Optimising Arch Enterprise

Background: the purpose and function of Arch Enterprise (AE)

• A specialised merchandise management system that facilitates central operational control for retail operations
• Optimises and maintains efficiency and, ultimately, profitability in a multi-store enterprise
• Allows central management of:
• Procurement cycle – ensures the operation is optimally stocked
• Margin control – sales price maintenance and campaigns to maximise profits
• Data flow is central to the solution, with two main categories:
• Master data – product and supplier information that creates the trading environment
• Transactional data – operational data uploaded from the stores’ trading
• Integrated Business Intelligence (BI) across stores which:
• Centralised reporting eases the management burden
• Plays an important role in making strategic business decisions

Project overview

The project was undertaken for a group consisting of a mix of 56 retail and wholesale outlets which had lost significant market share and turnover during 2017/18. Some of the apparent issues were that products were not competitively priced and frequent out-of-stocks on key lines while being grossly overstocked on non-movers. The key objective of the project was to regain market share without adversely affecting margin. A margin and replenishment strategy were therefore developed to price goods more competitively and minimise out-of-stock situations.

Problem areas identified

The following problem areas were identified, with the aim to rectify:

• General ownership and responsibility of Arch system not clearly defined, thus no responsibility and accountability
• Poor master data quality
• Article variant links
• Inefficient department hierarchy complicated reporting
• No margin plan for different business models and divisions
• Incorrect article listings
• Fragmented use of AR and AE functionalities
• No formalised replenishment cycle / order planning
• Receiving process
• Stock not always received against original purchase orders
• Arch configured to use back orders on purchase orders, but orders not updated up or deleted
• Stock control
• Stock adjustments (weekly hazard counts) were not updated in the system, resulting in incorrect stock-on-hand figures
• High number of recounts needed to verify correct stock-on-hand, resulting in time-consuming financial stock takes
• Number of lines active in each store (80,000) resulting in onerous stock counts
• General
• Debtor payment terms not enforced
• Service department items recipes not implemented resulting in inaccurate stock on hand figures and GPs
• IT division
• Data communication problems – critical
• Incorrect printers and scanners used for selected business model
• Master data
• Incorrect article listings
• Legacy data in need of clean up

Remedies implemented

• Designed and implemented a new department structure
• Optimised and rationalised central article master, reducing it from 86,000 to 28,000
• Reduced blind counts during financial stock take from three to one with a focus on variances
• Implemented new processes in AR and AE
• Implemented a formal replenishment / order plan
• Installed correct printers and scanners for business needs
• Trained store managers, assistant managers and buyers
• Trained head office buyers, category managers, executives, directors, regional managers and IT department personnel
• Built and implemented a butchery process (recipes)
• Built BI reports in Arch Enterprise
• Custom-designed AR reports
• Built executive reports in AE
• Implemented business model analyses

Overall results achieved

Comparing 2019 (remedies implemented) with 2018: