Smart Work in Retail – Customer Stories

Smart Work in Retail – Customer Stories

 Smart Work in Retail – Customer Stories

Smart Work for a Smarter Planet

The world has become highly instrumented, interconnected and intelligent: from our food
and water, to our energy, homes and transportation, to our cities and governments and, of
course, our businesses and places of work.

The workplace may be smarter, but it is also more challenging because of increasingly
rapid and unpredictable change. Everything from swings in markets, to increasing global
competition to new consumer expectations and more are changing at a furious pace.

To keep up, we work harder. But to win, we must work smarter.

Smart work embraces, even takes advantage of, change by creating a more agile,
collaborative and connected business environment. It can make your business more
profitable and productive. While it makes the world a better place to live and work.

Some organizations are showing the way. In this book, you’ll see how our customers
from around the world, in the retail industry, are connecting people and processes to:

Optimize business performance

Use technology to meet business needs quickly

Maximize people's effectiveness working together

To learn more about Smart Work, visit ibm.com/smartwork. Additional case studies are
available at ibm.com/smartwork/success. We would love to have your organization as a
client reference. To become an IBM client reference, visit ibm.com/ibm/clientreference.
Smart Work in Retail – Customer Stories
 Smart Work in Retail – Customer Stories
Table of Contents
I-800-FLOWERS.COM, United States.....................................................................................7
1-800-FLOWERS.COM, INC needed to replace multiple, diverse, siloed e-commerce systems
with a unified technology platform.

Bazaar Voice, United States .....................................................................................................11

Bazaarvoice needed a vehicle to help its own software solution to increase online sales and
create innovative tools to facilitate online commerce.

Gewandhaus Gruber, Germany ..............................................................................................13

Gewandhaus Gruber wanted to better understand and reward its existing customers, while
attracting new ones. It sought a cutting-edge loyalty offering that would help it increase revenue
and differentiate itself from its competitors.

Hartman Rauta Oy, Finland....................................................................................................15

The company wanted to take advantage of a number of new updates and improvements available
in the latest version of Lotus Notes software, including new features that would improve mobile
data security. In addition, Hartman wanted to implement a virtual group working environment to
support improved communication and collaboration.

Hess, United States....................................................................................................................17

Hess Corporation needed a new inventory solution that would automate processes and keep data
up to date.

Isuzu Australia, Limited, Australia.........................................................................................19

Isuzu Australia Limited needed a solution to improve the speed and accuracy of communications
between head office and the dealerships as well as facilitate increased collaboration with
business partners.

Major Retailer, United States ..................................................................................................23

Major Retailer wanted to determine whether its hybrid inventory strategy with some stock
keeping units (SKUs) was appropriate for its business.

Max Bahr, Germany.................................................................................................................25

Max Bahr wanted to meet its customer demand for any of 40,000 products in over 80 outlets with
low replenishment and storage costs.

METRO Group, Germany.......................................................................................................27

METRO Group’s retail store meat tracking system was entirely manual, a time-consuming and
error-prone process. METRO Group needed to gain a better grasp of the inventory management
of its meat products, while working to improve customer food safety.

Moosejaw, United States ..........................................................................................................29

To thrive in the highly competitive market for outdoor adventure gear, Moosejaw
Mountaineering needed to create a customer experience that would engage a customer
community whose appetite for extreme sports is matched by a hunger for communication and
collaboration.

i
 Smart Work in Retail – Customer Stories
Table of Contents
Sears Canada, Canada..............................................................................................................33
Sears Canada wanted to deliver on business objectives and reduce development cost through
code reuse to eliminate coding and recoding of the same integration, and speed the exchange of
information with business partners to improve business agility to be competitive in today’s
economy.

South American Retailer, Brazil .............................................................................................37

South American Retailer needed to enable an enterprise-wide sales information portal with
dramatically improving productivity and information access while eliminating millions of printed
pages annually.

Spotlight Proprietary Group, Australia .................................................................................39

Spotlight Proprietary Group wanted to have a strong and flexible IT Infrastructure with
sufficient strategic dimension or vision.

Yansha, China ...........................................................................................................................55

Yansha needed to increase its competitiveness against both local retailers and new foreign
competitors in an increasingly deregulated Chinese retail industry through the adoption of new
business processes, automation and business intelligence.

ii
 Building a Smarter Planet

1-800-FLOWERS.COM: Creating an
e-commerce platform for the future

Overview

■ Business Challenge
To better enable synergies
between its 14 gifting brands,
create greater business agility,
and reach its goal of becoming
one of the Top 10 among
Internet Retailer Top 500 com-
panies, 1-800-FLOWERS.COM,
INC. needed to replace multi-
ple, diverse, siloed e-commerce
systems with a unified technol-
ogy platform.
■ Solution
1-800-FLOWERS.COM teamed
with IBM to implement
IBM WebSphere® Commerce
for two of its gift food brands as
an initial proof of concept
for the platform. The site,
thepopcornfactory.com has
seen a consistent rise in conver-
sion since its November launch.
Using knowledge gained from
this first rollout, the company
will take a greater role in transi-
tioning most of its other brands
to the new platform over the
coming year.
■ Key Benefits
— Enables more rapid creation
and deployment of retail
Web sites
— Facilitates cross-selling
between brands
1-800-FLOWERS.COM, INC. is the “ The platform will
world’s largest florist and gift shop, with
enable the individual
revenues approaching US$1 billion. The
company is marked by its large-scale
brands to do things
vision and forward thinking, positioning they would never
itself at the leading edge of trends with have been able to
innovative marketing such as “green” cost-justify before. It’s
initiatives that reward responsible con-
going to give us
sumer behavior. For example, its
BloomNet® brand will, in exchange for
unprecedented agility.”
a customer forgoing a BloomNet Florist — Steve Bozzo, CIO,
paper directory, plant trees as part of a 1-800-FLOWERS.COM
reforestation campaign. It is also intro-
ducing environmental responsibility as a
theme across all of its businesses, with
awareness campaigns on social net-
working Web sites.
The company has a thorough under-
standing of the “gifting” market space in
which it operates, and sees great
potential for synergy by offering multiple

Page 7 of 60
 Making the most of brand synergy through shared technology
Business Benefits
● Enables more rapid creation and
deployment of retail Web sites,
allowing 1-800-FLOWERS.COM to try
out new offerings with very little
investment and risk
● Facilitates cross-selling between
brands by unifying the underlying
technology
● Provides the potential for information
sharing across business units, opening
up the possibility for more effective
marketing to customers
● Ensures a consistent look and feel
across the company
● Provides a rich, differentiated customer
experience
● Reduces maintenance and
development costs
“ Tearing the walls
down will enable us to
go to market much
more effectively. We’ll
have a lot more shared
information, and that
will allow us to cross-
sell much better.”
— Steve Bozzo
Page 8 of 60
specialty brands. The 1-800-FLOWERS.COM strategy has been to grow three
ways: organic growth, internal business development and strategic acquisitions.
Today, it has 14 brands that sell everything from popcorn to gift baskets to gour-
met food and children’s gifts.
The strategy has given 1-800-FLOWERS.COM a broad and diverse portfolio, but it
also created a business challenge. To fully realize the benefits of its multibrand
strategy, they must be unified behind the scenes, but as is usually the case, each
new acquisition brought with it a different set of business processes and technol-
ogy, resulting in a large number of siloed operations that were difficult to integrate.
To promote brand synergy, the company has undertaken “Fresh Digital™,” an
enterprise-wide transformation initiative. “Unifying lines of business is a better
approach to retail,” says Steve Bozzo, CIO at 1-800-FLOWERS.COM. “By sharing
resources, systems and services, we accomplish a number of things. We become
a more dynamic and agile enterprise because we’re breaking down internal
barriers—which will also help us develop new business intelligence. We’ll be able to
leverage resources and services of all kinds across the brands, from information to
IT to shipping to warehousing, which will let us work smarter. And by consolidating,
sharing and implementing more efficient technologies as well as implementing
measures like sustainable packaging and reducing our reliance on paper catalogs,
we’ll be able to reduce our environmental footprint, which puts credibility behind
our green marketing efforts.”
Build versus buy
The first step on the consolidation path was to give the individual brands a com-
mon e-commerce platform. The 1-800-FLOWERS.COM brand itself uses a robust
e-commerce system that was developed entirely in-house and which continues to
serve the company very well, with a demonstrated ability to handle even the heavi-
est holiday volumes. It became clear, however, that using this platform to support
all of the other brands was not the best use of the company’s resources. Rolling
out the 1-800-FLOWERS.COM platform to its other brands would require replicat-
ing it over and over and it was simply not the most efficient way forward.
“We’re very happy with our core platform. Its performance proves we have the abil-
ity to create really strong e-commerce solutions, but fundamentally we’re not a
software company—we’re a gifting company,” says Steve Bozzo. “It made more
sense for us to find a best-of-breed e-commerce platform and work with it as
 opposed to spending a lot of time and energy creating our own. Also, by going
Solution Components
with an industry leader, we’re leveraging its research and development dollars
instead of using ours to reinvent the wheel as well as reducing the size and envi- Software

ronmental impact of our infrastructure.” ● IBM WebSphere Commerce

● IBM WebSphere Message Broker

The company chose IBM WebSphere Commerce, in part because of the flexible
● IBM WebSphere MQ
and efficient way in which it functions behind the scenes. “With WebSphere
Hardware
Commerce, basically you’ve got a single Web site that handles all of the transac-
tions,” says Bozzo. “This central engine supports as many customer-facing Web ● IBM Power Systems
stores as you like, and it’s easy to add new ones or roll out new features across Services
brands.”
● IBM Global Business Services

● IBM Global Financing

The platform, running on IBM Power Systems™ hardware, also has to integrate
seamlessly with the company’s existing systems. The 1-800-FLOWERS.COM
platform will remain in place, and most of the other brands will be migrated to the
new WebSphere Commerce-based system over the coming year. In the interim,
everything needs to continue functioning transparently. To accomplish this, the
service-oriented architecture solution includes IBM WebSphere Message Broker
and IBM WebSphere MQ, which form an enterprise service bus that ties the legacy
Smarter Solutions for Retail
systems together.
To realize its vision of synergy among its
14 brands and meet ambitious growth
The initial rollout supports two of the company’s gift food brands, and took a total
goals, 1-800-FLOWERS.COM, INC.—the
of only seven months with the help of IBM Global Business Services. “We went world’s largest florist and gift shop—is
from Web 0.5 to Web 2.0 in only a few months; we could not have done that with- deploying a single e-commerce platform.
out IBM,” Bozzo says. Knowledge transfer and lessons learned during the initial The solution, based on IBM WebSphere
Commerce, is designed to replace
rollout will help 1-800-FLOWERS.COM to take a greater role in launching the
multiple siloed systems. The new
remaining gift food brands. In this way, the company will be well prepared to launch platform adds flexibility and agility,
future brand storefronts entirely on its own. making it significantly easier to launch
new Web commerce brands—allowing
the company to try new business
IBM was chosen mostly because of the capabilities of WebSphere Commerce and
strategies with little risk. In addition,
the expertise of IBM Global Business Services, but Bozzo emphasizes another the shared platform facilitates cross-
important consideration: IBM Global Financing. “Because of the uncertainty we’re selling and information sharing
seeing in the macro economy these days, making it easier to make the investment across the enterprise, which helps
1-800-FLOWERS.COM gain maximum
was a key decision driver for us. IBM was able to give us what we needed in that
benefit from its many business units.
area.”

Page 9 of 60
 Supporting a visionary business strategy © Copyright IBM Corporation 2009
IBM Corporation
The ultimate goal of the company’s overall Fresh Digital™ initiative is to eliminate all
1 New Orchard Rd.
of the barriers between business units, enabling the full sharing and leveraging of Armonk, NY 10504
U.S.A.
information across the entire enterprise and throughout its back-end systems.
Produced in the United States of America
“Over the long term, our customers will be able shop any of our brands, and we’ll January 2009
be able to ship from a unified location. That’s a much more streamlined, efficient All Rights Reserved

and smarter model,” Bozzo says. IBM, the IBM logo, ibm.com, Power Systems
and WebSphere are trademarks or registered
trademarks of International Business
The implementation of WebSphere Commerce is a critical first step—the benefits of Machines Corporation in the United States,
other countries, or both. If these and other
shared services that it offers will trickle down throughout the organization over time IBM trademarked terms are marked on their first
and enable new ways of going to market. “Tearing the walls down will enable us to occurrence in this information with a trademark
symbol (® or ™), these symbols indicate U.S.
go to market more effectively. We’ll have a lot more shared information about buy- registered or common law trademarks owned
ing patterns and customer profiles and that will allow us to cross-sell much better,” by IBM at the time this information was
published. Such trademarks may also be
says Bozzo. “Also, we’ll be able to try new ideas with little risk. With the new registered or common law trademarks in other
platform, we can launch an entirely new brand fairly easily, because all of the countries. A current list of IBM trademarks is
available on the Web at “Copyright and
e-commerce technology is already there.” trademark information” at ibm.com/legal/
copytrade.shtml
Other company, product or service names may
The most significant impact of the platform, however, will be in the competitiveness
be trademarks or service marks of others.
it brings to 1-800-FLOWERS.COM by allowing the company to leverage best prac- This case study illustrates how one
tices across the entire business. “The platform will enable the individual brands to IBM customer uses IBM products. There
is no guarantee of comparable results.
do things they would never have been able to cost-justify before,” Bozzo says. “It’s
References in this publication to IBM products
going to give us unprecedented agility. We’ll be able to re-merchandise our Web or services do not imply that IBM intends to
make them available in all countries in which
stores on the fly in response to competitive offers. That will make us much more
IBM operates.
relevant to the customer, which is critical. Customer expectations continue to
ratchet up, and this new platform is positioning us to meet them going forward.
We’ll have an immediacy and responsiveness that will give us a real competitive
advantage.”

