Coles Myer's $50m IT strategy key to revenue boost

Coles Myer plans to have an end-to-end supply chain in place by the end of 2004 as part of a five-year $250 million overhaul of its IT systems.

John Fletcher, CEO of Coles Myer, said that as part the group's strategic review, the implementation of a supply chain strategy -- with common standards, processes and platforms across the group -- would be a two-year program.

He said two key drivers needed to be in place to deliver the goals, the appointment of a supply chain director, for which the search has already begun, and "quite a bit to do with IT changes".

He said much of the $50 million a year allocated over the next five years to IT restructureing will go towards the supply chain refit. One initiative to be included is the rollout of B2B electronic trading.

Specifics of other IT-related projects are yet to be announced, according to a Coles Myer spokesperson.

The importance of IT's contribution to the company's plan to double earnings to $800 million within four years is evident by the recognition of IT and supply chain as two separate business units within the group's new management structure, reporting directly to Fletcher.

According to the strategic review delivered by Fletcher, a shared IT services model will be mandated across all brands. This includes standardising IT systems and key processes.

Currently 33 per cent of the company's IT systems are brand specific and autonomous, while the remainder operate as partly and fully-shared services across the group.

This program will also be implemented over two years, with benefits expected to come into play during the financial year of 2004.

The Food & Liquor division is currently developing an electronic invoicing and receiving system whilst optimising its network. Plans are also in place for the Coles Myer-owned computer reseller Harris Technology to implement kiosks to improve its range and to reduce inventory levels.

These IT upgrades are sure to please many suppliers wishing to interface with the retail giant.

David Lindill, Greater Asian Region implementation officer for Kodak, said one its ongoing challenges has been communicating with one its largest customers, Coles Myer.

"We have had long discussions with the company on how we can intergrate to get supply chain benefits."

He said currently each store had its own supply chain process and systems in place.

"Hopefully ... there will be a change from the present separate IT systems and processes."

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