Coles Group makes great strides with advanced analytics – Strategy – Software

Coles Group has made significant progress in its efforts to become more operationally driven by data and advanced analytics, with evidence on display across its supply chain, stores and online presence.

The group has announced a number of significant investments in its advanced analytics capability over several years, targeting efficiency improvements in various parts of its operations.

The advanced analytics vision came together at an investor day late last week, with chief operations and supply chain officer Matt Swindells highlighting the retailer’s transformation into a “data-driven, technology-driven, digitized omnichannel operation.”

Manhattan TMS

One largely overlooked project is replacing the grocery company’s transportation management system (TMS).

The new Manhattan Active TMS was introduced earlier this year. According to Coles documentation (pdf)It replaces the previous system called OneNet.

Software vendor Manhattan Associates specifically sought Coles’ input as part of a broader upgrade to the “core product,” Swindells said.

“They told us, ‘We know you know transportation now.’ ‘We’re upgrading our core product, we want to work with you on your custom designs to get into the core’ and that’s exactly what we just introduced.

“This gives us revenue and cost visibility, gets suppliers onboarded faster, and also has full tracking and traceability.”

Fresh product replenishment

Swindells said the impact of advanced analytics was also evident in fresh produce replenishment across the store and distribution network.

“We finished this a year ago, and what I really like about it is that we use our own internal advanced analytics team to generate, own, and generate forecasts (for what is needed and when it is in stores),” he said.

“We did a trial run with best practice solution providers and came out on top. Our twenty-plus years of knowledge in replenishment planning has really prepared us well to take control of our fresh supply chain.

“So now we can control the range and operation both in stores and distribution centers and give (fresh produce) suppliers greater certainty (about demand).

“This means that the speed at which we transport fresh produce will be faster than ever before, and fresh produce will gain speed. The freshest produce with the most efficient operation.”

Efficient correction effectiveness

Swindells said activity in a store can typically be thought of as “three main buckets — filling, repairing and serving.”

“Occupancy is obvious; stock the shelf, but correcting as a process is maintaining inventory accuracy, making sure the (store/shelf) layout is correct, rotating items and doing code checking,” he said.

“In a business of our size this means a huge amount of activity. In the past, we asked our team members to fix the entire story every day; scan every gap, investigate every low and high element, make sure to check everything that needs to be rotated, rework the load twice a day.

“And what we know is that 15 percent of all that activity results in an action that provides no value.”

Swindells said that by working with advanced analytics, inventory in stores has been “further digitised” and staff are now working on a “guided” list of activities informed by data.

“Now a team member is directed to the event in the store based on the data, and we can now measure that the effectiveness of that event has gone from 15 percent to 70 percent,” Swindells said.

Palantir project

Earlier this year, Coles announced that it has signed a mysterious partnership with Palantir Technologies.

Not much was said at the time about the retailer’s plans to use Palantir, other than that it would aid executive oversight and focus on workforce management.

The investor day revealed the first real detail of the partnership and how it finds its way into Coles stores.

Swindells said there were 24,000 process “standards” used to run a Coles store in a week, measured in 15-minute increments.

“They reflect the activity by day and department and…the sales we plan to make during that period.”

Swindells noted that “the process alone does not produce value” and that it led the retailer to “bring data and analytics to a depth we’ve never done before.”

“It takes 15 minutes to get all these work standards by day, by department, by store, and relate them to the team at the store level: Who works there? What are their abilities? And more importantly, at what hours do they want to do it?” he said.

“We are not trying to force the team to a theoretical standard of efficiency.

“For the first time, we are bringing the activity in a store to the time and capacity requested by the store team. “This is a fundamental difference.”

In the first phase of the activity, Coles is using Palantir to bring together “a complex time and motion system and team member assignment capability system.”

“(Palantir did this),” Swindells said.

He said team member attrition was reduced by 25 percent. Additionally, “80 percent of our team now works the desired hours they tell us are the shifts they want to do.”

“Not only is our productivity still there, but our team member engagement is up by a quarter and our performance is improving. That’s really powerful,” he said.

“In situations where there are cost pressures, being able to maintain efficiency with the team rather than against it is a factor that makes a difference.”

Swindells said the retailer now plans to integrate “customer NPS (net promoter score) data” into Palantir as a “third dimension.”

This will position Palantir as a system that drives “process efficiency, team engagement, talent, and customer outcomes.”

“We now have the ability to find a way to work efficiently for accurate results,” he said.

loss prevention

Swindells touched briefly on loss prevention, saying existing initiatives such as gates on so-called subsidized payments have proven effective.

He said various technology and data-based systems are under development.

“We have weighted racks that can detect behaviors that are more appropriate to someone who might not be paying at the exit, and we also have virtual curtains that can capture and interact with the consumer when we think they need some help,” he said.

“We must keep technology ahead of the problem.

“We must ensure that our team members work in a safe environment and ensure that churn is not only an issue in profit and loss, but also in terms of availability for other consumers.”

Store navigation

Ben Hassing, Coles’ chief digital officer, also took a look at the retailer’s many technology-based advances.

One of these is the inclusion of digital wayfinding into the Coles app; This means customers can create a shopping list in the app and then be shown the most efficient way to select those items based on the store and shelf layout.

“We took the next step and ‘found’ the way to the shopping list by taking it to 15 stores in Victoria,” Hassing said.

“You can have 20 items and we will tell you where to go throughout the store so you can save time while shopping in the store.”

This capability could be further expanded with some form of gamification to be introduced in the future, Hassing said.

It also briefly showcased smart cars. company is testing Instacartas well as electronic shelf tags and “convenience cameras” that appear to provide the shopper with evidence that a product is actually on the shelf.