For more information

To learn more about how IBM can help transform your business, please contact
your IBM sales representative or IBM Business Partner.

Visit us at: ibm.com/retail

ODC03103-USEN-00

Page 10 of 60
 Case Study QuickView
Industry: Retail
Bazaarvoice social commerce solutions boost sales at online
retail sites powered by IBM WebSphere Commerce
Over view
Bazaarvoice, Inc.
Austin, Texas
www.bazaarvoice.com
Products
• IBM WebSphere Commerce
“Joining PartnerWorld Industry
Networks and using the
exceptional resources that
IBM can bring to a partner
lets us take our business
to a whole new level. Our
relationship with IBM is making
Bazaarvoice grow faster and
in more robust ways than we
would have otherwise seen.”
Brant Barton,
vice president,
business development,
Bazaarvoice
Page 11 of 60
Bazaarvoice is a pioneer in developing technology and services
that encourage and harness online word-of-mouth marketing
and boost e-commerce. Working with IBM, Bazaarvoice chose
IBM WebSphere® Commerce as a superior platform for its
social commerce solutions.
Challenge
In the offline world, word of mouth is a powerful force, and perhaps
the most trusted form of advertising. Bazaarvoice, an IBM Advanced
Business Partner that participates in IBM PartnerWorld® Industry
Networks and is optimized in the retail industry, saw the potential for
word-of-mouth marketing to increase online sales and created
innovative tools to facilitate this capability.
Solution
Bazaarvoice core products -- Ratings & Reviews™, Ask & Answer™,
and Bazaarvoice Stories™ -- provide capabilities that are critical to
differentiating retailers and driving sales. The tools, respectively, help
enable customers to rate products and write reviews, ask questions and
get answers directly from other consumers, and share user experiences.
They can also seamlessly feed data to IBM DB2® databases.
Bazaarvoice solutions, which are hosted, managed and monitored,
provide advanced analytics. They work with any e-commerce platform,
including IBM WebSphere Commerce, a next-generation solution for
e-commerce needs which is the preferred foundation for the
applications for multi-channel retailers.
“WebSphere Commerce provides a whole set of possibilities that
simply wouldn’t be possible with other e-commerce platforms that
lack WebSphere’s multi-channel capabilities,” said Brant Barton, vice
president, business development, Bazaarvoice.
Benefits
Bazaarvoice social commerce solutions running on IBM WebSphere
Commerce:
• Increase online sales and reduce return rates
• Improve customer satisfaction and loyalty
• Improve search ranking and drive qualified leads
• Provide better understanding of customer wants and needs
 © Copyright IBM Corporation 2007
Route 100
Somers, NY 10589
U.S.A.

Produced in the
United States of America
12-07
All Rights Reserved

International Business Machines Corporation, the IBM

logo, DB2, PartnerWorld, and WebSphere are trademarks
or registered trademarks of IBM Corporation in the United
States, other countries, or both.

Windows is a trademark of Microsoft Corporation in the

United States, other countries, or both.

Other company product or service names may be

trademarks or service marks of others.

The information contained in this documentation is

provided for information purposes only. While efforts were
made to verify the completeness and accuracy of the
information contained in this documentation, it is provided
“as is” without warranty of any kind, expressed or implied.
In addition, this information is based on IBM’s current
product plans and strategy, which are subject to change
by IBM without notice. IBM shall not be responsible for
any damages arising out of the use of, or otherwise
related to, this documentation or any other documentation.
Nothing contained in this documentation is intended to,
nor shall have the effect of, creating any warranties or
representations from IBM (or its suppliers or licensors), or
altering the terms and conditions of the applicable license
agreement governing the use of IBM software.

Page 12 of 60
 Innovation that matters
Gewandhaus Gruber increases customer loyalty and sales revenue by
using cutting-edge IBM and IBM Business Partner technology.
Overview
Gewandhaus Gruber
Erding, Germany
www.gewandhaus-gruber.de
Industry
• Retail
Employees
• 1,000
Products
• IBM Anyplace Kiosk
• IBM DB2® for Linux®
IBM Business Partner
• it-werke Technology GmbH
“The system is unusual and
distinctive…it has a number
of practical advantages…
particularly in terms of lower
operational costs. With no
need to print cards, post
them, manage them and
replace them when lost, the
savings are considerable.”
— Svenja Wittrowski, project leader,
Gewandhaus Gruber
Page 13 of 60
Gewandhaus Gruber is a clothing retailer with a 350-year history of
dressmaking and retailing. It currently has eight branch stores, two
outlets and a sports shop where it sells both traditional Bavarian clothing
and formal dresses of other brands.
Challenge
Gewandhaus Gruber is a successful mid-level to high-end clothing merchant in
Germany. Wanting to better understand and reward its existing customers while
attracting new ones, the company decided to implement a customer loyalty
program. But traditional card-based loyalty solutions were predictable and could
be expensive to maintain. Instead, the retailer sought a cutting-edge loyalty offering
that would help it increase revenue and differentiate itself from its competitors.
Solution
Using a combination of IBM and IBM Business Partner technology, the retailer
launched the first fingerprint identification–based loyalty program and payment
method in Germany. The solution allows the client’s loyalty club members to quickly
and conveniently pay for items via a fingerprint scanner that also tracks purchases
and that rewards members through loyalty incentives. Further, it provides Gewandhaus
Gruber with in-depth sales reports that provide decision makers and marketers with
valuable insight into the way customers spend their money.
Benefits
• Earned d2.6 million —15 percent — of annual revenue in just six months
through approximately 4,500 club members
• Saved d100,000 in operational costs over a comparable card-based
loyalty program
• Increased revenue by 4% and improved customer satisfaction
 © Copyright IBM Corporation 2008

IBM Corporation
1 New Orchard Road
Armonk, NY 10504
U.S.A.

Produced in the United States of America

September 2008
All Rights Reserved

IBM, the IBM logo, ibm.com and DB2 are trademarks

or registered trademarks of International Business
Machines Corporation in the United States, other
countries, or both. If these and other IBM trade-
marked terms are marked on their first occurrence in
this information with a trademark symbol (® or ™),
these symbols indicate U.S. registered or com-
mon law trademarks owned by IBM at the time this
information was published. Such trademarks may
also be registered or common law trademarks in
other countries. A current list of IBM trademarks is
available on the Web at “Copyright and trademark
information” at ibm.com/legal/copytrade.shtml

Other company, product and service names may

be trademarks or service marks of others.

The information contained in this documentation

is provided for informational purposes only. While
efforts were made to verify the completeness
and accuracy of the information contained in this
documentation, it is provided “as is” without war-
ranty of any kind, express or implied. In addition,
this information is based on IBM’s current product
plans and strategy, which are subject to change by
IBM without notice. IBM shall not be responsible for
any damages arising out of the use of, or otherwise
related to, this documentation or any other docu-
mentation. Nothing contained in this documentation
is intended to, nor shall have the effect of, creating
any warranties or representations from IBM (or its
suppliers or licensors), or altering the terms and
conditions of the applicable license agreement
governing the use of IBM software.

This document illustrates how one organization

uses IBM products. Many factors have contributed
to the results and benefits described; IBM does not
guarantee comparable results elsewhere.

References in this publication to IBM products or

services do not imply that IBM intends to make them
available in all countries in which IBM operates.

REC03001-USEN-00
Page 14 of 60
 Case Study QuickView

Hardware retailer increases mobile messaging security and flexibility

while improving integration with IBM Lotus

Hartman Rauta Oy operates a number of hardware and do-it-yourself

Overview
(DIY) stores for private consumers and the construction industry.
Hartman Rauta Oy The company’s retail stores focus on providing products for leisure
Vaasa, Finland
activities as well as interior decoration and construction.
www.hartman.fi

Industry Challenge
• Retail Hartman Rauta Oy (Hartman) had been using IBM Lotus Notes V7 software
hosted on an IBM System i5 server as it legacy e-mail and messaging platform,
Employees
and was satisfied with the existing system. However, the company wanted to take
• 1,000-5,000
advantage of a number of new updates and improvements available in the latest
Products version of Lotus Notes software, including new features that would improve mobile
• IBM Lotus Mobile Connect
® ®
data security. In addition, Hartman wanted to implement a virtual group working
• IBM Lotus Quickr ™ environment to support improved communication and collaboration.
• IBM Lotus Notes V8.5
®

Solution
• IBM Lotus Notes Traveler V8.5
Hartman worked with IBM to upgrade its e-mail and messaging platform to
• IBM System i5®
IBM Lotus Notes V8.5 software. The upgrade allowed the company to replace
its legacy Intellisync software with IBM Lotus Notes Traveler V8.5 software,
offering quick access to e-mail and attachments, calendar, address book,
journal and to-do list for Lotus Notes mobile users. Hartman also implemented
IBM Lotus Mobile Connect V8.5 software, helping to increase mobile security
“IBM Lotus software for the company’s virtual private network connections. Hartman implemented
provides the tools we IBM Lotus Quickr V8.5 team collaboration software to create a shared work-

need to leverage mobile
productivity—without
sacrificing security.”
—Jari Pienkuukka, Director, Logistics
and ICT, Hartman Rauta Oy
space that helps groups work together on projects and easily share everyday
content such as documents and rich media.
Benefits
• Increased security and flexibility of mobile connections
• Improved integration between the Lotus Notes platform and the company’s
mobile Symbian operating system–based handhelds

• The Domino Attachment and Object Service built into Lotus Notes V8.5 helps
save storage capacity by minimizing duplicate file attachments

Page 15 of 60
 © Copyright IBM Corporation 2009

IBM Software Group

Route 100
Somers, NY 10589

Produced in the United States

August 2009
All Rights Reserved

IBM, the IBM logo, ibm.com, Lotus, Lotus

Notes, Quickr and System i5 are trademarks of
International Business Machines Corporation,
registered in many jurisdictions worldwide. A
current list of IBM trademarks is available on the
Web at “Copyright and trademark information”
at ibm.com/legal/copytrade.shtml.

Other company, product or service names may be

trademarks or service marks of others. The informa-
tion contained in this documentation is provided
for informational purposes only. While efforts were
made to verify the completeness and accuracy of
the information contained in this documentation, it is
provided “as is” without warranty of any kind, express
or implied. In addition, this information is based on
IBM’s current product plans and strategy, which are
subject to change by IBM without notice. IBM shall
not be responsible for any damages arising out of the
use of, or otherwise related to, this documentation
or any other documentation. Nothing contained in
this documentation is intended to, nor shall have the
effect of, creating any warranties or representations
from IBM (or its suppliers or licensors), or altering the
terms and conditions of the applicable license agree-
ment governing the use of IBM software.

LOC14140-USEN-00

Page 16 of 60
 Case Study QuickView
Hess Corporation maximizes its profitability with real-time pricing
updates thanks to an SOA built using IBM software.
Overview
Hess Corporation
Woodbridge, New Jersey, USA
www.hess.com
Industry
• Chemicals & Petroleum
• Retail
Products
• IBM Lotus Expeditor
• IBM WebSphere Process
Server
IBM Business Partner
• Openstream Inc.
“With the Openstream and
IBM solution, it is so much
easier to track inventory
across our 870 stores. It
streamlines our inventory
processes while providing
us with the peace of mind
of knowing that the data is
actually correct.”
— Hess Corporation
Page 17 of 60
Hess Corporation engages in the exploration, production and refinement of
crude oil and natural gas. Operating more than 1,350 retail gas stations in
14 eastern U.S. states, the organization also offers energy-related utilities
services to commercial and retail customers.
Challenge
Locked in stiff competition, Hess Corporation’s retail gas station business relied on
smooth supply chain operation to minimize costs and maintain high profit margins.
But the organization’s manual product pricing and inventory processes frustrated
these goals by consuming employee resources and leaving the organization open to
errors. Even worse, these manual processes led to delays that frequently resulted in
data that was out of date before it had been entered into the company’s database.
Hess Corporation needed a new inventory solution that would automate processes
and keep data up to date.
Solution
IBM delivered an IBM Retail Integration Framework solution (built using IBM Lotus®
Expeditor software) that leverages a service-oriented architecture (SOA) to provide
Hess Corporation with real-time insight into the inventory levels of its retail gas
stations. Using personal digital assistants (PDAs) and software from IBM Business
Partner Openstream Inc., the client’s staff can scan station inventory and upload
that data to a local database. This information is then distributed to the client’s
headquarters using Lotus Expeditor and IBM WebSphere ® Process Server
software via the SOA. The solution also enables Hess Corporation to update
pricing information across its entire enterprise at one time, removing manual steps.
Benefits
• Maximizes profitability by supporting real-time price change updates
• Reduces inventory-tracking errors and duplicate orders by eliminating
manual processes
• Streamlines order and inventory processes with an SOA, improving
employee productivity
 © Copyright IBM Corporation 2008

IBM Corporation
Software Group
Route 100
Somers, NY 10589
U.S.A.

