I am attending webMethods Integration World this week and blogging live from the sessions. Next up was Peter Van Kralingen of Ahold, a webMethods customer and a large Dutch retailer.
First a video case study. Ahold has developed a totally automated supply chain and do not have anyone ordering products from stores - the data from the point of sale drives the whole chain. They have thousands of stores and used automation of supply chain to reduce prices and grow business. They were able to change the way stocked stores from guessing to responding to what customers buy. webMethods connects stores, head office, suppliers and distribution centers. Ahold uses the information flow this enables to suppliers to put onus of keeping a product in stock on the suppliers.
Peter came on and talked about how Ahold's strategy focuses on high volume per square foot, no back-room inventory (no spare space in stores) and responding quickly to customer demands. Ahold had focused on improving their cost base and then used the proceeds to drive down prices and drive up both volume and profitability. webMethods was purchased to develop a platform for ongoing improvement of core business processes. Ahold tried to move from building large custom solutions to integration of best-of-breed solutions (whether purchased, built or legacy). This focus on integration is what they feel gives them a competitive edge as it gives them the flexibility to bring to bear a mixture of solution components and so focus on the approach that will deliver the best value to their business.
Peter discussed both the technical and (significant) organizational challenges of this approach and how it changed the overall approach from a design/build mentality to a portfolio management/process-centric mentality. He also discussed how this is an evolutionary approach and that evolutionary approaches are forever - they are not "once and done" but must become a part of the company's DNA.
Nice story of the value of integration - Ahold has 700 stores, up to 8m messages a day, 30,000 skus and 100 suppliers managing their own inventory in stores so this is a non-trivial solution! I do wonder about restocking rules, stock level rules, rules about aging of products, rules about responding to weather etc. How are these rules implemented? Hopefully not in code... I also wonder if they could do more by embedding some predictive analytics into their process. Being responsive clearly works for them but perhaps predictive responsiveness would be even better.
I am speaking tomorrow at 2:45pm on "Automating High-Volume Business Decisions within an SOA"
Technorati Tags: BPM, BPMS, service, SOA, integration, webMethods
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