Daiei Incorporated

---

PRIMERGY Linux based Wireless Mobile Terminal System revolutionizes ordering and inventory at 346 Daiei Group stores

"New system enables ordering and inventory checks to be completed in-store, significantly improving the timeliness and accuracy of stock availability and increasing store business.

“With system architecture designed by FUJISOFT DIS Company Limited, and Fujitsu Group’s all-round support; 1700 servers and 6000 wireless terminals were introduced in all stores in just 6 months.”

[The] Daiei Incorporated (abbreviated to Daiei) under their slogan “The Delicious Food Mart” is continually seeking efficiency improvements in their in-store operations. By introducing wireless mobile terminals to all 346 stores across Japan, Daiei was able to remove guesswork and enhanced operational efficiency in product availability and sales. Importantly they have achieved greater process accuracy in orders, deliveries and price management. Supported by Fujitsu’s PRIMERGY servers and with FUJISOFT DIS in charge of system integration, the enabling systems use Linux/Open Source Software (OSS) to reduce costs and achieve high reliability.

Too many daily journeys between store and warehouse

Receipt of goods, restocking, price updates, and ordering are indispensable operations in the day to day business of retailing. “In reviewing our current processes we saw we needed to achieve more efficient operations and improve the accuracy of our store businesses,” said Mr. Murasaki, Assistant Manager at Daiei’s System Distribution Department. Since the late 1990’s offline terminals based on memory cards had been used for store operations. However, memory card capacity was stretched as necessary information for goods restocking had grown to nearly 20MB. The low efficiency of this process also became noticeable, with it taking as long as 15 minutes to read the data on the warehouse server. “With daily perishables like milk running out of stock several times a day, staff had to go back and forth between the store and warehouse many times.” Mr. Murasaki said. In addition, operational workloads had increased from the need to correct inventory valuations, print new price cards for pricing revisions, and handle returns. This placed a heavy burden on the storefront. As a result Daiei planned for system reform and the new store operation project commenced, with installation targeted at mid 2005.

Key Introduction Points

Total support from Fujitsu, including wireless mobile terminals

Daiei began system validation testing of the revised business operations in October 2004 at 5 mid-sized stores located around Tokyo. Migration from UNIX to an open platform made up of Linux and PRIMERGY servers was selected in consideration of future scalability and cost reduction. System data was previously shared offline, but now it was migrated to WindowsCE based mobile terminals with 10.4 inch TFT LCD and wireless LAN connection. Fujitsu proposed a total solution including full support for the new system, and the wireless mobile terminals. Mr. Kuroki Yoji, Development Department Manager, FUJISOFT DIS said, “In order to address faults swiftly, proactive onsite technical support was offered by Fujitsu’s product division. A support center also rapidly took care of bugs even in the open source software.”

Based on the results of the above pilot, migration of 346 stores nationwide took place from July 2005 to March 2006.

System Outline

Open source enabled effective cost performance improvements

Leader of the installation project was Mr. Sasamoto Hiroshi, Operations Reform Manager at Daiei. He created a special division made up of experienced staff from stores and head office products division. Staff at each store where also given about 2 weeks’ training. As a result, the installation across all stores was properly completed in just 6 months.

The restructured store operation system has an elegant and simple configuration based on terminal servers that run the wireless mobile terminals. A physical server is used to manage foodstuffs while a virtualized (software based) server is used to manage non-foodstuffs. Both use the Red Hat Enterprise Linux operating system, while the terminal server uses Window Server 2003. Use of open software continued with PostgreSQL introduced as the database server at time of migration. PRIMERGY TX150 was chosen for the hardware due to its excellent cost performance and reliability. “In order to ensure reliability, the system has a duplex configuration consisting of an operating and a standby server. This enables undisrupted operation and improves usability without increasing costs from clustering,” said Mr. Kuroki. Cost of development was also kept down by the ability to migrate part of the former UNIX batch applications to the new system.

Expectations and Future Expansion

With back-office work reduced by 227 hours monthly, staff are more able to focus on store business.

As a result of the installation and use of wireless mobile terminals and the new system in all stores, business operations have become much more efficient. Even with price updates, inventory valuation can be corrected on the spot, and new price cards printed using a handy wireless connected printer. All related work processes can now be completed in-store, with time spent on back-office tasks shortened by approximately 227 hours per month per store. “With the time saved, staff can spend more time understanding local needs generated by nearby events and changes in weather, and create solutions that improve store business,” Mr. Sasamoto said. Communication with products department at head office has also improved; with decisions on pricing and product sales quantities more easily and accurately determined. As a result, overstocking and shortages have been reduced, adding their improvements in company profits.

The painless and worry-free process Daiei experienced with this Linux installation, has spurred them to review and validate a new POS system using infrastructure based on Linux. With its new highly reliable work process infrastructure, Daiei feels a change in atmosphere where new ideas from company staff, on work efficiency and productivity, can be generated. “We will expand the Linux system while making certain of returns on future investments,” Mr. Murasaki and Mr. Sasamoto both stated. A new Daiei is emerging from this system; a Daiei supported by Fujitsu and Linux on PRIMERGY.

The Daiei, Incorporated - Overview
Flagship Store:4-1-1 Minatoshima Nakamachi, Chuo-ku, Kobe-shi
Headquarters:2-2-20 Toyo, Koto-ku, Tokyo
Established:1957
Capital: 56.5 billion yen (End of February 2006)
Employees: 6,979 (End of February 2006)
Sales Revenue:1,175.5 billion yen (End of February 2006)
Business Profile: Retail

Homepage: Homepage of The Daiei, Incorporated

FUJISOFT DIS Company Limited - Overview
Headquarters:NK Building, 2-7 Kandasudacho, Chiyoda-ku, Tokyo
Established:1985
Capital: 2.3 billion yen (February 2006)
Employees: 453 (February 2006)
Sales Revenue:28.7 billion yen (February 2006)
Business Profile: Provide systems for retail industry, card business industry and CVS industry Complete out-sourcing service provider (Planning, development, maintenance and operation)

Homepage: Homepage of FUJISOFT DIS Company Limited

---