Produced in the United States of America

04-08
All Rights Reserved

IBM, the IBM logo, Lotus and WebSphere are

trademarks of International Business Machines
Corporation in the United States, other countries,
or both.

Other company, product and service names may

be trademarks or service marks of others.

The information contained in this documentation

is provided for informational purposes only. While
efforts were made to verify the completeness and
accuracy of the information contained in this docu-
mentation, it is provided “as is” without warranty of
any kind, express or implied. In addition, this infor-
mation is based on IBM’s current product plans and
strategy, which are subject to change by IBM without
notice. IBM shall not be responsible for any dam-
ages arising out of the use of, or otherwise related
to, this documentation or any other documentation.
Nothing contained in this documentation is intended
to, nor shall have the effect of, creating any warran-
ties or representations from IBM (or its suppliers or
licensors), or altering the terms and conditions of the
applicable license agreement governing the use of
IBM software.

WSC14034-USEN-00
Page 18 of 60
 IBM Australia

Isuzu Australia takes the road to

collaboration success with IBM®
WebSphere and Lotus technologies

Overview

Problem
Isuzu Australia Limited (IAL) has
a large national dealer network
which is the driving force behind
the business. The company needed
a solution to improve the speed
and accuracy of communications
between head office and the
dealerships as well as facilitate
increased collaboration with
business partners.

Solution
IAL chose to implement IBM
WebSphere® Portal linked to other
collaboration tools including Lotus®
Sametime®, Lotus Quickr™, Portal
Document Manager (PDM) and
About Isuzu Australia Limited expensive and time-consuming, it was
Web Content Management.
Isuzu Australia Limited is a wholly- also vulnerable to errors. Dealers were
Benefits owned subsidiary of Isuzu Motors responsible for the internal distribution
Communications both internally and Limited (Japan), and is responsible for of the various materials, resulting in
externally with dealers and partners the marketing, distribution and support frequent failure to reach the appropriate
have been radically improved.
of Isuzu Trucks in Australia. With just dealer recipients. In addition to this any
Information is now hosted centrally
65 employees in Australia, IAL depends errors or update to materials meant a
on a web-based portal, allowing all
largely on its national dealer network repeat of the above process, and again
parties to access real time, up to
of over 1000 dealership staff to drive there was no immediate confirmation of
date information at any time.
its business and maintain its market receipt and use by dealers of the up to
leading position. date information.

Looking towards the latest technology
The Isuzu Truck national dealer
network is the retail end of the
distribution channel for Isuzu
Trucks sold in Australia, hence the
requirement for access to the latest
materials and information from IAL
head office. In 2005 the company
(IAL) was distributing all information to
dealers manually in printed format via
surface mail. Not only was this system
It was evident to IAL that both internal
and external communications could
be improved through utilisation of new
technologies. Aninka Morhall, Staff
Operations Manager at Isuzu Australia’s
Head Office, in Port Melbourne, was
tasked with sourcing an online portal
and content management solution
to supercede the existing manual
processes.

Page 19 of 60
 Selection of a portal
Morhall evaluated solutions from a
number of leading vendors, but settled
on IBM WebSphere Portal along with
Workplace Web Content Management
(WCM). Commenting on IAL’s reasons
for selecting IBM technology Morhall
said, “We chose WebSphere Portal
and WCM because this solution was
more capable of meeting our needs
than the other offerings in the market,
in particular in terms of its scalability.
We were also interested in all of the
extra collaborative components.
As a long time Lotus Notes user ®
we knew these systems would
integrate seamlessly with our existing
technology platforms.”
“We chose WebSphere Portal and WCM
because this solution was more capable of
meeting our needs than the other offerings
in the market, in particular in terms of its
scalability. We were also interested in all of
the extra collaborative components. As a long
time Lotus Notes user we knew these systems
would integrate seamlessly with our existing
technology platforms.”
- Aninka Morhall, Staff Operations Manager, Isuzu Australia
Page 20 of 60
IAL also elected to expand its
collaboration capabilities by adding
Lotus Sametime instant messaging,
Lotus Quickr for team based project
management and Portal Document
Manager (PDM) to create a central
repository for documents. “These
additional systems were implemented
to enable teams to collaborate around
specific projects and documents and to
cut down on sharing of documents as
email attachments” Morhall commented.
The portal and collaboration tools were
rolled out to staff and 1000+ dealership
staff, with access controlled by a
complex security structure allowing the
right people to see the right content at
the right time. The systems were quickly
adopted by the majority of users and
today are used companywide.
Collaboration pays off
The implementation of the WebSphere
Portal enhanced by Lotus collaboration
tools has totally transformed the
communication processes between
Isuzu and its dealer network. Today
all materials are hosted on the
portal and dealers simply have to
log on to instantly access the latest
information. The result has meant
vastly improved, more accurate and
timely communications with IAL’s
dealer network enhancing most areas
of their business operations, and even
increasing their ability to sell more
effectively. The dealers can also log onto
Sametime instant messaging through
a web interface, enabling them to
communicate with head office contacts
in real time and quickly trouble-shoot
any current queries.
Internal communication within IAL has
also improved. Staff can now publish
information themselves, expediting
access to important information. Instant
messaging has also meant employees
rely less on email and more business
decisions can be made in real time. The
discipline of using a central document
repository hosted online means fewer
documents are shared as attachments
and users can be more confident they
are accessing the most recent version.
 Morhall explained, “Now our company Continuing the journey Leading Communication for the Truck
announcements are no longer sent The implementation of WebSphere Market leader
by email – people know they have to Portal and Lotus collaboration tools As Australian truck market leader for
log into the portal if they want to be has given IAL a taste for more 19 consecutive years (20 by the end
kept up to date. Anyone can publish technology and the productivity gains of 2008), Isuzu Australia recognises
information, it’s simply reviewed for it can deliver. Morhall is currently rolling that maintaining this enviable record
appropriateness, and then it is posted out the use of wiki technology which is dependent on providing leading
immediately. All our business policies is available in Quickr, “We are going products and services. IAL is also
and procedures are hosted on the to start using wiki technology in Lotus committed to demonstrating leadership
portal as well.” Quickr to further improve information in all areas of its operations, and by
sharing – that’s our latest exciting selecting IBM WebSphere Portal and
Since the portal went live in 2006
project here.” Morhall is also looking at Lotus Software technologies to provide
Isuzu has realised substantial
incorporating IBM’s Workplace learning leading communications between
business benefits. The company has
management system into the portal IAL and its dealer network its market
enjoyed cost reductions since it no
to further extend knowledge sharing leadership is more easily maintained.
longer has to print materials for the
and collaboration based e-learning
dealer network and distribute them
throughout the organisation.
through the mail. Cost aside, Isuzu
now distributes information to its
dealers instantaneously, confident
in the knowledge that dealers are
always just a click away from the “Now our company announcements are no
latest information. This has reduced longer sent by email – people know they have
errors across the entire dealer
to log into the portal if they want to be kept
network.
up to date. Anyone can publish information, it’s
Armed with the latest technology simply reviewed for appropriateness, and then it is
tools, collaboration and knowledge
posted immediately. All our business policies and
sharing has increased – for example
teams can discuss a particular
procedures are hosted on the portal as well.”
document over a web meeting, or
- Aninka Morhall, Staff Operations Manager, Isuzu Australia
individuals can access the real-time
status of a project, task or milestone
simply by logging into the portal.

Page 21 of 60
 For more information
Please call 132 426 in Australia or
0800 801 800 in New Zealand.

© Copyright IBM Australia Limited 2008

ACN 79 000 024 733. © Copyright IBM
Corporation 2008. All Rights Reserved

IBM Australia Limited

IBM Centre
Level 13, 601 Pacific Highway
St Leonards NSW 2065

08/08

IBM, the IBM logo, Websphere, Lotus, Sametime,

Quickr and Lotus Notes are trademarks or
registered trademarks of International Business
Machines Corporation in the United States, other
countries or both.

Intel, the Intel Inside Logo and Pentium are

registered trademarks of Intel Corporation or its
subsidiaries in the United States or other countries.

Other company, product and service names may

be trademarks or service marks of others.

Important Privacy Information: If you would like

to request access to or correction of your details
or if you or your organisation would prefer not to
receive further information on IBM products, please
advise us on: 132 426 (Australia) or 0800 801 800
(New Zealand).

This customer story is based on information

provided by AusRegistry and illustrates how one
organisation uses IBM products. Many factors have
contributed to the results and benefits described.
IBM does not guarantee comparable results
elsewhere.

Designed by the IBM Grafxlab.

GL_10081

Page 22 of 60
 IBM Case Study

IBM
Major retailer
Evaluating inventory strategies

Overview

 Objective:
A retailer with billions in annual sales
had seven distribution centers (DCs)
to serve its stores. The retailer was
growing rapidly through acquisitions
and organic growth. This produced a
hybrid inventory strategy with some
stock-keeping units (SKUs) stored at
all the DCs and others at only a few
centralized locations. The
assignment of SKUs was largely
based on the practices of the
acquired companies. The retailer
wanted to determine whether its
inventory strategy was appropriate
for its business. scenarios were developed for each Best of both inventory strategies
strategy. The retailer was able to Using the centralized strategy, the
 Solution: reallocate nearly 25 percent of its retailer is able to reduce its inventory
The decentralized strategy had SKUs between the two strategies, levels through risk-pooling and more
suppliers drop products at the DCs, with a projected reduction in accurate forecasts. Furthermore, the
while the centralized strategy had transportation and inventory holding larger volume at the central locations
products go to central DCs and then costs of more than U.S.$1.5 million. means more frequent shipments
to other DCs. The latter system from suppliers, which results in lower
resulted in transportation costs of  Benefits: inventory levels. But this strategy incurs
nearly U.S.$5 million a year between • Lower transportation costs additional transportation costs be tween
the central and store-facing DCs. • More accurate inventory analysis central and store-facing DCs, as well as
Using IBM® ILOG Inventory Analyst, • Improved distribution extra handling costs as products have
the inventory planning solution from to flow between DCs and then on to the
LogicTools (now IBM ILOG), stores.

Page 23 of 60

Each inventory strategy was evaluated
with IBM ILOG Inventory Analyst. The
factors modelled included product
costs, inventory holding costs, demand,
forecast error, service levels, supplier
lead times and reliability, receiving
frequency, and transportation times and
costs. A total cost for each SKU was
determined for each strategy, and the
resulting costs compared. This helped
determine which SKUs to assign to each
inventory strategy, and the projected
savings from doing so.
For operational reasons, some product
categories could not use a hybrid
strategy, and an aggregated decision
was made for these categories by
considering all the products in the
Recyclable, please recycle.
Page 24 of 60
group together. Also, sensitivity analysis
was conducted to determine how the
strategy would change if inventory
holding costs were changed.
Benefits
By comparing IBM ILOG Inventory
Analyst’s recommendations with the
current distribution system, the retailer
was able to identify SKUs as candidates
for transition between the centralized
and decentralized inventory strategies.
Nearly 25 percent of the SKUs fell
into this category. By making these
changes, the retailer projected savings
of over U.S.$1.5 million per year, mainly
from reductions in transportation and
inventory holding costs.
Based on extensive analysis of the
results from the IBM ILOG Inventory
Analyst model, the customer was able
to save millions of dollars annually
in distribution costs, as well as
significantly reduce inventory. This
gave the customer more visibility into
the downstream supply chain, thereby
increasing manufacturing flexibility
and further reducing raw material
inventories. In addition, the length of
the cash-flow cycle was reduced by
50 percent through direct shipping to
customers.
Products and services used
Software
IBM® ILOG Inventory Analyst
IBM
®
© Copyright IBM Corporation 2009
IBM Corporation
Software Group
Route 100
Somers, New York 10589
U.S.A.
Produced in the United States of America
December 2009
All Rights Reserved
IBM, the IBM logo, and ibm.com are trademarks
or registered trademarks of International
Business Machines Corporation in the United
States, other countries, or both. If these and other
IBM trademarked terms are marked on their first
occurrence in this information with a trademark
symbol (® or ™), these symbols indicate U.S.
registered or common law trademarks owned by
IBM at the time this information was published.
Such trademarks may also be regis-tered or
common law trademarks in other countries. A
current list of IBM trademarks is available on the
Web at “Copyright and trademark information” at
ibm.com/legal/copytrade.shtml
Other product, company or service names may
be trademarks or service marks of others.
This case study is an example of how one
customer uses IBM products. There is no
guarantee of comparable results.
References in this publication to IBM products
and services do not imply that IBM intends to
make them available in all countries in which IBM
operates.
WSC14123-USEN-01
IBM Global Business Services

