Coles drives IT 'harder'

Coles parent Wesfarmers today said it was "driving" the revamp of its supply chain and associated IT systems "harder" as it rolled out automatic stock replenishment systems across the nation.

At his company's half-yearly financial results briefing today, Wesfarmers chief executive Richard Goyder said the auto-replenishment system, which he described as the interface between Coles' systems and its supply chain, had been rolled out to 44 stores and was on track to reach a total of 200 stores by the end of the company's financial year in mid-2010.

"[Coles chief executive] Ian McLeod and the team have been very careful to ensure we get it right," Goyder said. "But as we get it right, we're seeing benefits through the stores and supply chain."

In a slide entitled "Driving Coles supply chain & IT harder", the company said the roll-out had already resulted in reduced lead times from distribution centres to stores.

The company has also rolled out its self-scan checkout systems in nearly 70 stores, although it did not say how many more were planned. Coles has approximately 700 stores at the moment.

The speed of the roll-out might have surprised some, because Goyder had said August last year that McLeod had not believed the company was capable of introducing auto-replenishment at that point.

Coles' back-end IT upgrade of its supply chain systems has long been seen by the retail industry as a critical piece of the puzzle in the supermarket chain's struggle to match the success of long-time rival Woolworths.

Woolies' development of its AutoStockR and StockSmart systems occurred in the years after the appointment of the company's then-chief executive officer Roger Corbett. The executive has been credited with using the stock systems to take massive costs out of the company's bottom line while delivering fresher supplies in a more efficient manner to customers.