Project of the Year Awards: Asda

As one of the UK's largest retailers, Asda produces and sells more than 6,000 own-brand products, from a wide range of food and drinks to its George brand of clothing.

Under regulatory requirements, the company is obliged to provide detailed information on its food products, including nutritional data such as fat and carbohydrate content.

Managing this information, which is derived from hundreds of suppliers in thousands of locations around the world, is a serious challenge for the firm.

To deal with the problem, Asda worked with IT services firm Ramesys to create a multi-million pound portal for its suppliers.

The portal allows 24x7 access to Asda's product database and significantly improves the flow of information between the retailer and its suppliers.

What were the business objectives of the project?

Asda needed a system that could help comply with legislation and communicate more effectively with hundreds of suppliers across the globe.

'As a food retailer, we are increasingly being targeted with new legislation so it's important that we can comply and that we have a system that can supply us with robust data about our products,' said John Clague, Asda's European head of technical services.

'The second thing we needed was to be able to communicate with our suppliers. We have a large number of firms providing a large number of individual products, so we needed a means of communicating efficiently with them.'

The project centred on the replacement of an outdated system, which was no longer supported by the IT department and wasn't able to connect to the company's external suppliers.

'We had an existing system that was handling some of our information, but it was developed in 1986, so it was all on parchment and quills. We needed to move into the 21st century,' said Clague.

Another of the intended goals for the system was to cut down the time it takes to bring new products to market, which ranges between 10 and 40 weeks.

Clague aimed to cut two weeks off that time, which would deliver a range of benefits to the retailer.

What were the key milestones in the implementation?

'There's two elements to the project. There's the portal for collaborating between us and our suppliers. This went live in late 2002,' said Clague.

'The second part was the due diligence database, which contained all the information about the development of the project, including the product specification, any auditing and testing of the product and so on. This is the information that needs to be produced if there is any food scare. This system went live in late 2003.'

'We've now got twelve months of results from what we've done with the portal and the launch of the database.'

What technology was used?

The portal was built on a range of technologies, including Lotus Notes, Java and Javascript.

Suppliers only need a web browser to access the system.

Asda deals with 400 different suppliers in 1,100 different production sites, so needed a simple system that would be easy to adopt.

How did you manage the business change and people issues involved?

One of the key achievements of the project, which helped bring suppliers on board as quickly as possible, was to make the electronic versions of the forms on the portal as similar as possible to the paper versions.

'It looked and felt very similar to the manual forms, so the change they saw on the screen was not massively different. This was a big part of their acceptance and adoption of the portal,' said Clague.

Internally, Asda approached a group of 'super users' who helped to spread awareness of the system and the benefits it could offer.

What results were achieved?

The system allowed Asda to cut four weeks off its average development time for new products, exceeding the two-week goal it originally set.

'The reduction in time to market is very important as it allows us to get products on shelves quicker, which is important from a business point of view. That has been a big win,' said Clague.

With 3,000 new products last December alone, this is already delivering substantial benefits to the retailer.

Suppliers can now access and update Asda's product database via an online portal, which improves processes for them and the retailer.

They also obtain benefits from converting a number of paper-based processes into electronic processes.

What were the lessons learnt?

'In retail, things change very quickly. The important thing to bear in mind is that it's quite difficult to develop a system and make it robust and deliver something, in amongst all the change that is going on,' said Clague.

'You need a regular plan to aim for, but you need to be able to be fluid and allow changes to be made.'

What were the business benefits and return on investment?

'On average we got the time to market down by four weeks, which has delivered increased sales by having products on the shelves earlier. The savings from this alone equates to about three times the amount that was spent on the project in one year,' said Clague.

'The return is superb. And as we work towards this December, where we will deliver 3,500 new products, this return will continue to increase,' he said.

The system has given Asda better control over its product development process cuts the time to market, and reduces the number of products that don't make it through the process.

For compliance, the constantly-updated database and substantially improved means for communicating with suppliers will help Asda deal more effectively with food scares, such as genetically modified foods or BSE.

How do you plan to build on the project further?

The next stage is to add further improvements to the system, which will speed up and improve the creation of product specifications.

'We will also be looking at a wider rollout across the Wal-Mart group,' said Clague.

Computing says:

In the increasingly competitive world of supermarkets, launching new products is a vital part of gaining an edge. But retailers have to be aware of the price of non-conformance to regulations. Asda has developed an innovative solution that allows it to meet these potentially conflicting requirements, while delivering financial and operational benefits to the business.

Project at a glance

• Asda produces and sells more than 6,000 own-brand products, from a wide range of food and drinks to its George brand of clothing.
• It has created a portal that allows 400 suppliers in 1,100 sites across the world to access its back-end systems and update product information and specifications.
• The development time of new products has been cut by an average of four weeks and the company's ability to deal with food scares has improved.
• By bringing products onto shelves faster, Asda has generated a return of three times the original investment in the first year of operation.