Max Bahr Case Study

Supply Chain
Management

“Do-it-yourself” retailer uses IBM solution to automate

replenishment and help ensure high shelf availability
A change in business focus in the stores; 70 percent arrive directly
Overview
Max Bahr Holzhandlung GmbH, a from suppliers. A second warehouse is
pioneer since 1879 in Germany’s scheduled to begin operations this year.
Challenge
highly competitive do-it-yourself (DIY)
Meet customer demand for any of
market, was at a crossroads. After Max Bahr employs approximately 4,500
40,000 products in over 80 outlets with
going through a busy period of opening employees, all of whom are dedicated
low replenishment and storage costs
up new stores during the 1990s, the to one objective: providing superior
DIY retailer wanted to refocus its on-floor consultation and service to
Why become an On Demand business
energy on driving up sales per square every customer, whether layperson or
To help drive up sales per square
meter of existing floor space. That professional. The company strives to
meter of existing floor space, Max
meant ensuring high shelf availability offer premium goods and services at
Bahr needed an approach that would
for every item Max Bahr carries. DIY the lowest possible prices.
provide the highest product availability
stores typically carry few substitutable
levels for customers, while optimizing
products, and customers have a high To help implement its revised business
inventory and storage costs
propensity to buy when they are in the plan, Max Bahr needed an automated,
store. centralized replenishment system that
Solution
could provide the highest customer
IBM Dynamic Inventory Optimization
With revenues of 816 million euros in service levels, while optimizing
Solution, a comprehensive offering
2005, Max Bahr operates more than inventory and storage costs. “We were
that helps companies determine
80 home and garden centers around making replenishment decisions locally
optimal inventory levels based on cost
the Federal Republic of Germany, at each store,” says Anja Schöning,
constraints, forecasts, demand patterns
as well as an e-commerce Web site. project manager at Max Bahr. “Planners
and service level requirements
Its inventory of some 40,000 items, would look at the store’s point-of-
some of which carry the Max Bahr sale (POS) data and manually place
Key Benefits
brand, are sourced globally and cover replenishment orders.” Each store has
- Customer service levels of 99 percent
everything the “do-it-yourselfer” needs a POS system that runs on an IBM
or higher
for the home and garden, including eServerTM iSeries™ server. However,
- Over 90 percent of replenishment
wallpaper, carpets, wood, electrical not all stores had very good and
proposals turn into orders without
equipment, tools, DIY manuals, garden experienced planners — often resulting
any review
furniture and a huge assortment of in poor availability and high opportunity
- Improved demand forecasting, fewer
plants and flowers. A central warehouse costs. Moreover, it was expensive
planners and lower replenishment
replenishes 30 percent of the products employing so many planners.
costs

Page 25 of 60
 Answering the challenge
In 2003, after considering a number
of alternatives, Max Bahr turned to
IBM, which proposed the IBM Dynamic
Inventory Optimization Solution. After
a one-month requirements study, the
IBM team began incorporating the
business rules needed by the solution
to forecast demand, calculate safety
stock, batch sizes and reorder points,
and compute replenishment order
proposals for the entire inventory.
“We wanted IBM to build in as much
business logic as possible, so that
replenishment orders could be sent to
the warehouse and to suppliers without
ever being reviewed by a planner,”
explains Schöning. That required
writing client-specific modules that
considered variables such as maximum
shelf or bin space for an item,
upcoming promotions, supplier lead
times, free shipping on orders above a
certain amount, product assortments
and odd lots.
“The [solution] has become one of
the most important business tools we
have for positively impacting sales
and keeping us competitive.”
— Anja Schöning, project manager,
Max Bahr
“The capabilities and flexibility of
the Dynamic Inventory Optimization
Solution allowed us to respond quickly
and effectively to Max Bahr,” says
Richard Boedi, an IBM researcher on
the team. “Within months of starting
the project, we were managing
inventory at four outlets and with one
major supplier.”
Page 26 of 60
Nightly replenishment runs
Today, the Dynamic Inventory
Optimization Solution performs
eighty to ninety percent of Max Bahr’s
inventory replenishment. There is no
ERP system involved.
Shortly after midnight, the stores
transfer POS data — approximately
15–20 million transactions — to a
central database and add them to a
rolling repository that contains a two-
year history of every product in every
store. Using this transaction dataset,
the Dynamic Inventory Optimization
Solution performs a two-echelon
analysis, looking first at the outlets
and then at the central warehouse
to generate forecasts and order
proposals. Each of the approximate 85
runs of the solution takes around one
minute, constituting up to four million
replenishment decisions. The entire
process is completed by seven o’clock
in the morning, before the planners
arrive at work. Any replenishment
issues found by the solution go on
an exception report to be manually
resolved.
The results from the Max Bahr-IBM
collaboration are impressive. Customer
service levels at the stores have
reached an average of 99 percent or
more. What’s more, over 90 percent of
the order proposals are automatically
turned into actual orders to suppliers
without any review by, what is now,
only a handful of planners in the
company.
“The Dynamic Inventory Optimization
Solution has become one of the most
important business tools we have for
positively impacting sales and keeping
us competitive,” concludes Schöning.
© Copyright IBM Corporation 2006
IBM Global Services
Route 100
Somers, NY 10589
U.S.A.
Printed in the United States of America
12-06
All Rights Reserved
IBM, the IBM logo, eServer and iSeries are
trademarks or registered trademarks of Inter-
national Business Machines Corporation in the
United States, other countries or both.
Other company, product and service names
may be trademarks or service marks of others.
References in this publication to IBM products
or services do not imply that IBM intends to
make them available in all countries in which
IBM operates.
This document is based on information pro-
vided by Max Bahr and illustrates how one
organization uses IBM products. Many factors
have contributed to the results and benefits
described; IBM does not guarantee compa-
rable results elsewhere.
For more information
The IBM Dynamic Inventory Optimization
Solution is part of the IBM Center for
Business Optimization’s solution portfolio,
which includes solutions in the areas of
risk management, marketing investment,
pricing and supply chain management.
The center brings together IBM’s industry
and process expertise, hardware and
business performance software, and the
company’s deep computing and advanced
analytics capabilities to tackle the most
difficult challenges facing business and
government.
To learn more about IBM Global Business
Services, contact your IBM sales
representative, or visit:
ibm.com/bcs
To learn more about the IBM Dynamic
Inventory Optimization Solution and the
IBM Center for Business Optimization,
contact your IBM representative or visit:
ibm.com/services/cbo
BCC00102-USEN-01
 Let’s build a smarter planet

METRO Group tracks meat products from

production to point of sale.

Overview In Germany, there have been several incidences of moldy meat being
sold by different meat wholesalers. Although this had not been a problem
METRO Group
Düsseldorf, Germany for METRO Group, customers were aware of fresh meat problems at
www.metrogroup.de other retailers.
Industry
• Retail Challenge
Products METRO Group’s retail store meat tracking system was entirely manual. Expiration
• IBM Global Business Services date monitoring was done visually, a time-consuming and error-prone process.
• IBM InfoSphere™ With 800 to 1,000 meat trays inside the self-service counter of a single store at
Traceability Server
any given time, METRO Group needed to gain a better grasp of the inventory
management of its meat products, while working to improve customer food safety.

Solution
Working with IBM Global Business Services in a first-of-a-kind project, METRO
Group used IBM InfoSphere™ Traceability Server software as the backbone
of its new meat-tracking solution. Meat trays are tagged with radio frequency

“METRO Group now has
unprecedented transparency
in its in-store meat processes
of the real,- Future Store
identification tags. Each meat tray is visible during its complete in-store life-
cycle, from packaging to point of sale.
Readers throughout the lifecycle of the meat tray continuously update the inventory
management system. Data is stored by the IBM InfoSphere Traceability Server

in Tönisvorst.” software, enabling improved inventory management and helping ensure product

— Dr. Gerd Wolfram, Head of CIO-Office,

and consumer safety. IBM Global Business Services provided process consulting,
METRO AG dashboards and the architecture for the solution, as well as customization.

Benefits
• Improves inventory management with demand-driven forecasting, reducing
overstocks and write-offs

• Increases consumer safety by sending system alerts for expired or nearly

expired products, which can then be removed from inventory

• Is easily scalable and reusable, thanks to standardized interfaces, enabling

METRO Group to deploy track-and-trace solutions in other sales lines as well

Page 27 of 60
 © Copyright IBM Corporation 2009

IBM Corporation
1 New Orchard Road
Armonk, NY 10504
U.S.A.

Produced in the United States of America

November 2009
All Rights Reserved

IBM, the IBM logo, ibm.com, and Smarter Planet are

trademarks of International Business Machines
Corporation, registered in many jurisdictions
worldwide. Other product and service names
might be trademarks of IBM or other companies.
A current list of IBM trademarks is available on the
Web at “Copyright and trademark information” at
ibm.com/legal/copytrade.shtml

The information contained in this documentation

is provided for informational purposes only. While
efforts were made to verify the completeness and
accuracy of the information contained in this docu-
mentation, it is provided “as is” without warranty of
any kind, express or implied. In addition, this infor-
mation is based on IBM’s current product plans and
strategy, which are subject to change by IBM without
notice. IBM shall not be responsible for any dam-
ages arising out of the use of, or otherwise related
to, this documentation or any other documentation.
Nothing contained in this documentation is intended
to, nor shall have the effect of, creating any warran-
ties or representations from IBM (or its suppliers or
licensors), or altering the terms and conditions of the
applicable license agreement governing the use of
IBM software.

This document illustrates how one organization

uses IBM products and services. Many factors
have contributed to the results and benefits
described; IBM does not guarantee comparable
results elsewhere.

References in this publication to IBM products or

services do not imply that IBM intends to make them
available in all countries in which IBM operates.

GBC03030-USEN-00
Page 28 of 60
 Let’s build a smarter planet

Moosejaw Mountaineering reaches

new heights of customer engagement
through social commerce.

Overview

n The Need
To thrive in the highly competitive
market for outdoor adventure
gear, Moosejaw Mountaineering
needed to create a customer
experience that would engage
a customer community whose
appetite for extreme sports is
matched by a hunger for commu-
nication and collaboration.
n The Solution
Moosejaw sought to make its site
the go-to destination for young, hip
high school and college students
and for hard-core outdoor enthusi-
asts by embedding rich community
features into its online commerce
experience, thus becoming one of
the first outdoor-adventure retail-
ers to make multichannel “social
commerce” the cornerstone of its
growth strategy.
Based in Madison Heights, Michigan, Moosejaw Mountaineering, Inc. is one of the nation’s leading
outdoor-adventure retailers. With seven retail locations employing 250 in Michigan and Chicago, the
company’s online retail, Moosejaw.com, was rated a top 50 Web site according to Internet Retailer.
n Key Benefits Online commerce has changed a
• Increased revenue from an lot in the decade since it entered
expected increase in conversion into the cultural mainstream. Driven
rate (based on an initial increase by relentlessly rising customer
to 50 percent) expectations, sites have become
• Expected increase in customer loy- easier to use, merchandising has
alty and word-of-mouth expansion improved and, to put it simply, com-
through a more engaging and col- panies have gotten better at online
laborative online retail experience commerce because they’ve come
• Ability to deliver seamless to understand its many nuances.
messaging, programs and In spite of these changes, however,
customer experience across the essential character of online
all channels retail – namely, the extension of tradi-
• Expected increase in customer tional retail practices to the Internet
satisfaction through richer, more channel – has remained largely
informative pre-purchase support unchanged. So, too, have some basic
(e.g., customer ratings) and long-held assumptions about the
way consumers buy and what they
are looking for from an online retailer.

Page 29 of 60
 Enriching the retail experience with the power of social networking

The traditional view of online transactions is anchored on the idea that online
Business Benefits
stores are first and foremost a venue for transactions, which, by and large, tend
• Increased revenue from an expected to be tightly structured interactions involving the buyer and the retailer. Within
increase in conversion rate (based on
this interaction, the retailer’s key job is to provide customers with the information
an initial increase to 50 percent)
they need to purchase – such as pricing, product descriptions and orderly
• Expected increase in customer loyalty
merchandising – and to deliver all within the context of a superior customer
and word-of-mouth expansion through
a more engaging and collaborative experience. However, the way customers are seeking and processing this infor-
online retail experience mation is beginning to change, and that’s expected to have a big impact on

• Ability to deliver seamless messaging, tomorrow’s online experience.

programs and customer experience
across all channels The biggest reason is the sweeping impact of Web 2.0, a term that describes
• Expected increase in customer a paradigm shift in the way people use the Internet to interact with each other –
satisfaction through richer, more and with information. The key earmark of Web 2.0 is the exploding popularity
informative pre-purchase support
of user generated content, examples of which range from blogs, wikis and
(e.g., customer ratings)
discussion groups to YouTube and MySpace. What each has in common is a
• Stronger brand through a more
decidedly “bottom-up,” approach to generating and sharing information that’s
consistent multi-channel experience
heavy on collaboration and light on hierarchical structures. So how does this
impact online retail? The answer, in large measure, lies in demographics and
changing expectations.

