SAFEWAY Ingredients for Life
Year of establishment : 1915 Founder: M.B.SKAGGS First Store at American Falls ( A tiny grocery store) Listed in NYSE in 1928 First merger with : Selig Stores in 1926 i.e. SKAGGS + SELIG --------------- SAFEWAY Till 1930, 322 stores has been established.
First SAFEWAY store
Value to the Customer Low Margin Distribution without waste Initial Punch line : Always changing for better Industry Type : Retail (Grocery) Existing in Top Ten retailers of US Existing in FORTUNE 500 list
Expansion of Safeway
Today SAFEWAY has 1775 Stores across US & Canada only. Headquarter: Pleasanton, California Company expended into Canada through the acquisition of nine stores (Canada Safeway) in 1929 Major acquisition:- John-Gardener, Pratt supermarket, Big-beer-bazaar, Tamini Group, Jack & Salsar chain
At a Glance
UK grocery retailing industry
Introduced POS in 80 s POS is a computerized system for item identification, price determination, sales receipt and sales data maintenance. Benefits: Handles data efficiently Avoids overstocking Better inventory management
Centralized communication in 90 s $ 600 million telecommunications link First stage- Stores to central computer system Second stage- Central computer system to supplier s Benefits:Direct reordering & co-ordination Lesser money in inventory Lower manufacturing cost
Bar code History & RFID Bar code came into being in 70 s Development of UPC (universal product code) RFID- Radio frequency identification devices Benefits:One stop information Control on physical movement Lesser time to find
UCCnet Non profit subsidiary of uniform code council Provide data registry services for SCM Collaboration b/w suppliers and marketers Benefits:Product details made available electronically Reduces product data entry time
Safeway Six steps for Success
Customer segmentation Category management Enhanced supply-chain efficiencies Private label products Health and wellness initiatives branding
ONGOING SHELF MAINTENANCE SCHEMATIC DEVELOPMENT & NEW ITEM PLACEMENT MANUFACTURER S COUPON PROCEDURE CATEGORY REVIEW/ RESET CALENDER PRODUCT RECALL/ PRODUCT WITHDRAWAL PRODUCT RECOVERY CENTRE WAREHOUSE RECEIVING & BUYING PROCEDURE
Main Problem of SAFEWAY
Faced in 1990 due to recession. Decreased Profitability Transportation Fresh food availability and freshness Fresh food was the main section from which representing 1/3rd of the of total sales. So it could not be ignored.
Safeway recognized that key to rebuilding the lost profitability was to increase in the yield of the existing store base relying than adding more stores to its portfolio. Key reason was the fresh food offered was weak in comparison with safeway s main rivals. Food was not fresh as it could be and availability was not reliable.
SAFEWAY set a target of target of getting the fresh product from the factory production line to the store in under 24 hours, less than half the current response time. It was implemented to maintain freshness of the food. Suppliers ability to respond was limited by SAFEWAY S internal practice that had enabled it to achieve lowest cost status in the industry.
First move of SAFEWAY
Reengineering its replenishment system and warehousing methods together with completely changing the transportation schedules. The implication was that logistics costs would rise to secure the broader supply chain goals. Being a bigger fleet operators, SAFEWAY was able to offer a range of transport options such as backhauling and consolidation to allow suppliers to meet the increased frequency of delivery cost effectively.
Line managers found that they needed to get much closer to their daily operations and try to anticipate the problems. The outcome was successful, providing the fresher food and greater availability. The methods were adopted to limit and even eliminate the rising cost pressures that this approach had initially implied.
The venture was successful because every party in the supply chain was prepared to make difficult changes to provide a more effective offer to the end customer.
Safeway links trucks to base and stocks to stores in real time
Britain's Safeway supermarket chain is simultaneously introducing radiobased technologies to provide communications and tracking in its delivery fleet and to reduce in-store restocking times. The two developments, although not explicitly connected, reflect what Mike Sturt, head of logistics development for the company, describes as "a commitment to develop new and innovative functionality". Safeway is adding EutelTRACS to its own integrated transport management system. It says the addition of real-time capability will enable it to manage its distribution resources more efficiently. It is hoping that this, combined with close scrutiny of vehicle and driver performance, will improve vehicle utilization, reducing unproductive mileage, and will aid safety and reduce environmental impact.
On-Demand Delivery Services and EGrocers
E-grocer: A grocer that will take orders online and provide deliveries on a daily or other regular schedule or will deliver items within a very short period of time On-demand delivery service: Express delivery made fairly quickly after an online order is received
Grocery shopping in the palm of your hand
± Safeway implemented its Easi-Order services using a Palm handheld device (PDA) to allow customers to point and click their grocery lists and send them to Safeway via phone ± Part of the company s Collect & Go service
± Valued customers are given handheld devices that are loaded with an application that contains a list of thousands of grocery items, including descriptions and prices ± Customers review the items and make their grocery lists off-line when time permits ± Estimated time savings is 60 to 90 minutes each week
± Device is plugged into a standard phone socket, and it dials up the Collect & Go server ± Shopping list is downloaded to the server, and next week s suggested list along with suggestions and promotions are uploaded to the device ± Data collected by Safeway allow the company to offer outstanding customer service
± Order is picked and packed by the store and set aside for the customer to pick up at their specified, convenient time ± Collection at dedicated checkout counters EasiPay terminals, which allow customers to avoid check-out lines altogether ± Home delivery may also be available
± Customers download their orders directly to the Collect & Go intranet through the Internet ± In the future, Safeway plans to have screen phones, digital TV, and speech processing devices assist grocery shoppers in making their shopping experiences as easy as verbally telling the program what they want
Collaborative supply chain