From the warehouse...to the shelves

Logistics management is a key issue for a retailer operating at Tesco's scale

Warehouse staff will use GSM handsets

In its UK home market the firm operates 1,800 stores supplied by 42 distribution centres.

Increased data capacity will do a lot for distribution centres, said Nick Folkes, IT director of operations and infrastructure at Tesco. Existing equipment includes
arm-mounted PDAs that cannot communicate directly with the depot management system.

The fixed-mobile convergence application, which will run on top of the multi-service
network, means individual Tesco warehouse workers will always be contactable, and those moving between locations will pay lower tariffs through a deal with mobile phone network provider O2.

The firm expects the greater network bandwidth to deliver the necessary quality for
mobile voice over IP within its warehouses.

The IP network will go live this month, first by connecting international operations in China, Japan, India, US and Ireland. The system will then roll out across all UK sites, including offices, stores and depots. The international rollout of the network will help Tesco rationalise its procurement processes, said Folkes, citing the UK’s centralised buying model as being repeated in different markets to achieve economies of scale.

The network will also support Cisco telepresence videoconferencing which Tesco expects to cut down on executive travel and allow remote operation of interactive
whiteboards.

The firm is essentially building a mobile network, said Andy Evans, chief technology
officer at supplier C&W. This means Tesco will have the ability to integrate all its applications over a common delivery platform.

At store level, Tesco is going “ubiquitously mobile” with GSM handset-equipped staff who will be more easily managed. A multi-store “staff to check out” system will be deployed. The network is the basis for a planned R &D programme involving in-store interactive kiosks that will carry live IP-based video from consumer experts. In the event that shoppers require guidance on particular products, be they electronics goods, DVDs or wine, they will be given access to an expert who will address their queries.

“We are not sure there is a business model here yet, but in R&D terms we are looking at what kiosks can do for us and we plan to pilot it,” said Folkes.