Northgate Markets Heads to the Cloud
A fast-growing independent grocery store chain turns to an integration PaaS solution to tie together a diverse array of IT and business systems.
By Samuel Greengard
Operating a chain of independent grocery stores in a highly competitive market is an increasingly IT-centric proposition. For privately owned Northgate Markets, which has 41 locations scattered across Southern California and plans to add 100 more stores in the coming year, it's the difference between ringing up impressive results and wilting. "Technology is increasingly at the center of everything we do," explains Harrison Lewis, chief information officer.
In mid-2013, the company—which focuses on authentic and fresh Hispanic food products—added a 375,000-foot distribution center and purchased new distribution and logistics systems to support the rapid growth. The list included Microsoft Dynamics AX for enterprise resource planning and Red Prairie for warehouse management. The goal was to gain a comprehensive and integrated view of the supply chain. However, Northgate Markets ran into roadblocks when it tried to integrate everything from point-of-sale technology to back-end systems.
"Data and information security are critical elements of the business," Lewis states. "It's necessary to support a complex array of business processes that span retail, restaurant-type services and in-store products. We also have a need to support manufacturing, as well as financial services and real estate." The complexities of the business and IT environment are further ratcheted up by the company operating additional stores under different names in Arizona, New Mexico and Texas—and running separate distribution centers in Anaheim Calif., and Phoenix, Ariz.
"We needed to move to an environment where everything operated essentially as a single ERP that could support all the lines of business," Lewis explains. As a result, Northgate Markets turned to SnapLogic, a provider of cloud-based integration Platform-as-a-Service (iPaaS) to create a flexible and agile platform that also supported security and business continuity. Since moving to the cloud solution in October 2013, Northgate Markets has tied together more than 64 integrations using pre-built connectors associated with the SnapLogic Elastic Integration Cloud and SnapLogic Snaps. The entire process took about five months to complete.
Missing Financial Transactions
Prior to installing the system, Lewis says, Northgate Markets sometimes had problems with missing transactions. "In some cases, they would suddenly disappear," he says. Occasionally, this led to out-of-stock items, lost sales and customer dissatisfaction. "We now have a bulletproof system that provides real-time data. If there's an issue we receive an alert immediately and we are able to take action before it becomes a serious problem." The platform has also allowed the grocer to operate a more sophisticated product information system that has built in price optimization capabilities.
"We're no longer simply exchanging data between systems, we're putting it to use in more strategic ways," Lewis points out. The cloud-based environment brokers and routes the transactions effectively at a lower cost than point-to-point integrations. Moreover, the system handles complex data streams that, in some cases, encompass different data formats, such as 12-bit fields, 5-bit fields, text, and UPC codes, which the company must convert to XML and slot into different systems. Another benefit of the iPaaS environment, says Lewis, is a more strategic use of IT resources. "In the past, we used an offshore organization to handle development," he says. "Those costs went away."
About the Author
Samuel Greengard is a contributing writer for CIO Insight. To read his previous CIO Insight article, "Why CIOs Pick Public Clouds," click here.