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Industry News - December 4th, 2009



O'Reilly Automotive Transitions to Paperless DC Network

O'Reilly Automotive announces it is accelerating its transition to a paperless distribution center (DC) network by expanding its use of voice systems from Vocollect.

O'Reilly has 3,415 stores in 38 states and more than 44,000 team members. Through its acquisition last year of CSK Auto Corporation, as well as the establishment of additional new DCs to support the company's growing business, the company projects it will have a significant number of distribution centers utilizing Vocollect Voice within the next four to five years, according to Greg Johnson, senior vice president, Distribution Operations, O'Reilly Automotive.

O'Reilly is currently using Vocollect Voice for picking in most of its existing DCs. All future new DCs will activate their operation with Vocollect, beginning with the first group of new DCs, by the end of 2010. Other existing O'Reilly DCs are at various stages in their transition to a voice-centric solution.

"Our productivity and accuracy levels continue to improve throughout our distribution operations with the use of voice from Vocollect," said Johnson. "Last year we processed over 96 million lines using Vocollect Voice. Voice has helped us to reduce cost, improve customer satisfaction and overall business performance, as well as achieve a very positive return on investment. Vocollect also will help us in our continuing efforts to transition to paperless DCs."


Bon-Ton Uses Warehouse Advantage, Boosts Productivity 13.6%

The Bon-Ton Stores implements Warehouse Advantage from HighJump Software in three of its distribution facilities. Most recently, The Bon-Ton Stores implemented the HighJump WMS in its Fairborn, Ohio distribution center, which supports operations for 70 retail stores. The HighJump system manages a fully automated material handling system and coordinates movement of store merchandise - 85 percent of which is routed onto outbound trucks within four minutes of arrival at the warehouse. The remainder of the merchandise is routed for value-added services like re-ticketing or tagging before being shipped to stores.

"The installation went very smoothly, which was critical since we launched it during peak receipts," said James R. Rawlins, Senior Vice President of Distribution and Logistics, The Bon-Ton Stores. "The improved visibility of ASN purchase order and inbound trailer information has been extremely beneficial and is contributing to efficiency improvement."

The Bon-Ton Stores has an aggressive growth plan for its online business and expects to double the number of orders it processes over the upcoming holiday season. The company has increased productivity in the area by 13.6 percent. Additionally, the solution has helped increase inventory accuracy and enhance visibility of the fulfillment workload, aiding planning for daily staffing.

"We've been impressed with so many aspects of our HighJump warehouse management system, from its scalability, to the quick implementations, to the excellent support we've experienced," said Lora Hardin, Divisional Vice President, The Bon-Ton Stores. "To keep our customers coming back, we need to get products to our stores quickly. HighJump Warehouse Advantage helps us move products efficiently and accurately, ensuring customers get the products they want, when they want them."

The Bon-Ton Store plans to also manage its fine jewelry business with its HighJump WMS and will track its high-value jewelry all the way to its stores. The jewelry will bypass the distribution center and go straight to stores, where it will be received at the jewelry counter. The company also plans to finish rolling out the HighJump system into its two remaining retail DCs.


Ahold Expands Network Services Agreement with HP

Ahold signs a new seven-year infrastructure and applications services agreement with HP Enterprise Services. Under the terms of the agreement, HP will continue to provide management and support services for Ahold's global data center environment, which includes mainframes, servers and storage.

In addition, HP will implement HP Business Service Automation to make server and storage capabilities more robust and more highly available. Ahold will use HP ProLiant rack servers, HP StorageWorks XP Disk Arrays as well as HP ProCurve 2610 and 5412 switches.

Ahold also will gain network services from HP which connects its supply chain and distribution with its 3,000 stores, warehouses and office locations across Europe and the United States.

Ahold's workplace computing environment for more than 200,000 Ahold associates in Europe and the United States will continue to be managed by HP. The services include a full suite of workplace services across its store and office environments including service desk and site support services. HP also will migrate Ahold employees to HP hardware including HP EliteBook 2500, 6900 and 8500 series notebooks and HP dx2400, dc5800, dc7900 series Business Desktops.

In the United States, Ahold will turn to HP to provide applications management for a wide range of business and administrative applications.


Coldwater Creek Significantly Cuts Back on IT Spend

Despite a challenging two years of sluggish sales, Coldwater Creek announced its has significantly reduced its technology investment and plans for new store openings.

The retailer opened all 10 of its new stores planned in fiscal 2009. According to Tim Martin, Chief Financial Officer, Coldwater Creek, "We expect capital expenditures to approximate $25 million for the full fiscal year 2009 which is down significantly from fiscal 2008 as a result of reduced new store growth plans and lower technology investments."

To regain profitability and growth, Coldwater Creek unveiled it will refine its merchandising and promotional strategies and restore its direct business. The retailer will make adjustments to its value pricing in terms of depth and breadth of promotions and will refine its merchandising strategies.

Coldwater Creek also revealed it will better utilize its multi-channel platform to drive retail sales since catalogs remain its number driver of traffic to our stores. The retailer also will continue to increase the level of personalization in its e-mails as well as expand its efforts to other customer touch points like Web site and call centers.


Dollar Tree Optimizes Assortments By Using Critical POS Data

Dollar Tree optimizes inventory assortments after implementing retail technology tailored to meet its unique business model. According to Kevin Wampler, CFO, Dollar Tree, the retailer is using POS data by item and store to make smarter allocation decisions to meet increasing customer demand. Using this critical data, the retailer also has been able to optimize the flow of seasonal product to its stores consistent with sales trends.

"Our inventory productivity continues to accelerate and we've consistently increased our inventory turns over the past four years," says Wampler.

Another key initiative for Dollar Tree has been its growth strategy. In its latest quarter, Dollar Tree opened 94 new stores and relocated and expanded another 33 stores. For the year, the retailer opened 240 new stores and relocated and expanded 75 stores for a total of 315 projects this year. Dollar Tree ended its third quarter with a total of 3,803 stores.


Barnes and Noble Unveils New Digital Initiative

Barnes and Noble is ramping up its technology investments in a new digital initiative.

"Our digital strategy is much more about selling e-books," says Stephen Riggio, Vice Chairman of the Board and CEO, Barnes and Noble. "We will soon be selling a much, much wider range of content, digital content than what we offer in physical format, either through our stores or online. We will be selling new and archived newspapers, blogs, magazines, periodicals and journals. And our strategy has been to make all this content available to readers wherever they are, from a Nook device, PC, a Mac, a smartphone, as well as from a coming wave of new devices with ever more amazing capabilities."

The retailer continues to enhance its multi-channel strategy in other ways and is now offering a new "pick-me-up service" which allows customers to use the retailer's Web site to reserve any book that is in stock and can pick it up in stores within 60 minutes.

The retailer also launched its new e-bookstore this year, which according to Riggio "took the promise of any book, anywhere, anytime to a new level, enabling customers to download e-books in second to more platforms than any other online bookseller."

"In order to meet this overwhelming demand and to continue to serve this fast growing market, we are ramping up our production schedule and increasing our investments in the necessary people and technology to establish a strong market position," adds Riggio.


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