Supermarket giant, Coles has inked a strategic deal with Microsoft as a part of its digital transformation strategy to use artificial intelligence and cloud technologies.
Coles is currently in the process of implementing Dynamics 365 in selected business units and Office 365, transitioning older systems on to the Azure cloud platform.
The project encompasses a mixture of Coles’ internal resources, supported by Microsoft and partners. For example, Accenture is assisting the Dynamics 365 roll-out for the meat manufacturing business unit.
The supermarket also updated it back office applications through using SAP S/4HANA ERP platform, which was announced in February. as part of a drive to optimise its operations
Data, artificial intelligence, machine learning, personalisation and cloud technologies were some of the items on the supermarket’s agenda to help optimise its supply chain from picking to pricing efficiency.
The supermarket chain maintains more than 40,000 products; 115,000 team members; a network of 2450 physical stores, generating more than $39 billion in revenue.
Both Coles and Microsoft will also work together on innovative digital solutions to help deliver improved customer insights about food provenance and in-store support.
Coles chief information and digital officer Roger Sniezek is one of the leaders in the supermarket’s massive digital transformation project taking shape across the business, which is expected to deliver $1 billion in savings by 2023.
His team is made up of 700 IT professionals, of which 100 have already been trained by Microsoft in cloud technologies. On top of this, Coles employs about 35 data scientists who analyse billions of customer transactions per year.
Sniezek pointed out each individual store handles about 20,000 different items, some have specific requirements such as temperature and legal compliance too. On average, the 105 year-old chain processes more than 21 million transactions per week in store and online.
“Put that together with thousands of different suppliers, and the fact these things are flying off the shelves at a rate of knots and so need to be replenished in real time, and you start to get an idea of the complexity that comes into our business,” he said. “Then you can start to think about how you deliver all that in an efficient and engaging manner for our customers.”
As part of the transformation remit, the supermarket has already inked deals with Ocado to build automated fulfilment centres in Sydney and Melbourne, and with German logistics automation expert, Witron was appointed to build automated warehouses in Brisbane and Sydney to handle grocery distribution.
Coles chief operations officer Matt Swindells added it was taking a ‘two-pronged’ approach to innovation one through the types of partnerships it has established and other is figuring out what problems the chain needs to address.
“How do we partner and bring together the best technology minds with the best experienced retail operators and mash them together, to come up with digital solutions for really difficult retail problems?” he said.
In using AI and machine learning within its environment, Swindells pointed areas such as the energy consumption particularly within its refrigerators and in-store ovens for chickens.
“Previously operators would have had a gut feeling and what they know from experience. Now you can put data scientists and advanced analytics into that and really optimise a model. At scale, those small improvements in operation can have a material, commercial impact.”