Community meets commerce

“ Our strategy has been to
reinvent the way people
shop for outdoor, surf,
skate and snowboard
apparel and equip-
ment. IBM – through its
technology and retail
thought leadership –
has been instrumental
in helping us realize
this vision.”
– Jeffrey Wolfe, COO,
Moosejaw Mountaineering
When the younger consumers driving the Web 2.0 wave want to buy online,
they’d prefer the same kind of collaborative, bottom-up information exchange
in their shopping experience. This, in effect, resets the goals and parameters
that retailers have to consider in configuring their online strategies. While issues
like merchandising and navigation remain important, retailers also need to
provide an environment that supports the interaction of customer communities,
which are exerting more and more influence on buying behavior. This is espe-
cially true for products that reflect a lifestyle or a set of emotional values. That’s
why Moosejaw Mountaineering (www.moosejaw.com), a fast-growing retailer
specializing in outdoor, surf, skate and snowboard equipment and apparel, is
such a good example of how it can work. Relying on a host of retail solutions
from IBM and IBM Business Partner CrossView, Moosejaw sought to make its
site the go-to destination for young, hip high school and college students and
for hard-core outdoor enthusiasts by embedding rich community features into
its online commerce experience, thus becoming one of the first retailers to make
“multi-channel, social commerce” the cornerstone of its growth strategy.
Now a fast-growing chain with seven stores and 250 employees, Moosejaw
owes much of its success to a fiercely loyal customer base. The roots of this
loyalty lay in the company’s ability to make shopping fun, as well as its abil-
ity to provide the right product mix, strong product and technical support and

Page 30 of 60 2
a constant drive to develop unique, innovative ways to communicate with
Solution Components
their customer. But with no shortage of competitors in the “outdoor adventure”
space – many large and well known – Moosejaw faces the ongoing challenge of Software

making itself the destination of choice. Rising to this challenge, the company • IBM WebSphere Commerce
has introduced a steady stream of features that have resonated with custom- • IBM WebSphere Remote Server
ers, including over 50,000 customer reviews, texting of tracking numbers and
• IBM DB2
promotions to mobile phones, and its Moosejaw Madness community, where
Hardware
customers post photos from their latest adventures, read the irreverent Daily
Remark and immerse themselves in Moosejaw’s unique culture. While features • IBM SurePOSTM 500 Express

like these have been highly successful, Chief Operating Officer Jeffrey Wolfe Services
believes that Moosejaw has only scratched the surface of what it can do for its • IBM Toronto Software Lab
customers. “We are on the verge of truly blurring the lines between Web, retail,
• IBM Global Technology Services
mobile, catalog, call center and kiosk, taking the best of each channel and
• IBM Retail Store Solutions
making it possible across all channels.”
IBM Business Partner

Moosejaw’s approach to multi-channel, social commerce was to implement a • CrossView

new solution from the ground up with help from IBM and IBM Business Partner Timeframe
CrossView. One of the key benefits of the solution is its ability to create a seam-
• Core platform implementation: 9 months
less, interactive, community shopping experience across every sales channel.
• Social commerce platform: 5 months
Customers can interact with Moosejaw staff and with other customers on the
Moosejaw Web site and then connect those threads on their mobile phones
and when they come into the Moosejaw retail stores. Perhaps more valuably, it
provides Moosejaw with a ready-made platform for integrating these social net-
working capabilities deeply into its commerce platform. Imagine, for example,
a customer looking for a tent suitable to use at 20,000 feet and 20 below zero.
Instead of simply searching through a catalog, customers can now search by What Makes it Smarter
a product’s rating, while also taking into account customer profiles that include
Moosejaw Mountaineering is making
product usage experience. Getting product feedback from someone who has itself one of the leading places to be for
actually used that tent on Mount Everest or K2 is a far cry from standard catalog outdoor adventurers by leading the way
information – and that’s exactly what Moosejaw is shooting for. Key to the realiza- in the integration of social networking
capabilities like blogging, group discus-
tion of this vision is the company’s work with IBM Toronto Software Lab, which is
sion and customer product ratings across
working with Moosejaw to develop this breakthrough capability. all of its retail channels.

Moosejaw’s physical stores also figure prominently in its strategy. A standout

feature of the new solution is its ability to provide truly seamless support to –
and thus create a common, superior experience through – all of Moosejaw’s
channels. Key to this capability is CrossView’s Point of Sale solution which
extends the capabilities of IBM WebSphere® Commerce into retail stores with
a solution that utilizes WebSphere Commerce as its engine at the enterprise
and IBM WebSphere Remote Server in the stores. CrossView’s solution utilizes
a common information platform based on IBM DB2® and validated for the
IBM Retail Integration Framework, making it easy for Moosejaw to extend its

Page 31 of 60 3
 online channel programs and tactics into its store environment. For instance,
using IBM SurePOS 500 dual-screen point-of-sale terminals in-store customers
are now able to buy, ship and pay with the exact same services they are familiar
with online, and they will be offered the same targeted promotions and cross-
sells while they read reviews, blogs and recommendations. With all this new
© Copyright IBM Corporation 2009
technology, that same fun and irreverence that has been a part of the Moosejaw
IBM Corporation
culture from the beginning will now be part of the in-store check-out process.
1 New Orchard Road
Armonk, NY 10504
U.S.A
Multichannel benefits
Produced in the United States of America
To enable a consistent shopping experience for customers across channels,
September 2009
the Moosejaw solution integrates and registers orders and inventory changes All Rights Reserved

for every channel, offering increased visibility and optimum resource alloca- IBM, the IBM logo, ibm.com, Smarter Planet,
DB2, SurePOS and WebSphere are trademarks
tion across channels. The multichannel capability also provides Moosejaw’s
of International Business Machines Corporation,
in-store sales associates and call center agents with the tools they need registered in many jurisdictions worldwide.
Other product and service names might be
to provide more interactive and insightful support to customers. It’s seen in
trademarks of IBM or other companies. A current
the small things, like being able to tell a customer how close they are to a list of IBM trademarks is available on the Web
at www.ibm.com/legal/copytrade.shtml
reward point threshold or asking about their satisfaction with a recent pur-
This case study illustrates how one IBM customer
chase. But it’s also seen in the bigger things, like the system’s ability to see
uses IBM products. There is no guarantee of
inventory in near real time so an associate can find just the right Patagonia comparable results.

coat for a customer – whether it’s in the store, in the warehouse or at a supplier’s
warehouse – and send the order via XML straight to the other shop, warehouse
or supplier for processing and fulfillment. It’s seen in the way it enables call
References in this publication to IBM products
or services do not imply that IBM intends to
make them available in all countries in which
IBM operates.

center agents to get a full profile of a customer and provide the most knowl-
edgeable and comprehensive support.

Altogether, it’s about providing the kind of customer experience that will
continue to make Moosejaw the premier destination for the outdoor, surf,
skate and snowboard community and in the process enable Moosejaw to
sustain its high rate of growth. Wolfe sees the company’s advanced social
commerce capabilities playing an important role by strengthening loyalty,
increasing the conversion, or “browse-to-buy,” rate of the Moosejaw site and
by building word-of-mouth support, which thus far has been one of the biggest
factors in its growth. “Our strategy has been to reinvent the way people shop
for outdoor, surf, skate and snowboard apparel and equipment,” says Wolfe.
“IBM – through its technology and retail thought leadership – has been instru-
mental in helping us realize this vision.”

For more information

Please contact your IBM sales representative or IBM Business Partner.

Visit us at:

ibm.com/retail

ODC03073-USEN-02

Page 32 of 60
 IBM Case Study

Sears Canada increases code reuse by

5%-15% with SOA solution

Overview

■ Challenge
Deliver on business objectives
and reduce development cost
through code reuse to eliminate
coding and recoding of the
same integration, and speed the
exchange of information with
business partners to improve
business agility to be competi-
tive in today’s economy
■ Solution
Supplier information exchange
A successful retailer needs to change “ Already, Sears Canada
quickly to keep pace with shifting cus-
service enabling exchange of can clearly see the
tomer tastes. For Sears Canada, this
product information between
has meant improving the agility of its
ROI advantages of our
Sears Canada’s legacy systems
supply chain. IBM SOA solution.”
and 3,000 suppliers
— Miki E. Uhlyarik, Middleware
■ Benefits
Sears Canada is a retail powerhouse and Integration Architect, Sears
— 5%-15% reuse of code, low- Canada
with a strong heritage in large
ering costs and improving
brick-and-mortar stores and a compre-
developer productivity
hensive product catalog with associ-
— Faster deployment of prod-
ated merchandise pick-up locations.
ucts and services
The company operates 196 company-
— Improved customer,
owned stores, 178 dealer stores,
dealer, supplier and partner
64 home improvement showrooms
experience
and 1,850 catalog merchandise pick-up
locations.

Today, the company partners with

about 3,000 suppliers to makes sure all
of its sales channels—stores, catalog
and online—are fully stocked with the
right mix of products that consumers
want at the right price.

Page 33 of 60
 Streamlining business and IT processes
From the business side, Sears Canada needs to streamline its internal processes
to achieve faster time to market even as it reduces the cost of bringing new mer-
chandise to its customers. From the IT side, it needs to streamline development
and integration to enable it to exchange data with its suppliers more efficiently
and expeditiously.

The IT infrastructure team, led by Middleware and Integration Architect Miki E.

Uhlyarik, has the responsibility of integrating new functionality with the company’s
legacy systems, which still run a very large part of the business and act as the
main repository of corporate data. Sears Canada faced a major challenge in imple-
menting changes quickly enough in its legacy development processes to keep up
with the fast pace of business change.

“We faced point-to-point, fairly rigid connections,” says Uhlyarik. “We couldn’t very
easily replace components. What’s more, any change to one component had to be
made in all the other components.”

After researching service oriented architecture (SOA), the team recognized it as a

valuable concept that they could apply. “SOA offered us a framework both on the
conceptual and on the technical level that could help us overcome issues related to
the integration of internal and external business systems,” says Uhlyarik.

Uhlyarik’s team anticipated that SOA would enable code reuse to eliminate coding
and recoding of the same integration; reduce development costs over the long
term; and speed the exchange of information with business partners to improve
business agility.

Investing in SOA skills and infrastructure

Starting essentially from scratch, the infrastructure team realized it had to
prepare before it could begin employing an SOA approach to coding services or
building applications.

The team established an SOA Center of Excellence (CoE) and began publicizing it.
The CoE initially functioned as an SOA information, education and training clearing-
house. The company leveraged its more than 30-year partnership with IBM to raise
its CoE’s understanding of SOA and begin orienting people in the new approach.

Sears Canada also initiated IBM training programs to close the skills gap that fre-
quently hinders SOA projects, especially in the early stages. The IBM training
addressed SOA concepts, Web services, XML and security. The team even began
educating management long before a single service had been developed. “We
found that we needed support from IT management because SOA required a major
investment before the actual applications could be put in place,” says Uhlyarik.
Page 34 of 60
 The company installed IBM System p® servers running AIX® to host
Solution Components
IBM WebSphere® Application Server as the core component of the application
foundation based on Smart SOA. IBM WebSphere Application Server provides an Servers

innovative, performance-based application foundation for building, deploying, and ● IBM System p®
managing robust, agile, and reusable services and SOA applications of all types. Software
The production environment is configured for high availability. In addition, Sears
● IBM AIX®
Canada set up separate server environments for staging and for development. The
company also acquired IBM WebSphere Enterprise Service Bus, which it imple-
● IBM WebSphere® Application Server

mented right away, and WebSphere Service Registry and Repository. ● IBM WebSphere Enterprise
Service Bus

Exchanging data with suppliers in just a few clicks ● IBM WebSphere Service Registry
The company’s initial implementation focused on a simple system integration bus and Repository

intended to streamline integration. For that, it created a Web services gateway,

mediation flows and JAX-RPC to implement common infrastructure components
that Web services-based applications would need. Then the team went looking for
an application requiring deeper-level integration and a higher level of reuse. This
project would be the pilot implementation of WebSphere Enterprise Service Bus.

The company needed to exchange product data between its 3,000 suppliers
and its internal database and IBM CICS® systems. The exchange of this
product information—sizes, colors and various other product attributes—is essen-
tial to getting products in front of Sears’ customers in a timely way. Until the infor-
mation is in the system, Sears has no way to market and sell the product through
any of its channels.

Uhlyarik’s team chose to pilot SOA by creating a supplier information exchange

service. Initially the team would test the service with one vendor. After that, the plan
was to roll it out to all vendors. “It will save a great deal of time spent retyping and
scanning the data each time it is updated. And with 3,000 suppliers, just think of
the potential time savings,” notes Uhlyarik.

Following an initial proof-of-concept, the ESB team can now make the supplier
information exchange service available for other suppliers with just a few clicks,
while the custom developers continue to create more custom point-to-point con-
nections. WebSphere ESB converts messages as needed to maintain the flow of
information through the system.

The savings will grow dramatically with each supplier joining the system. “We have
to look ahead two or three years to see the payback,” says Uhlyarik. “But already,
Sears Canada can clearly see the ROI advantages of our IBM SOA solution.”

