ZIFFPAGE TITLEPicking and Choosing

By David F. Carr  |  Posted 2004-10-01 Print this article Print

Paramount Cards has hidden claws. Mimicking bigger rivals is a hallmark of its success. So is helping its retailers with new systems.

Picking and Choosing

How does Paramount pick up market share? By cementing new relationships, such as with Fred's Stores, a Memphis-based retailer with 530 stores in 14 states. Paramount executives call Fred's "our Wal-Mart" because it's their biggest set of stores run by one customer.

Fred's hadn't tried scan-based trading, Conforto says, "but we held their hand, and they've done a great job." Besides providing technical assistance and advice, Conforto recommended a former colleague whom Fred's wound up hiring to help with the work. "The partnership is deeper than 'here are some UPCs, now send us some money,'" Conforto says. Fred's has also become an important reference customer, opening doors for Paramount at other retail chains, he adds.

But technology isn't always the way to gain ground on Hallmark or American Greetings. Paramount's Pawtucket warehouse, for instance, is relatively low-tech. Boxes of cards sit in trays on slanted shelves, so that a new box will slide forward whenever an empty one is removed.

Warehouse personnel who fill orders get bonuses based on the accuracy of the card shipments they put together for customers. They face random checking of orders at the warehouse. But their work is even checked, automatically, at the cash register. An error caught at a customer's checkout lane can be traced to the individual who packed the order, through the carton's bar-code.

This system of rewards and verification is so successful that Paramount officials have grown skeptical of inventory management vendors promising performance improvements.

"We're close to 99% accuracy, and we can't justify the cost to pick up another half a percent," Choquette says. Paramount's Toronto warehouse, by contrast, has a more mechanized and automated order picking operation, and its performance metrics don't appear to be any better.

As Davison points out: "We love technology and we've made a lot of technology investment, but as a small private company, we've had to pick and choose."

David F. Carr David F. Carr is the Technology Editor for Baseline Magazine, a Ziff Davis publication focused on information technology and its management, with an emphasis on measurable, bottom-line results. He wrote two of Baseline's cover stories focused on the role of technology in disaster recovery, one focused on the response to the tsunami in Indonesia and another on the City of New Orleans after Hurricane Katrina.David has been the author or co-author of many Baseline Case Dissections on corporate technology successes and failures (such as the role of Kmart's inept supply chain implementation in its decline versus Wal-Mart or the successful use of technology to create new market opportunities for office furniture maker Herman Miller). He has also written about the FAA's halting attempts to modernize air traffic control, and in 2003 he traveled to Sierra Leone and Liberia to report on the role of technology in United Nations peacekeeping.David joined Baseline prior to the launch of the magazine in 2001 and helped define popular elements of the magazine such as Gotcha!, which offers cautionary tales about technology pitfalls and how to avoid them.

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