Question: HS plc is a large quoted company, which owns and maintains 42 large supermarkets in the country in which it operates. Each supermarket sells a very wide range of food and household goods to the general public. There is a high level of competition from other supermarket groups. HS plc has tended to be the industry leader in computerisation and has a corporate objective to offer the best computerised sales service to its customers. HS plc has introduced some computerisation in the stock and ordering systems, although there is no integrated system. Stock levels are high, being three days for perishable goods such as milk and up to 28 days for tinned goods. This has resulted in a high stockholding cost for the company.
HS plc is now considering an investment of over £50 million in the latest electronic point-of-sale (EPOS) systems to maintain its competitive advantage. The databases associated with the system will be able to store information relating to stock levels of each product line, cash and bankings, and even sales by individual customer. Information on HS plc's competitors indicates that they are also considering similar systems, but it will take at least two years to implement them. Because HS plc has already produced the initial feasibility study and systems specification, the company could have its system running within ten months. The board of HS plc is meeting tomorrow to make the final decision on the investment. The managing director has indicated that he expects the investment to take place, but he would like to see a list of the benefits of the EPOS system, from both the strategic and operational viewpoints.