Page 35 of 60
 5%-15% increase in code reuse © Copyright IBM Corporation 2009
IBM Corporation
Every IT initiative at Sears Canada must be based on a clear business case with a
Software Group
positive payback. In the case of vendor data exchange, the infrastructure team Route 100
Somers, NY 10589
estimated 5%-15% of code was suitable for reuse and calculated that the effort
U.S.A.
would deliver an attractive payback even at a seemingly low 5% level of reuse. Produced in the United States of America
April 2009
All Rights Reserved
In addition to hard-dollar savings realized through code reuse, the benefits Sears
IBM, the IBM logo, ibm.com, AIX, CICS,
Canada expects to receive from its SOA investment include: System p and WebSphere are trademarks or
registered trademarks of International Business
Machines Corporation in the United States,
● Greater flexibility, responsiveness and efficiency other countries, or both. If these and other
● Faster deployment of products and services IBM trademarked terms are marked on their
first occurrence in this information with a
● Improved customer, dealer, supplier and partner experience trademark symbol (® or TM), these symbols
● Improved developer productivity indicate U.S. registered or common law
trademarks owned by IBM at the time this
● More reliable code and fewer support problems information was published. Such trademarks
● More efficient maintenance may also be registered or common law
trademarks in other countries. A current list of
IBM trademarks is available on the Web at
The most prominent sign of the success of the Sears Canada SOA initiative, how- “Copyright and trademark information” at
ibm.com/legal/copytrade.shtml.
ever, can be seen in the response of senior IT and business management to the
Other product, company or service names may
effort. “Our 2009 plan with SOA was approved at the executive level. The plan has be trademarks or service marks of others.

made it through a very rigorous analysis where a lot of projects just fell by the way- This case study is an example of how one
customer uses IBM products. There is no
side,” Uhlyarik concludes. That represents success by any measure. guarantee of comparable results.
References in this publication to IBM products
and services do not imply that IBM intends to
For more information
make them available in all countries in which
Contact your IBM sales representative or IBM Business Partner. Visit us at: IBM operates.

● ibm.com/soa
● ibm.com/websphere

For more information on Sears Canada, visit: www.sears.ca

WSC14089-USEN-00

Page 36 of 60
 Case Study Quickview

South American retailer improves productivity by delivering

information to the point of sale using IBM WebSphere Portal

Retailer deploys IBM WebSphere Portal Enable and IBM Lotus Workplace
Overview
Web Content Management to enable an enterprise-wide sales
South American Retailer
information portal, dramatically improving productivity and information
Industry access while eliminating millions of printed pages annually.
• Retail

Employees Challenge
• 16,000 The IT infrastructure at a major South American retailer could not support
reliable distribution of information to employees within the timeframes required to
Products
support sales. The company was losing business because salespersons could
• IBM® WebSphere® Portal
not provide detailed product information to customers. Additionally, the process
Enable
for communicating new product lines and weekend offer information was highly
• IBM Lotus® Workplace Web
inefficient, and the company lacked a central repository for the information.
Content Management
• Linux® By improving its communications systems to provide seamless information delivery
from headquarters to the sales floor, the retailer could deliver immediate, accurate
information to each salesperson in order to answer any and all product questions a
customer might have.

Solution
The company chose a portal solution comprised of IBM WebSphere Portal Enable
and IBM Lotus Workplace Web Content Management running on the Linux
operating system. These tools have enabled the company to deploy an intranet
product and sales information portal across the enterprise. With Lotus Workplace
Web Content Management, information is easily managed and updated from back-
end systems at the company’s headquarters and accessed via Linux desktops and
thin clients in each store.

The Web site provides updated content regarding every pertinent aspect of sales.
With 10 to 20 terminals in each retail location, every salesperson now has convenient
access to product details and information on sales and promotions.

Page 37 of 60
 Benefits © Copyright IBM Corporation 2009

• The new system reduces unnecessary workload and improves productivity IBM Corporation
Software Group
across the company because all salespeople now have complete and immediate
Route 100
access to the information needed to make a sale Somers, NY 10589
U.S.A.
• The company has realized a massive reduction in printing costs, eliminating Produced in the United States of America
approximately 180,000 printouts per weekend and over 10 million printouts June 2009
All Rights Reserved
annually
IBM, the IBM logo, ibm.com, Lotus and WebSphere
• The company can immediately respond to competitor promotions by store area are trademarks of International Business Machines
Corporation, registered in many jurisdictions worldwide.
with a competitive initiative and easily distribute the right information to affected
A current list of IBM trademarks is available on the Web
employees at “Copyright and trademark information” at ibm.com/
legal/copytrade.shtml.

Linux is a registered trademark of Linus Torvalds in the

United States, other countries, or both.

Other company, product or service names may be

trademarks or service marks of others.

The information contained in this documentation is

provided for informational purposes only. While efforts
were made to verify the completeness and accuracy
of the information contained in this documentation, it is
provided “as is” without warranty of any kind, express
or implied. In addition, this information is based on
IBM’s current product plans and strategy, which are
subject to change by IBM without notice. IBM shall
not be responsible for any damages arising out of the
use of, or otherwise related to, this documentation or
any other documentation. Nothing contained in this
documentation is intended to, nor shall have the effect
of, creating any warranties or representations from
IBM (or its suppliers or licensors), or altering the terms
and conditions of the applicable license agreement
governing the use of IBM software.

LOC14125-USEN-00

Page 38 of 60
 Service Oriented Architecture
DeepView case study
October 2008

Australian retailer focuses on

business processes as the entry point
to service-oriented computing.
Spotlight turns around IT with business process-based SOA

Page 39 of 60
 Australian retailer focuses on business processes as
the entry point to service-oriented computing.
Page 2
Contents
3 The challenge: an IT
infrastructure at risk of
imminent failure
4 The strategy for change:
start with understanding the
business processes
6 Developing a roadmap for
implementation
7 Integrating legacy and new
systems with a services-based
approach
7 Selecting the right tools for
end-to-end process control
10 Where is Spotlight today?
11 Taking the transformation to
the next level
13 Lesson learned: bring in the
right help at the right time
14 The final analysis: it begins
and ends with process
management
Page 40 of 60
Introduction
Founded in 1973 by two brothers, Spotlight Proprietary Limited is a privately
owned crafts and soft furnishings retailer based in Australia, with 106 stores
located across Australia, New Zealand, Singapore and Hong Kong. In addition,
it has 12 Anaconda superstores in Australia, selling outdoor adventure goods,
clothes and equipment.
Spotlight is a very large business, with more than 6,000 employees. Stores
and catalogs generate approximately one million sales transactions a day, with
annual sales approaching A$1B in 2008. The product mix is highly seasonal
and rotates quickly throughout the year. At any one time, some 250,000 out
of 500,000 SKUs are active. A mission-critical loyalty program is another
measure of Spotlight’s success, with five million registered customers.
Anne McDiarmid is the Chief Information Officer for Spotlight Proprietary
Limited. Her responsibility is to provide the technology to support both the
Spotlight and Anaconda brands, plus provision back-office IT. When she
arrived at Spotlight, IT was at a breaking point.
In this DeepView, Ms. McDiarmid discusses how she and KAZ Group, an IBM
Business Partner, introduced process- and service-based computing to support
the Spotlight business. KAZ Group, located in Australia, focuses predomi-
nantly on applications development and systems integration.
 Australian retailer focuses on business processes as
the entry point to service-oriented computing.
Page 3

The challenge: an IT infrastructure at risk of imminent failure

Solution components
When I joined Spotlight in late 2006, the company had enjoyed 35 years of
highly successful retailing and continual growth. As a result, Spotlight was
Software
heavily invested in property — the bricks-and-mortar side of the business.
• IBM WebSphere® Process Server

• IBM WebSphere Commerce Server
• IBM WebSphere Portal
However, the company had only made information technology an investment
priority for the previous seven or so years — and that was without sufficient stra-
tegic dimension or vision. For example, the point-of-sale (POS) system had only
been in our stores for some seven years—and even it was 10 releases behind the
current version. We also had several homegrown legacy systems, plus one com-
mercial financial package that had been hacked beyond recognition. It might
originally have been “out‑of‑the‑box,” but this was now impossible to tell. And
we had middleware connecting to middleware (Figure 1).

Insufficient investment in IT infra-

Process
6
structure had left Spotlight without Suppliers
Spotlight
a way to provide the business www Purchases
of
Goods
Receipts Legacy
Process
3 Applications
with accurate sales, product or
Sales
and Stage
Direct
price information. Purchase
LayBys
Warehouse Product/
Supply Finance
Process
2 VIP Price/ &
Stock
Promo
Goods Receipt Process
1
Merchandising, Marketing, Finance

Process
5
Process
4

Product,
Price,
Promos,
Store
Info
(PPP)

Figure 1. Before the start of its IT transformation initiatives, Spotlight’s infrastructure had not kept pace
with the needs of the rapidly growing retail operations.

We had no parallel processing. Everything was performed overnight,

sequentially. Even basic sales information was lacking, or so out of date as
to be largely worthless. Instead of daily sales summaries, we were waiting
until Thursday each following week to find out the previous week’s sales.
And, depending on where you went, you could get a different version of what
sales were.

Page 41 of 60
 Australian retailer focuses on business processes as
the entry point to service-oriented computing.
Page 4
Highlights
The retailer’s continued growth
resulted in new stores, which put
more stress on already overloaded
legacy systems.
With the in-house IT team spending
most of its resources fighting fires,
Spotlight looked to IBM Business
Partner KAZ Group for assistance
in addressing the IT shortcomings.
Page 42 of 60
To make matters worse, we could not guarantee product and price. We could
not tell you what inventory was in the business, nor did we have any means of
knowing what we had sold. Instead, we had a simple “system” that replenished
what we sold — whether it was old stock or new stock. Furthermore, we did not
run on traditional min-maxes. We had no visibility across the chain of how
our product sales were being achieved in terms of growth.
What we had, therefore, was a failure in terms of delivery to our stores, and
therefore to our customers. Yet we continued to be highly successful. We kept
adding stores. Unfortunately, that meant we kept adding load to our already-
stressed legacy systems. We had failures in products and pricing every day, just
basically because we had no message queuing or even automatic restart capa-
bility. In short, the business may have been growing, but the IT infrastructure
was simply not keeping up.
The strategy for change: start with understanding the business processes
From soon after my appointment, it was clear that my priority was to address
these shortcomings. The imperative had become finding an escape from what
all too easily might become a business threatening trap. Once I understood the
scale of the issues we were facing and the resources I had to work with, I real-
ized we needed additional help.
Spotlight had a team of about 55 IT professionals who had been working with-
out the benefit of defined processes or basic disciplines. They were willing and
conscientious in terms of supporting our customers in the business. But most
of their time was spent fighting fires.
KAZ Group, under Senior Solution Architect Vicki Redwood’s leadership,
brought in a team of analysts to help us develop a strategy for building an
IT infrastructure that could support our business and enable continued
growth. The KAZ team took us back to square one — understanding our
business processes.
 Australian retailer focuses on business processes as
the entry point to service-oriented computing.
Page 5

We call this effort the “process flow saga,” because it took three long months
Highlights
to arrive at accurate diagrams of what our systems did and what our process
flows were (Figure 2). At the time, this process flow analysis seemed endless.
From talking with other organizations, we now know that our experience was
neither unique nor all that lengthy. But at the time, it felt like we were not
Before Spotlight could transform
making much overt progress.
its IT operations, it needed to
understand the business processes
IT supports. PRODUCT
MASTER
PLU Ref. Data
(warehouse lines)
Eagle Warehouse Shipping
Shipment Costs dept.
IETL190
PRONTO Shipment Rece

Raven Virtual Shipment

Walka (NZ)
Sub Dept Sales
Purchases & Interstores
Keyed Store Credit Claims
Receipts (Whouse & Supplier)

CREDIT
terstore IETL251 CLAIMS
ansfers
Head Office ???
Eagle
???

IETL 250 IETL280

CREDIT
CLAIMS ???
On Hand,
rder Status Hornbill

STOCK CREDIT
RECEIPTS CLAIMS
Claims
Cockatoo
Store claim
approvals
An end-to-end process mapping Store CLAIM
REPORTING via
SQL reporting
helped the IT team see how applica-
Adjustments

Buyers
Count

IETL 350
STOCKTAKE
tions and data related to the needs MASTER
Client PC PD
STAG
of the business. PLU COUNTS
BC

Figure 2. Spotlight’s IT transformation began with a detailed mapping of the processes behind the
retailer’s core business.

Nevertheless, this represented a watershed for many on my team. Until we went

through this exercise, they did not understand how, by tweaking this or adding
that, they had all too effectively inhibited the use of what IT and applications
we did have.

