Skip navigation
Ex-CIO Drives IT Progress as President

Ex-CIO Drives IT Progress as President

One of the mantras of retail IT departments is that for a major technology initiative to work, it needs the wholehearted endorsement of senior management. At E.W. James & Sons, Union City, Tenn., senior management support for IT projects is not a problem, since its president, Kenneth Pink, is a former chief information officer who sets most of the IT strategy for the company.

So as 76-year-old E.W. James proceeds with an ambitious computer-assisted ordering (CAO) project at its 18 conventional supermarkets — a program requiring some major cultural shifts in store practices — “there is pretty good senior management support,” Pink said.

Prior to joining family-owned E.W. James in 2004 as chief operating officer and becoming president in 2008, Pink spent more than 20 years in IT, as an executive with Tomax, a software provider based in Salt Lake City, and before that as the CIO of Harmons, a 13-store chain also based in Salt Lake City. He also worked in retail technology for wholesaler Fleming Cos.

With that background, he noted, “you know what's possible with technology and you're kind of BS-proof from four-color brochures.”

Pink is applying his IT savvy now to the CAO project, which is already two years old but is entering the rollout stage. All 18 stores have implemented a perpetual inventory system — a necessary precursor to CAO — in the dairy, frozen and grocery departments.

Three of the 18 stores have gone live with CAO in dairy departments over the past two months, and the rest will follow suit by the end of June, he said. A single-vendor specialty food section is also using CAO in one store, and the bread section in all stores is next in line for CAO. E.W. James plans to roll out CAO to the grocery and frozen departments before the 2010 holiday season and the bakery, deli and meat sections next year. (E.W. James also runs six Sav-A-Lot stores and a hybrid convenience store/supermarket that are not part of the CAO program, as well as a gift store and a soon-to-reopen restaurant.)

More than most independents, E.W. James has embraced the possibilities of social media vehicles like Facebook, Twitter and blogging, all of which are accessible through the company website,

For taking on automated store ordering and taking advantage of social media, E.W. James has been selected as the winner of SN's 2010 Technology Excellence Award in the independent category.


Two years ago, Pink decided the company should focus on improving its management of inventory. He chose a CAO system from his old company Tomax as the first phase of the inventory management effort. (He did not provide its cost.)

Already, the CAO system has reduced dairy out-of-stocks in two of the three stores using it by a minimum of 75% and boosted sales by 3%, Pink said, adding, “It's early in the process, but those are startling results.” It also prevents the other extreme — too much safety stock and potential waste — from taking place, reducing milk quantities in one store from 150 gallons to 60. When the CAO system is fully deployed, a 15-month ROI is expected.

The CAO system automates store ordering by analyzing three years' worth of sales trends, including regular, promotional and seasonal pricing, and incorporating other factors to produce a forecast of demand. That forecast is married to a snapshot of store inventory — perpetual inventory — to generate a recommended order. E.W. James is sending automated store orders to its wholesaler, Associated Wholesale Grocers, Kansas City, Kan., as well as to DSD vendors.

For many retailers, the discipline and cultural changes inherent in perpetual inventory is the hardest part of CAO and the reason many have avoided this ordering method. “To properly do CAO, we had to get through the discipline of perpetual inventory,” which has taken two years, Pink said. The CAO system “needs perpetual inventory to be 100% accurate.”

The biggest challenge in achieving perpetual inventory was changing the method for tracking product transfers between departments from paper-based to electronic. The electronic method, which uses handhelds and technology from Softechnics, Akron, Ohio, is now rolled out in the 18 stores; it's used for store receiving as well. Pink also made some changes in his POS system to support perpetual inventory, namely turning off department and quantity keys.

E.W. James plans to deploy another Tomax system, Performance Management, which sends tailored alerts to specific employees on handheld devices.

Besides CAO, E.W. James has made a mark over the past year with its aggressive social media program, which includes Facebook, Twitter and a blog. Thus far, the retailer has 800 fans on Facebook and 126 followers on Twitter as well as an email list of about 4,000 shoppers.

E.W. James uses Facebook, Twitter and email to instantly alert shoppers to produce discounts in its Market Busters program, which features specials that occur too unexpectedly to be listed in the company's regular advertisements. Since introducing Market Busters, produce sales, which had been declining 4%, are up 2.23%, Pink said. The blog and Facebook page also offer company news and events, recalls and customer questions (and responses).

They key to making social media a successful venture is to give it constant attention, said Pink. “If you just stick it up there and hope for the best, it won't do anything.”

TAGS: News SN Awards