Woolworths is weeks away from completing a $100 million push to consolidate and upgrade its merchandising software systems, which will make it cheaper and easier to source products and market to customers across all its brands.

The project, known internally as Project Galaxy, has been under way for six years to introduce a new system from SAP to underpin Woolworths’ customer relationship management, performance reporting, buying, and store-ordering processes.

The final stage of the project is a promotions management module. Woolworths has spent the past month training Big W partners to use a new online portal instead of spreadsheets to collaborate on promotional offers.

The promotions application is already used in Woolworths’ petrol, liquor and food businesses, which together contribute almost 90 per cent of the group’s earnings and where Project Galaxy is largely complete.

Bringing Big W on board will make it cheaper and easier for Woolworths to market to customers across the group, regardless of brand, channel or platform.

A Woolworths spokeswoman confirmed that the group was in the final phases of Project Galaxy. The project was initially due to be completed in mid-2014.

While Woolworths has not put a price on Project Galaxy, previous news reports have estimated its original call for tenders to be worth about $100 million. IT services firm Tata Consultancy Services has been working on the scheme.


Project Galaxy is the third and final phase of an end-to-end business restructure called ‘Project Refresh’, which was started by former chief executive Roger Corbett in 1999.

Earlier phases saw Woolworths consolidate and reduce buying teams and stock distribution centres, and – under ‘Project Mercury’ – replace its inventory, distribution centre, warehouse and transport management systems.

As with Project Galaxy, Big W was one of the last of Woolworths brands to be upgraded by Project Mercury. The discount department store is still part way through a multi-year strategic transformation that cost the group $148.2 million in the six months to January 2015.

Corbett’s ambitious Project Refresh shone an international spotlight on Woolworths’ supply chain, which was ranked sixth in the Asia-Pacific region and 57th worldwide in Gartner’s 2014 supply chain analysis.

Analysts expect CEO Grant O’Brien’s 10-year, billion-dollar Mercury 2 project to be similarly transformative, by allowing the group to predict what consumers will buy and efficiently transport products to be collected from wherever customers choose.

“Unlike many other Asia/Pacific retailers that are still developing strategies, Woolworths has already embarked on its supply chain transformation journey,”  Mr Gartner said in its 2014 report.

“With an eye toward the future of online retailing, the ‘Mercury 2′ initiative looks to couple its already capable network with advanced analytics and deeper direct selling expertise to drive the future of retail, and define the evolution of its network.”

Woolworths has invested heavily in new supply chain and analytics technology to support its fast-growing online sales channel, which grew 50 per cent last financial year to account for just under 2 per cent of Woolworths’ $60.8 billion in sales.

The group is Australia’s largest domestic online retailer, and is seeking to leverage its distribution network further in a recent “click & collect” partnership with eBay that will allow eBay buyers to pick up their online purchases from Woolworths and Big W stores.

Woolworths is weeks away from completing a $100 million upgrade to  its tech system which will bring improvements to its supply chain.
Woolworths is weeks away from completing a $100 million upgrade to its tech system which will bring improvements to its supply chain. Patrick Scala
 Extracted in full from the Australian Financial Review.