Page 43 of 60
 Australian retailer focuses on business processes as
the entry point to service-oriented computing.
Page 6
Highlights
The next step was to identify
which legacy systems to retain
and which to retire — and to
develop a phased implementation
plan that would support ongoing
business operations.
Page 44 of 60
Another eye-opener for us all was the process mapping. Spotlight is a retailer.
We buy and we sell. Everything is about products and price. It should be
simple, but in many cases it is not. So what we focused on was the end-to-end
process for a sales transaction: How did we buy a product and receive it into
stock? How did we move a product from stock to the store? How did we record
the sale and capture the transaction data in our systems? Where did the sales
data end up in the legacy systems?
At the end of the “saga,” the IT team understood what the business was about.
And once we understood how many different versions of the truth we had in
circulation, we could begin to rationalize.
Developing a roadmap for implementation
Once we thoroughly understood our “as is” situation — from both a business
process and a technology perspective — it was time to change. We needed a
roadmap to new, replacement, systems while keeping the old systems going. At
the same time, we were plagued with systems instability. Our legacy systems
were failing. In order to keep the business running, we just hoped we had the
time to make replacements before something irrevocably broke.
We had to identify priorities — what we could live with for the long term, and
what needed addressing sooner. We also needed the control to selectively turn
off some parts while leaving others on. That meant thinking about how we
might run some elements in parallel, at least until the new parts were proven.
For example, we decided early on that we had to replace our point-of-sale
system immediately in one country. Yet this could not happen overnight;
it had to occur gradually over some six months. We also decided to add enter-
prise resource planning (ERP) capability, so we chose both a new point‑of‑sale
system and SAP Retail for ERP.
 Australian retailer focuses on business processes as
the entry point to service-oriented computing.
Page 7
Highlights
Spotlight began to look at applica-
tions in terms of the business
functions they performed, which
were defined as services.
Introducing a services layer
enabled Spotlight to integrate
business functions in new ways
and readily add new capabilities.
The one missing component was a
way to control business processes
end-to-end.
Page 45 of 60
Integrating legacy and new systems with a services-based approach
We decided, with KAZ’s encouragement, to break the old systems into what
we now refer to as services, or small components. The advantage was that the
business could understand what each part was doing and then could choose
when to turn on (or off) selected business functionality.
This also enabled us to combine parts (services) that previously could not
have been combined, as well as introduce new services and functions that
could work with old ones. For example, we could create a mixture of old point-
of-sale and new point-of-sale systems feeding old and new applications — all of
which was automatically achieved by putting the service layer in between.
Even with this phase completed, and with a rationalization of the middleware
that connected everything, we still needed end‑to‑end control. Our architec-
tural solution, suggested by KAZ, was to add a process service layer on top so
that we would apply automated coordination and control from start to finish.
A further benefit of this was that we were then able to introduce a degree of
parallel processing without having to change the old systems. The important
aspect to remember, however, is that this process service layer could only work
because we were breaking functions up into services and placing the service
architecture at the center.
Selecting the right tools for end-to-end process control
The next question we addressed was tool selection. As a dynamic retail
business with continuous events, we could not afford any loss of business
capability. We could not contemplate turning off the point-of-sale system for
a week to install a new one, nor could we shut down the business for three
weeks to introduce ERP. We needed to migrate slowly across different stores in
different locations, from legacy to new, and perform this seamlessly so there
would be no significant impact on the business. These were the most critical
factors for us.
 Australian retailer focuses on business processes as
the entry point to service-oriented computing.
Page 8

With this in mind, Vicki’s team proposed IBM WebSphere® Process Server.
Highlights
The attraction was that it provides the basis for end‑to‑end control over at
least five disparate systems. With one process control point, we could see and
The company selected IBM manage everything, from goods going to the store through to sales being
WebSphere Process Server recognized in the head office (Figure 3).
to provide a single process
control point over multiple
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EDH XML
data MQ JDBC Import
JMS
6eea^XVi^dc changed
>cXdb^c\ >ckZcidgn data
MQ 6eea^XVi^dc
XML
data EgdXZhhZh JMS

XML
data
=dbZ
D[[^XZ
HidgZhdaYhnhiZb Multiple
WebSphere 6eea^XVi^dc
Web MQ
queues
(one
per
store)
6eea^XVi^dchZgkZg

service
DaYEDH Dji\d^c\
JMS
EgdXZhhZh
hZgkaZi

6eea^XVi^dc XML
Web
service
data

EgdXZhh8dcigda
Ldg`[adl

The process control layer

coordinates business events
across five applications, handling
errors and generating alerts.
Figure 3. WebSphere Process Server provides a central point of control over business events while
integrating the flow of business processes across multiple applications.
WebSphere Process Server is now being used as our virtual process control.
It coordinates business events across our five main applications as well as
performing error handling and generating alerts. Now we can see what is hap-
pening, which is good. Yet we also discovered we could see errors that we did
not even know were occurring. Nevertheless, we now have consistent process
flows and process monitoring across many asynchronous steps, which are
being performed in a mix of old and new applications.

Page 46 of 60
 Australian retailer focuses on business processes as
the entry point to service-oriented computing.
Page 9

This is a huge improvement. Before, we looked like a monolithic IT shop with

Highlights
the business having minimal control and no responsibility. Now the business
has information and must take responsibility. It is a fundamental change that
has been achieved by using services and process management. The business
and IT work more closely together than ever before.

A common set of definitions —
developed during the business
process analysis phase — helps
ensure that business and IT speak
the same language.
Part of what has helped here is a set of common definitions that work for
both business and IT (Figure 4). While it may seem a statement of the
obvious, having a common understanding of what constitutes a sale or a
trend or a product is critical. Now, when business and IT people talk, we
know we are talking about the same thing. That has already proved to be
an incredible winning situation for the business and for my developers, and
we consider it to be a best practice for any services-based transformation.

9ViV

6jY^iAd\ IgVchVXi^dc
Audit
details
logged Details
logged
at
during
or
before the
completion
a
POS
transaction of
the
POS
transaction

=ZVYZg Kd^Y 8jhidbZg AVn7n >iZbh 8ZaaVgH]VgZh

Transaction Voided
Transaction Customer Layby
details Repeating
group Details
of
Cellar
Header
details details details recorded
during that
contains Shares
identified
the
transaction multiple
Item
during
the
elements
within transaction
the
transaction

KdjX]Zgh >hhjZY GZYZZbZY IZcYZg^c\ <E:migVh ;ddiZg

Repeating
group
GV^c8]ZX` GV^c8]ZX`h Transaction General
Payments Transaction
that
contains Details
of
Rain
Check Details
of Tendering details
collected Footer
details
details
of
Vouchers issued
during Rain
Check(s) details during
the
payment
issued
during the
transaction redeemed
during transaction
the
transaction the
transaction

Figure 4. Business and IT agreed on a set of definitions that provides a common vocabulary for
describing business functions.

Page 47 of 60
 Australian retailer focuses on business processes as
the entry point to service-oriented computing.
Page 10

Where is Spotlight today?

Highlights At the time of this writing, we have made incredible inroads into reshaping
how Spotlight delivers and exploits IT. We are 20 months into our transfor-
mation, and we are about one-third of the way through our plan. We have
implemented WebSphere Process Server — it is live and running. We are in
the final stages of testing SAP for Retail, and that will shortly be going live
(Figure 5).

A phased rollout of new POS

Process
6
systems to stores was implemented Hjeea^Zgh
Spotlight
in parallel with bringing a new ERP
www Purchases
of
Goods
Receipts Legacy
Process
3 Applications
solution online. Sales
and
Direct Stage
LayBys
Warehouse Purchase
Product/ Finance
Supply Process
2 VIP Price/ &
Stock
Promo
<ddYhGZXZ^ei Process
1

;^cVcXZ

Process
5
Process
4

Product,
Price,

Promos,
Store

Info
(PPP) BZgX]VcY^h^c\!BVg`Zi^c\

PPP
from
SAP
PPP to
old
systems
WebSphere
Process
Server

BF SAP Master
Data
Sales
&
LayBys

Stock/Store
Orders
Product,
Price,
Promos Retail Inventory
Stock/Store
Orders
ASN,
Invoices,
IgVchedgi Goods,
Tracking
8dbeVc^Zh ASN,
Invoices,
Goods

SAP
in
Store
-
Purchasing,
Receiving
and
Inventory
Control

Figure 5. This diagram illustrates the progress of Spotlight’s IT transformation at the time of this writing.

Page 48 of 60
 Australian retailer focuses on business processes as
the entry point to service-oriented computing.
Page 11

Already we are more than halfway through introducing the new point-of-sale
Highlights
systems. We have about 120 stores to do over a four-month period, at a rate of
about 8–10 per week. Now that we have the installation process refined, these
are going in smoothly. In the interim before SAP goes live, they are fed by the
services at the front end of our legacy systems.

Using the services-based approach, we are already combining product

hierarchies across the new SAP system and the legacy systems. Similarly, we
have started to create orders on the new ERP system regardless of whether
they point to the new point‑of‑sale or old point‑of‑sale system. To us these are
all enormous wins.

The services-based approach The feedback from stores has been amazing. I received yet another e-mail
enabled Spotlight to combine data recently saying how much a staff member likes the new system — not least
across the new and old point-of-
because it enables her to support her customers much better. Furthermore, the
sale systems, legacy applications
rollout has not impeded our catalog business and its related sales.
and the new SAP system.

Taking the transformation to the next level

Next on our agenda is a retooling of our Web site. We have selected IBM
WebSphere Commerce Server to be our new Web store. After that there are
additional systems we will update, change or reuse (Figure 6). But thanks
to the services approach and the way that WebSphere Process Server can be
used, we have a flexibility of choice. This is highly attractive, especially now
that we have mapped our processes and understand our data.

Page 49 of 60
 Australian retailer focuses on business processes as
the entry point to service-oriented computing.
Page 12

Highlights ;^cVcXZ
WebSphere
WebSphere
Commerce
Portal
eStores
Inventory
Availability SAP
All
Sales (ATP)
-
SAP Processes BZgX]VcY^h^c\!BVg`Zi^c\
and
Transport
BF
PPP WebSphere
Process
Server

BF SAP Master
Data
Sales
&
LayBys

Stock/Store
Orders
Product,
Price,
Promos Retail Inventory
Stock/Store
Orders
ASN,
Invoices,
IgVchedgi Goods,
Tracking
8dbeVc^Zh ASN,
Invoices,
Goods

SAP
in
Store
-
Purchasing,
Receiving
and
Inventory
Control

Figure 6. Future plans call for implementing a new infrastructure for Web retailing and a
portal-based intranet.

The next steps in Spotlight’s IT
transformation will be to retool
the Web site and implement an
employee portal.
We also plan to implement IBM WebSphere Portal as our new internal com-
munications mechanism. With 6,000 employees, some of them short-term
or even temporary contractors, effective communications and easy access to
training materials are additional business imperatives. The portal will allow
us to do training locally, at the store level, while ensuring consistency by
keeping documentation updated and available centrally.

WebSphere Portal also offers us the option for expanding our marketing
initiatives on the Web. With five million registered members in our loyalty
program, we see tremendous potential in using WebSphere Portal to create a
powerful social networking community with our customers.

Page 50 of 60
 Australian retailer focuses on business processes as
the entry point to service-oriented computing.
Page 13
Highlights
The knowledge and resources
provided by KAZ — plus that
team’s objective point of view —
were critical to the success of
the project.
With the new skills they acquired,
Spotlight’s IT staff is now focused
on understanding and meeting the
needs of the business.
Page 51 of 60
Lesson learned: bring in the right help at the right time
The single most important lesson I have learned from what we went through
is that you should never underestimate the size of the task. Spotlight needed
help to achieve what we have done. We needed the KAZ team to come in and
show us what was in front of us and to have that extra level of knowledge and
experience that our IT team, however well motivated, simply lacked.
If we had tried to do everything ourselves we would have been slower and
more error prone, as well as less imaginative. One does not always have
objective thinking when one is on the inside. For us this lesson learned is
all about finding the best people to help understand the business together
and then to achieve a gradual skills transfer.
The result has been to change how IT supports the business. We now have a
coherent IT operation and an expanded, more skilled IT team that aims to
understand and fulfill the business requirements. We can now use services
because everything we do is oriented around the business processes.
From a CIO viewpoint, perhaps the biggest value has been that my IT depart-
ment now understands our business processes. We are not “techies” anymore.
We are Business Process Retail Technicians. Furthermore, the obverse is true:
the business also understands the drivers and levers that affect IT. The busi-
ness is both more realistic and imaginative, now that it understands the layers
and the services as well as the complexity of what we have developed.
 Australian retailer focuses on business processes as
the entry point to service-oriented computing.
Page 14

The final analysis: it begins and ends with process management

Highlights Looking back, I do not think we had even heard of the term “SOA” until
comparatively recently. Rather, we adopted the approach that KAZ brought
to us as a way of reaching our objectives. They convinced us that the process
management approach would enable us to move from A to Z without signifi-
cant negative effects on the business. There was never any discussion of SOA
principles that I can recall.

Instead, the focus was on what WebSphere Process Server would allow us to
do — on the function and effect, not the architectural principles. I remember
thinking that it all sounded really good, almost too good. Ours was a business-
While the project did not begin
driven decision. It was not a conceptually driven conclusion.
with a formal decision to take
advantage of SOA, it was
That is not, however, to downplay SOA. We did not know we were delivering
immediately evident that the
according to SOA principles. We did not know that others had arrived at
initiative would benefit greatly by
the sorts of conclusions we had. Now I can see that we “did” SOA without
adhering to SOA design principles.
knowing about SOA— and this confirms to me just how effective SOA is and
continues to be for the business.

