Threshers toasts benefits of supply chain revamp

The retailer is now focusing on its most profitable lines

Threshers is overhauling its legacy IT systems to gain more control of the key IT processes that support the off licence group’s product supply chain.

At the end of last year, the company launched a new programme to implement SAP software ­ - due for completion by the end of January 2009 ­ - to replace its legacy JDA supply chain management software.
The firm has also sought advice from consultancy ARC Retail to develop a better price and promotions strategy and select its best products, according to Threshers IT director Nicola Duckett.

“We wanted a system that gives us better management and control, identified opportunities and enabled us to set up a new range of prices,” she told Computing.

Previously Threshers had been using JDA’s Allocation and Replacement software. The applications were supported by Threshers staff typing sales and product data into Excel spreadsheets. But this system meant the management of business data had been disjointed, and Threshers wanted more control over sales information to tackle its merchandising and supply chain processes, said Duckett.

With most of Threshers’ IT outsourced to Steria, Duckett and her department of 10 employees have focused on managing the implementation of SAP to ensure they meet the firm’s needs.

“All the projects have steering groups with business groups assigned, for example the SAP project has a team of 20 people working on implementation,” said Duckett.

ARC Retail has been helping Threshers to reduce its product portfolio by half to ensure stores only stock ranges that drive profit. Data on 6,000 products were gathered in Excel spreadsheets and cutting out poor-selling product lines left a portfolio of about 3,000 goods.

ARC Retail also helped Threshers to identify which store should fall under each of the three chains ­ Threshers, Wine Rack or The Local ­ depending on sales performance.

The project helped Threshers to reduce its floor space by 14 per cent, according to ARC, leading to a four per cent profit improvement, assisted only by a “very small” price change on certain lines.

Thresher Group chief executive Yvonne Rankin was brought in to turn around the business after a buyout by private equity firm Vision Capital in mid-2007.

“The Thresher Group is an amalgamation of businesses assembled over time and under various ownerships and brands,” she said.

“Historically the firm was geared towards pushing out products, rather like a wholesaler, as opposed to acting more like a retailer and listening to what the customer needs.”

Rankin said Threshers is striving for savings of up to 10 per cent in the longer term.
In future, the firm will also look at new promotional planning and space management tools.