IT Cleanup, Aisle 3

Migrating to a single technology platform and translating SAP transactions onto handheld terminals were high on Wawa’s IT shopping list. It checked off both with SAP.

One thing you’re sure to find at a Wawa store is variety. Wawa offers seven kinds of bagels; fresh sandwiches, soups, and salads; hot breakfast selections; and all the items you’d expect to see on the shelves of a full-service convenience store.

Wawa – a Native American word for “goose” – is named for the Pennsylvania town where the company’s owner started a milk processing plant in 1902. Wawa opened its first food market in 1964, and since then, its customer-pleasing assortment has helped it expand to more than 560 stores in Delaware, Maryland, New Jersey, Pennsylvania, and Virginia.

As the company grew, though, one area where variety started to lose its charm was information systems. Last year, Wawa was using more than two dozen different management applications.

When the IT department first integrated those packages, they served the company well.

“But as the business continued to grow, it became more complex to manage that environment,” says Michael Kinzly, Wawa’s senior project manager. “We had to constantly review, update, and change interfaces to continue supporting the business.”

When it came time to update those legacy systems, Wawa executives chose unity over diversity, and implemented an end-to-end integrated solution, SAP for Retail.

Although the enterprise resource planning (ERP) system can handle many aspects of Wawa’s operations, the business case for implementing SAP for Retail focused mainly on improving store operations, Kinzly explains.

No Accounting for Taste

The new system, for example, supports a switch from a retail accounting method – which reckons the value of an item at its selling price – to a cost accounting method, which pegs the value to the wholesale cost.

That’s a more accurate method for figuring out, for example, the consequence of tossing an unsold sandwich – which might sell for $2 but costs much less in ingredients.

“Now we have better visibility into the dollar-cost impact of spoilage,” Kinzly says.

Wawa’s old software was not suited to its increasingly important food-service business in other ways as well. “Our legacy system didn’t offer an effective way to manage information about sandwich ingredients,” Kinzly says.

SAP, by contrast, uses data captured at the time a customer buys a sandwich to determine how much bread, lettuce, and other ingredients are consumed, and when it is time to reorder.

In one area, however, SAP’s software couldn’t do everything Wawa required.

“SAP at this time does not have a mobile device application suited to our in-store needs for inventory control and mobile functions,” says Michael Shanahan, IT systems engineer at Wawa.

“Mobile devices, which we were using with our legacy application, are an important component of our in-store application. We needed the ability to extend SAP down to the mobile devices.”

So Wawa’s IT team asked Catalyst International, an SAP partner, to implement an in-store wireless data solution based on the ERP vendor’s SAPConsole technology.

The SAPConsole application comes with SAP for Retail and other versions of SAP’s R/3 suite. It translates SAP application screens from the format used on a desktop display to a format compatible with the display on a mobile data collection terminal.

This allows workers to conduct certain SAP transactions, mainly focused on warehouse activities, on the handheld devices.

Catalyst has taken the concept further by translating a host of other SAP transactions for handhelds, including additional warehouse functions, as well as inventory management, production control, and asset management functions.

Inventory transactions that aren’t available in the standard SAPConsole, but which Catalyst offers, include: goods receipt for purchase orders; goods receipt with putaway; putaway by material document; storage bin inquiry; and production order confirmation.

Catalyst has also enhanced the warehouse management transactions that come built into SAPConsole, says Chris Gregory, regional sales manager for Catalyst’s Newtown, Pa., office.

“We’ve optimized them to have the same look and feel,” he explains. In the Catalyst version of SAPConsole, for instance, one function key triggers the same action in every screen.

In addition, Catalyst can help companies merge multiple SAP transactions into a single transaction on the handheld terminal – combining the goods receipt and putaway functions, for example.

“The transaction first performs an inventory management posting against the purchase order (PO) with reference to either a PO or a delivery, and immediately launches the user into the stock placement function,” Gregory explains.

Catalyst also serves as systems integrator for companies that want to use its version of SAPConsole, providing the necessary hardware, software, and installation services.

Catalyst for Change

Wawa and Catalyst began their partnership in February 2006.

“Catalyst worked with the handheld initiative, provided the blueprinting service, helped Wawa implement SAPConsole, and offered related go-live support,” Gregory says.

The new system runs on a server at Wawa’s headquarters, connected to each store over the company’s communications network infrastructure. The stores use handheld terminals from Symbol Technologies (now part of Motorola). As of January, Wawa was operating the new system in 23 stores, with plans to roll it out to every store by the end of 2007.

“We’re still working out some minor issues,” Kinzly says. “This system marks a huge change management paradigm at the store level.”

Wawa’s store associates use the handheld terminals for functions related to inventory control and information gathering – such as applications for cycle counting, receiving goods from delivery drivers, and modifying purchase orders generated by SAP – as well as some ordering functions.

“The handheld terminals work well for detailed activities, such as when an associate works with a driver to scan in a delivery, or checks price and/or inventory levels on warehouse shelves,” Shanahan explains.

SAP for Retail allows users to perform such detailed functions on a desktop PC, but it took Catalyst to move these capabilities to handheld devices.

Keep it Simple

As they worked on the handheld applications, system designers at Wawa and Catalyst kept in mind that practically any store associate in the company might need to use the handhelds. They put a lot of effort into designing the transaction screens so users wouldn’t require elaborate training.

“The idea of keeping the design familiar and simple was very important,” Kinzly says.

Because Wawa is still rolling the new software out to its stores, it is too soon to measure the benefits it provides, Kinzly says. But Wawa stores already using SAPConsole are experiencing improvements.

First, SAP now supports two handheld devices per store, compared with the one device the legacy inventory system could accommodate. That means, for example, when a route delivery driver walks in, an associate conducting a cycle count doesn’t have to drop everything to scan new items into the system.

In fact, counting the computer in the back room, the new software provides a total of three independent workstations – a big improvement over the old system.

“Before, when we were using the handheld, the PC in the store was locked down. It limited the store to just one function,” Shanahan says. With the new implementation, the PC and the two handhelds function independently.

The new system also streamlines a variety of in-store transactions. Under the old system, many functions required users to access both the PC and the handheld computer.

“Associates would scan on the handheld, and then have to go back to the PC to complete the transaction,” Shanahan recalls. “With this design, we can start and finish a transaction completely on the handheld, which eliminates running back and forth to the office.”

One main benefit of Wawa’s move to an ERP system is its ability to collect more detailed information, and collect it early on.

“The handheld application is a key part of that, because it allows the stores to collect a lot of data efficiently,” Shanahan explains.

“One main concern in our operation is the amount of time it takes associates to perform tasks, and we budget time tightly,” he continues. “Even gaining one or two minutes on a process is considered a big win.”

Beyond individual store operations, the new system will also help Wawa hone its corporate strategy.

“We’ll have visibility into what products are selling well in different markets; we didn’t have that in the legacy world,” Kinzly says.

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