Page 52 of 60
 Australian retailer focuses on business processes as
the entry point to service-oriented computing.
Page 15

About IBM
IBM is a global computer products and services company, with close to
US$97 billion in sales, approximately 386,000 employees, and operations
spanning more than 150 countries and including thousands of clients,
Business Partners and suppliers. As one of the world’s largest IT companies,
IBM strives to invent, develop and manufacture the industry’s most advanced
information technologies, including computer systems, software, network-
ing systems, storage devices and microelectronics. Its worldwide network of
services professionals provides the extensive expertise clients need to create
business value using IBM’s leading technological solutions.

About KAZ
KAZ Group, an IBM Premier Business Partner, is the largest Australian-owned
IT services company, providing innovative and flexible IT solutions that help
clients simplify, optimize and transform the way clients do business. As a
separately managed subsidiary of Telstra, KAZ combines a 30-year heritage in
IT with the networks and connectivity options of Australia’s leading telecom-
munications and information services company.

For more information

To learn more about the many ways IBM can help you build and manage a
Smart SOA™ solution for transforming business processes, please contact your
IBM representative or IBM Business Partner. Or visit us at:

ibm.com/soa

To learn more about KAZ Group, an IBM Premier Business Partner, visit:

kaz-group.com

Page 53 of 60
 © Copyright IBM Corporation 2008

IBM Corporation
Software Group
Route 100
Somers, NY 10589
U.S.A.

Produced in the United States of America

October-08
All Rights Reserved

IBM, the IBM logo, ibm.com, Smart SOA and

WebSphere are trademarks or registered
trademarks of International Business Machines
Corporation in the United States, other countries,
or both. If these and other IBM trademarked
terms are marked on their first occurrence in this
information with a trademark symbol (® or ™),
these symbols indicate U.S. registered or com-
mon law trademarks owned by IBM at the time
this information was published. Such trademarks
may also be registered or common law trade-
marks in other countries. A current list of IBM
trademarks is available on the Web at “Copyright
and trademark information” at www.ibm.com/
legal/copytrade.shtml.

Other company, product, or service names may

be trademarks or service marks of others.

This case study illustrates how one IBM customer

uses IBM products. There is no guarantee of
comparable results.

References in this publication to IBM products

or services do not imply that IBM intends to make
them available in all countries in which IBM
operates.

WSC14063-USEN-00
Page 54 of 60
 Innovation that matters

Yansha department store

embraces supplier collaboration
to streamline processes

Overview

■ Business Challenge
In order to maintain its market
leadership position, Chinese
retailer Yansha needed to
increase its competitiveness
against both local retailers and
new foreign competitors in an
increasingly deregulated Chinese
retail industry. Yansha saw that
the best way forward was to trans-
form the way it does business
with its supply chain partners ■ Key Benefits A rapidly changing retail landscape
through the adoption of new busi- • Reduced order lead time from The retail industry in the vast
ness processes, automation and 2.5 days to 4.5 hours Chinese marketplace is very differ-
business intelligence. • Improved order acknowledgement ent from that in the West. Retailers
■ Solution rate from 80 to 99 percent have historically been highly region-
Yansha deployed a first-of-its-kind • Reduced order error rate from nine alized, and the overall market has
supply chain management (SCM) to one percent been largely closed to competition
platform that leverages a service- • Achieved ROI in nine months from foreign companies. With the
oriented architecture (SOA) to inte- rapid growth of the Chinese econ-
grate enterprise resource planning omy and relaxation of regulations,
(ERP) and SCM applications. The that is changing rapidly. Mergers
platform enables Yansha and its and acquisitions are on the rise lead-
suppliers to leverage new real-time ing to industry consolidation and
performance information to provide expansion beyond regional boundar-
transparency into supply chain ies, and Chinese retailers must now
business processes and generate share the market with global compa-
actionable business intelligence, nies as well.
setting new standards of efficiency.

Page 55 of 60
 Transforming the supply chain through real-time performance information
Business Benefits
• Increased supplier information
service revenue by 50 percent
• Reduced order lead time from
2.5 days to 4.5 hours, driving down
inventory costs
• Improved order acknowledgement
rate from 80 to 99 percent
• Reduced order error rate from nine
to one percent
• Achieved ROI in nine months
• Enhanced operating and business
process efficiencies, visibility, asset
structure and both customer and
supplier satisfaction
• Enabled the creation of a value-based
supplier pricing model that uses new
supplier performance metrics
• Reduced operating risks due to
optimization of supplier relationship
profitability and lower error rates
“ Exchanging our
data and interacting
closely will enable us
to respond to the
market appropriately.”
– Mr. Ai Jie Ma, Director of Yansha
Technical and Information Department
Page 56 of 60
This adds up to unprecedented competitive pressure for Yansha, one of China’s
largest regional retailers. Yansha is an upscale brand with revenues in the
billions of Yuan each year and 215,000 square feet of retail space at its Youyi
Shopping City in Beijing. Catering to an upscale clientele, Yansha sells high-
end, exclusive goods from brands such as Versace, Prada and Calvin Klein.
Yansha has long displayed industry leadership. Opened in 1992, Yansha
was the first retailer operating as a joint venture in China to introduce modern
enterprise processes and computer systems aimed at improving managerial
methodologies. In 2000, it implemented IBM Business Partner eFuture’s ONE
POS-ERP suite, providing it new levels of internal efficiency. In 2003, the ERP
suite was upgraded with SCM capabilities.
But Yansha was not realizing the full potential of its systems. With the rapid
pace of change in the retail landscape, Yansha knew that it had to do more
if it was to maintain its leadership position. Faced with the prospect of having
to compete with highly efficient foreign competitors, Yansha realized that it
had to optimize its supply chain and improve efficiency among its 1,800-plus
local and international suppliers, and that leveraging technology was the way
to do it. This quantum shift represented a radical departure for Yansha, which
like its local competitors, was still doing business manually for the most part,
relying on paper-based processes and interaction via telephone and fax.
Yansha faced two fundamental challenges in its effort to optimize its supply
chain: first, to streamline and automate its business processes, and second,
to find a way to get all of its suppliers to buy into a new, more efficient way of
doing business.
Transforming business processes for enhanced decision-making
Despite its implementation of an enterprise suite, a number of obstacles –
continued reliance on manual processes, the siloed nature of many of its sys-
tems and a lack of integration with supply chain partners – were hampering
Yansha’s ability to track and integrate information in real time and generate
actionable business intelligence from it. More than 30 key supply chain pro-
cesses were handled manually. The result was low productivity, high error rates
and inaccurate business data, all leading to reduced competitiveness.
To transform its processes for more informed decision-making, Yansha worked
with the IBM China Research Lab (CRL) and eFuture to develop Blue Engine,
a process-driven SCM platform built specifically for the retailer. Blue Engine
incorporates both automated business processes (such as purchase orders,
shipping notification, invoicing, payment and return of goods) and new function-
ality based on IBM WebSphere® Process Server and IBM DB2® middleware.
2
By integrating information from existing systems with new automated
Key Components
processes through a service-oriented architecture, Blue Engine accomplishes
several key objectives: Software

• Automates the supply chain management-related key business processes among • IBM WebSphere Process Server
people, across multiple existing applications and between Yansha and its suppliers • IBM DB2 database software
• Improves visibility through real-time monitoring of business processes, generating
Services
key performance indicators (KPIs) – such as order acceptance rate and on-time
• IBM China Research Lab
delivery rate – that enhance decision-making capabilities
• Provides suppliers with better online information services to make customer buying • IBM Global Business Services

behavior, sales trend and process information transparent, enabling suppliers to IBM Business Partner
adjust and optimize their operations to satisfy market demand. This increases supplier • eFuture
willingness to pay for these fee-based services (thereby increasing revenue), while
encouraging them to move away from manual interactions – thus improving overall
supply chain efficiency

Because of the need for the efficient integration of information, processes

and systems across the enterprise and out into the supply chain, the adoption
of SOA is a key part of Blue Engine. It provides the flexibility to quickly build
new solutions (and change existing ones) based on immediate business need.
SOA also enables greater interaction with suppliers through Web-based delivery
of services, which fosters greater responsiveness. According to Mr. Ai Jie Ma,
Director of Yansha Technical and Information Department, “This solution will
help us build an information platform together with our suppliers in their internal
information system. Exchanging our data and interacting closely will enable us
to respond to the market appropriately.”

With Blue Engine, many of Yansha’s paper-based manual processes have

become a thing of the past. Workflow-related activities such as issuing purchase
orders and checking inventory are pushed directly to appropriate users via
Why it matters
mobile short messages, browser-based workspace and e-mail – triggering alerts
In the vast Chinese retail market,
when activity processing is delayed, and significantly improving business
deregulation has been driving increased
process execution. Business users can also employ collaboration utilities such competition from regional players as
as mobile short message services to find the right person to solve potential well as newly arrived international
process issues, which helps streamline resources and avoid rework. companies. In order to maintain its
leadership position in the marketplace,
major Beijing retailer Yansha deployed
The power of real-time information an SOA-based supply-chain manage-
The Blue Engine project pioneered the first application of a process automation- ment solution – an industry-first in China –
based workflow engine using IBM China Research Lab’s Web 2.0-based visual- that enabled the company to expand
its capabilities and transform the way it
ization and interactive business process monitoring technology for China’s retail
does business with over 1,800 suppliers.
industry. This visualization technology enables Yansha management to get an Thanks to streamlined, automated pro-
accurate, real-time view of its supply chain, delivered through a “dashboard” that cesses and new business intelligence,
displays continuously updated key performance indicators. This in turn provides Yansha has been able to increase its
competitive edge over other retailers by
a solid basis for business decision-making and process optimization.
optimizing the efficiency and profitability
of its entire supply chain.

Page 57 of 60 3
 More importantly, real-time information enables Yansha to work more effectively
and efficiently with its suppliers. The retailer now has the information it needs
to accurately categorize its suppliers based on a number of factors including
their profitability, monthly selling trends and level of activity. This has enabled
Yansha to come up with a completely new, value-based supplier pricing model
© Copyright IBM Corporation 2007
that gives preferential treatment to those vendors which are most valuable and
IBM Corporation
profitable for the company. In this way, suppliers are given an incentive to work
Global Solutions, Industry Marketing
efficiently: superior performance is rewarded with a better deal. 294 Route 100
Somers, NY 10589
U.S.A.
The availability of new information provided by the solution has also enabled
Produced in the United States of America
Yansha to provide enhanced fee-based online information services to its 11-07
All Rights Reserved
suppliers, which not only encourages them to adopt the new methods, but also
IBM, the IBM logo, ibm.com, DB2 and WebSphere
generates additional revenue for the retailer.
are trademarks or registered trademarks of
International Business Machines Corporation in
the United States, other countries, or both.
Competitive advantage, greater efficiency. . . and satisfied suppliers
Other company, product, or service names may
All 1,800 of Yansha’s suppliers actively use the supply chain management
be trademarks or service marks of others.
solution and supplier satisfaction has improved significantly. The improvements
Many factors contributed to the results and
in efficiency are dramatic: Order acknowledgement (a required verification benefits achieved by the IBM customer described
in this document. IBM does not guarantee
step in the supplier order/fulfillment process) is up from 80 to 99 percent, order
comparable results.
lead time has dropped from 2.5 days to only 4.5 hours and error rates are down
References in this publication to IBM products
from nine percent to only one percent. Risk and cost have both been reduced, or services do not imply that IBM intends to
make them available in all countries in which
and competitiveness is greatly improved. Even the revenue generated by online
IBM operates.
supplier information services has increased by 50 percent.

“Our shopping mall now has a technical advantage,” notes Mr. Ma. “We have
a leading role in securing prospective sites, enabling us to rebuild business
processes and stay competitive. It is a classic case of information technology’s
business value for corporations.”

For more information

To find out how better use of your information assets can help transform your
business, please contact your IBM representative or IBM Business Partner.

Visit us at:

ibm.com/innovation

ODC03019-USEN-00

Page 58 of 60
Smart Work in Retail – Customer Stories
© Copyright IBM Corporation 2010

IBM Corporation
Route 100
Somers, NY 10589
U.S.A.

Produced in the United States of America

January 2010
All Rights Reserved

IBM, the IBM logo, ibm.com, Smarter Planet, the planet icon, DB2,
Lotus, Rational, Tivoli and WebSphere are trademarks of International
Business Machines Corporation in the United States, other countries
or both.

Other company, product and service names might be trademarks of

IBM or other companies. A current list of IBM trademarks is available
on the Web at ibm.com/legal/copytrade.shtml

References in this publication to IBM products and services do not

imply that IBM intends to make them available in all countries in which
IBM operates.

These customer stories are each based on information provided by

the client and illustrate how one organization uses IBM products.
Many factors may have contributed to the results and benefits
described; IBM does not guarantee comparable results elsewhere.

SWM14010-USEN-00