Saturday, May 21, 2011

The Case Against Category Management – SRDC and Retailers

Note: SRDC is an acronym for StoreReport Data Centers.

I have broken the diagram from the previous post into three sections. SRDC-Retailer, SRDC-Stores, and SRDC-Suppliers. You can view the SRDC-Retailers diagram at

In a pure Cloud environment, the location of software and hardware is unclear; but in our case, our retailers have no software or limited software at their headquarters; except in rare cases where retailers are downloading data to do their own spreadsheet analysis. Any hardware at headquarters is limited to simple PCs capable of accessing the Internet, and printers which connect to the SRDC through simple Telnet communications provided by Microsoft Windows. However, simple peer-to-peer office networks are commonly used to accommodate intercompany connectivity. In short, retailers may use whatever form of IT infrastructure they require, but very little technology is necessary to work on the system; e.g. a cell phone, capable of running a browser, can be used to affect price changes in stores.

Retailers may access the SRCD computers to perform their bookkeeping task, such as Accounts Receivable, General Ledger, Bulk Plant Inventory Control, Accounts Payable, Category Management and Fuel Management for their stores and consignees, Payroll, Fuel and Sales Tax accounting, etc., etc.

Data resides on SRDC servers and is continuously backed up throughout the day in case of some catastrophic event. Through a process called ‘virtualization’, infinite growth and expansion is handled by the SRDC so retailers need not be troubled with buying new storage equipment or expanding networks at their sites. Older data, e.g. one to two years-old is moved to near-line storage, which means it is not present on the working SRDC computers, but exists in a carousel of backup media which may be recalled at will. Extremely old data, typically more than two years-old, is stored in SRDC offsite vaults which may be recalled to near-line storage and transferred to the working SRDC computers when required.

In addition to common accounting and bookkeeping task, data collected from the stores (to be discussed in the next article) is available for retailers to work on and ‘rolled-into’ the retailer’s bookkeeping system; purchase invoices created at the store level (and corrected if necessary) are viewed and accepted for payment. Retailers may assist the stores in managing stock; make price changes and add new items to stores’ POS systems. Retailers are able to view the disposition of inventory in the stores which is updated in five minute intervals and they may use SRDC tools to perform forecasting exercises and tune-up items for maximum performance.

The important thing to remember is, the retailers do not have ‘direct’ access to stores nor do stores have ‘direct’ access to headquarters. By managing the retailers and their stores in separate areas on the SRDC, it may appear to both parties they are in fact integrated, but the integration is accomplish at the SRDC which allows levels of security and customization that would not be possible, or at least extremely difficult otherwise. Retailers are commonly given access to all of the stores’ data, whereas stores are rarely given access to headquarters data. Over the past decade, we have experimented with various designs, but this one seems to be the best that provides both security and flexibility.

Note: We also provide our retailers with a proprietary credit card system, similar in nature but entirely different from other proprietary card vendors, which is out of the range for discussion in this article.

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