $3.4 billion supermarket chain are using consolidated, faster data networks to make key business decisions—such as how much ribeye to put out on a Wednesday.
Piggybacking On ATM
Happenstance brought Hannaford to ATM: In 1996, Verizon had installed a statewide ATM network in Maine, linking all government agencies and schools at a speed of 10 megabits per second.
"I just asked Verizon if we could ride this network but attach at 1.5 megabits instead," Homa recalls. "They agreed. Otherwise, we never would have tried ATM." Homa says desperation for a better network inspired him with the idea to piggyback on the project.
Hannaford's growth, in terms of store locations and sales, has doubled since the mid-1990s, some of which Homa attributes to the faster, more reliable network. "The network infrastructure has dramatically changed the business," he says.
The streamlined technology made it possible for Hannaford to eliminate 1,000 servers across its then 100 locations, with one or two remaining in each store. The server purge became possible when all store data was consolidated on the single IBM p5 mainframe at headquarters. Stores can access the data from IBM DB2 databases that run MicroStrategy's decision support software, which processes queries from the Maine mainframe.
Homa says the network costs less to support now: Despite 50% company growth in the last 10 years, the technology staff has shrunk by 10% to 135.
It is also easier to maintain with remote management tools that can diagnose problems and fix antennae, routers, switches, servers and printers. Automated alerts notify support staff when there is an irregularity in the system. And if Hannaford can't fix the problem, it sends the alert electronically to Verizon or Fujitsu, the company's hardware service provider.
The network seldom goes down, Homa says: "We don't even measure uptime anymore. It's just always up."
Another benefit, he adds, is that Hannaford knows it's always working with current and accurate data. Managers use handheld wireless devices in each store that run applications processed on the central mainframe to look up inventory, order more products, adjust prices and produce the coupon stickers that get scanned at the register. And all of that activity is transmitted back to headquarters.
"We know if we're cutting too much ribeye or too little lean ground beef on a Tuesday and can plan better for Wednesday," Homa says, referring to the butcher's capacity to adjust the day's cuts based on querying an inventory application behind the meat counter.
The company's category manager in charge of meat can look at companywide buying trends on the IBM mainframe at headquarters. If customers are buying fewer pork loins in November than they were in October, Hannaford can adjust the number it produces across the company.
And the network technology has even made a difference at the cash register—literally. Linux-based cash registers, which connect to the central mainframe, have cut four to five seconds off the time it takes to verify credit card information; 80% of that speed increase can be attributed to the network, Homa says.
"Do you know how long four to five seconds is for a customer?" he asks. "It's an eternity."
At A Glance: Hannaford Bros.
Headquarters: 145 Pleasant Hill Rd., Scarborough, ME 04074
Phone: (207) 883-2911
Business: Operator of 158 supermarkets and combined supermarket/pharmacies in New England and New York.
Chief Information Officer: Bill Homa
Financials In 2005: Sales of $3.4 billion (2006 Chain Store Guide estimate).
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