Eckerd set to roll out supply chain overhaul - Brief Article - Statistical Data Included

PALM HARBOR, Fla. -- In the midst of challenging times at both Eckerd and its parent company, J.C. Penney Co., more than 1,100 Eckerd employees gathered here in mid-April for the drug chain's annual Directions meeting and trade show.

What they discovered is that Eckerd is ready to roll out Quantum Leap--a project designed to overhaul its supply chain--and the chain has Penney's full support as it moves ahead on plans to close roughly 300 stores this year and reverse some disappointing operating profit trends. The chain also is searching for a new chief executive following last month's departure of Frank Newman for the online retailer more.com.

In a show of support for Eckerd, three top-level Penney's executives attended the Directions show this year: James Oesterreicher, chairman and chief executive; Donald McKay, executive vice president and chief financial officer; and Gary Davis, executive vice president and chief human resources and administrative officer. Davis and McKay were first-time attendees at Directions.

"Sometimes we try to give reasons why and how adversity makes us stronger," Oesterreicher told attendees at his opening address. "Quite frankly, I've had all the adversity I want." He also acknowledged that the chain is likely to face future headwinds as its continues working on leadership and operational issues.

John Fesperman, Eckerd's interim president and chief executive, was the first to mention the Quantum Leap initiative, which then became the topic of conversation throughout the three-day meeting. The multi-million dollar Quantum Leap project is a store replenishment and merchandising initiative that will change the way Eckerd stores are stocked and replenished, executives said.

A centralized store-replenishment system and realtime information will replace the current system of store ordering of basic, promotional and seasonal merchandise. Quantum Leap will require the integration of Eckerd's existing applications into new ones, while eliminating older applications.

Quantum Leap, which was brought to Eckerd by Retek, a Minneapolis-based software and technology supplier, is intended to eliminate obsolete inventory and improve turns. It also should help reduce the amount of time product sits in warehouses before landing in stores. Doug Sheasley, Eckerd's vice president of merchandise replenishment, will head up this effort and will be the project director of Quantum Leap. He noted that Eckerd's goal is to be on par with Wal-Mart. "That's where we're headed with Quantum Leap," Sheasley said.

The program is expected to be implemented at Eckerd headquarters in the third quarter with pilot store rollout in April 2001 and national store rollout in 2002.

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