A Tangle of Networks

By Elizabeth Bennett Print this article 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.

A Tangle of Networks

Ten years ago Hannaford, now owned by Delhaize Group, a Belgian retailer, was a case study in catch-as-catch-can networking, says CIO Bill Homa, who was hired by the chain in 1996. Inventory and order data was decentralized in its stores, and there was little or no standardization across stores when it came to operating systems, networks, data protocols and transmission lines. "There was no technology strategy," Homa recalls. "It was a disaster."

The Northeastern supermarket chain was using four protocols: Transmission Control Protocol/Internet Protocol (TCP/IP), the standard for most commercial networks; Systems Network Architecture, IBM's proprietary protocol for connecting computers; X.25, a standard protocol for wide area networks that use phone or ISDN lines; and asynchronous protocol, which transmits data in packets. Data was transmitted via three types of transmission lines: satellite, telephone dial-up and leased lines, which directly connect two locations. Transmissions were very slow, Homa says, and the network was unreliable. If it rained hard, the satellite connections went out, and in the Northeast, he observes, "It's always raining somewhere."

He estimates that the unstable network was costing the company millions of dollars a year in lost sales and expenses.

Each store maintained four or five servers with its own inventory and order data to compensate for unpredictable connections with headquarters, Homa says. "We would lose connectivity in stores," he explains. "We used to lose data and couldn't keep synchronized between the corporate offices and the stores."

And the data that was available was often useless. In the old days, managers used to mark down aging meat by posting a sign in the meat case with the price discount. The cashier knocked down the price at the register, but the only information that was transmitted to the back office was that meat was on sale. "We didn't know if it was steak, sirloin or roast beef," Homa says.

Managing the network was a "nightmare," according to Homa. Prior to 1998, every technical problem required a store visit: "It was poor architecture and it was expensive."

In 1998, Hannaford designed and built a new network. Verizon laid the T1 lines, and Cisco Systems installed the routers and switches for the then-new Asynchronous Transfer Mode (ATM) technology that transferred data in packets over the network. IBM installed its System p5 mainframe server in the company's corporate offices to house data from all locations.

Today, the high-speed network is about 80 times faster than the old one, which transported data at 19.2 kilobits per second, according to Homa. The network relies on one protocol (TCP/IP) and one type of transmission line, a frame relay setup that runs over a 1.5 megabit-per-second T1 line. All 158 Hannaford stores are hooked up to the network. (In 2004, Hannaford replaced the ATM system with Cisco's less expensive Quality of Service software, which monitors and maximizes network performance.)

NEXT PAGE: Piggybacking On ATM

This article was originally published on 2006-10-02
Senior Writer
Elizabeth has been writing and reporting at Baselinesince its inaugural issue. Most recently, Liz helped Fortune 500 companies with their online strategies as a customer experience analyst at Creative Good. Prior to that, she worked in the organization practice at McKinsey & Co. She holds a B.A. from Vassar College.
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