Order Replenishment: Core-Mark

Situation

Client

Core-Mark is one of the largest broad-line, full-service marketers and distributors of packaged consumer products in North America. From milk and produce to candy and beverages Core-Mark prides itself on quick 24hr delivery with a high fill rate.  With more than 29,000 locations across North America Core-Mark services traditional convenience stores, drug, grocery and specialty stores and other small format retailers that sell consumer packaged goods.

Existing Solution

Core-Mark utilized 10,000 Telxon data capture device to automate customer ordering.  Customers, on average, place an order each week.  Using the handheld saves the customer from reading item numbers over the phone or faxing an order which must then be data entered by Core-Mark customer service.  The customer would scan a product barcodes from a catalogues, shelf tags, or product box followed by a quantity.

Pain

While the current solution did provide some efficiency, three major issues confronted Core-Mark’s IT director:

• The Telxon unit only captured data. There was no way to verify what was scanned. This led to customer scanning products that were discontinued, replaced, or not sold by Core-Mark. This resulted in a customer perceived low fulfillment rate, unaware of their own mistakes.
• Product offering and promotions constantly change. A Gatorade with packaging tied to a specific movie could have a new UPC code. Manufacturer driven promotions must be sent via catalogue updates or fax. Customers were habitually ordering from outdated information.
• Telxon handhelds were end of life. Acquiring new hardware or replacement parts became increasingly difficult, even after market.

The IT director determined a new solution must be created. It will utilize the latest technologies with a focus on increasing customer order accuracy and fulfillment. The pilot project for “Smart Ordering” was given the go ahead.

Solution

Workflow

Each customer is sent a new pre-configured handheld with docking cradle. Once it is connected to a store computer, the handheld shares the existing internet connection through ActiveSync to communicate with Core-Mark servers. Product and pricing information is automatically synchronized each night so the handheld is up to date and ready to go.

When it is time to place an order, any store employee simply removes the handheld from the cradle and walks the shelves. The first screen the user sees is the latest manufacturer promotions, ensuring customers are always aware of them.

The user can scan a single product UPC, box UPC, or catalogue item number. Upon each scan the user is displayed the name, current selling price, current cost, minimum order quantity, and more. If a product is discontinued or replaced, the handheld speaks to the user notifying them and presents an alternative. If the user can’t remember how many products to order, they can click a button to see a graphical representation of their 4 week order history. As the user continues the scanning process, a subtotal of the product cost and retail value is displayed at the bottom.

To complete the order, the user places the handheld back into the charging cradle. The device automatically detects this state and transfers the order to the core-mark servers. At this point the user can walk away confident in the arrival of their product. Or they can view the order through an automatically launched web-portal to make changes as necessary.

Technology

Handheld

Core-Mark wanted a handheld that could be dropped and thrown around the store a few times and still keep going. The Intermec CN2B was selected for its compact yet rugged form.

Network

Core-Mark has no control over the environment in each store, so wi-fi was not an option. Neither should Core-Mark pay for a separate phone line or internet connection. Therefore the handheld makes use of whatever internet connectivity the store computer has (high-speed or dial-up).

Enterprise Mobile Software

The application is written in C# .NET 2.0 running Microsoft PocketPC 2003. For local data storage, Nuway chose SQL Server Mobile.

Server Software

Nuway wrote ASP.NET web services to communicate with the handheld. The web portal is written in ASP.NET 2. Both of these reside on dual windows 2003 servers for load balancing. Order data is stored in SQL Server 2005 until it is ready to be processed and sent to the AS/400 legacy system.

Results

What Went Wrong

No software project goes perfectly. No software company should pretend that it does.

Each store has its own customized set of products it is able to order with the associated pricing data. This results in up to 30,000 rows to push down to the mobile device. With limited memory on the handheld, a massive pricing update could crash the system or take hours to process all the database transactions. Nuway took this heavy processing and put it on the server, pre-generating the mobile databases and transferring the finished product to the handheld. This cut processing time from hours to minutes and made it easier to test.

Secondly, having the customer’s computer as a key component of the solution created many headaches. Firewalls, strange anti-virus software, out dated OS’s, viruses, and more interfered with the solution. This was first solved by creating clear systems requirements that could be validated by store chain IT staff. Second, creating a smart installation program that could test the environment and connectivity before orders were created.

Key Innovations

Store managers must be able to review an order created by an employee and make possible changes. The standard solution would be to have a username and password on the web portal for each store. However, convenience store employees can have low loyalty to their work. They could work a Friday shift and then just decide never to come back. A shared username and password among store employees could be an administrative nightmare, needing to change the password after every quit or firing. On top of that, store managers do not want the possibility of a disgruntled employee from placing false orders from home.

This was all solved through a clever and unique authentication mechanism. Once an order is created on the handheld, it is tied to the handheld and the computer it is uploaded from. This computer is the only computer that may modify the order. No user names, no passwords to remember. On top of this, as soon as the handheld is removed from the cradle, the web portal immediately prevents modification. In essence the handheld became a strongly encrypted key that cannot be duplicated.

Benefits

• The pilot in 5 stores was a resounding success. Core-Mark proceeded to implement the Smart Ordering System as their central ordering procedure for chain stores.
• Over 2,500 handhelds are now in use throughout North America, and the requests keep coming
• Order frequency and fill rates increased
• Core-Mark recaptured customers that previously left, returning due to the features of Smart Ordering

Customer Contact

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