London Drugs
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Company Overview
In 1945, London Drugs Limited opened a 1,000-square-foot drugstore at 800 Main Street in Vancouver, British Columbia (B.C.). Since then, that small community drugstore has grown into a major retail chain consisting of 55 stores that serve millions of customers across Alberta and B.C. The chain is still 100-percent Canadian-owned and employs more than 6,000 staff. London Drugs has long been known for initiating creative innovations to better serve its customers. In the early 1950s it introduced extended seven-days-a-week shopping hours and discount photographic equipment and supplies. In the late 1990s, it introduced a whole host of new services focused on providing local customers with a superior shopping experience every time they enter a London Drugs store.
Business Challenge
As part of its goal of giving customers the best value for their money, London Drugs is constantly looking for innovative ways to use technology to reduce costs. As the new millennium dawned, the company was performing virtually all of its mission-critical processes - human resources, general ledger, inventory, and merchandising - on legacy applications that were running on an AS/400 computer. The company found that it was missing business opportunities because these legacy applications were outdated, expensive to support, and didn't offer the flexibility necessary for creating a much-needed automated supply chain process.
London Drugs decided to replace several of its existing applications with Microsoft Windows-based applications. Initially the company conducted a thorough technology review to find a single-vendor application suite that would handle all of its business applications. However, because the company has built its business on particular areas of expertise that give it a competitive edge, it decided to use the best applications in each category, rather than choosing a single enterprise resource planning (ERP) solution that might not meet all of its unique requirements.
The solution it chose includes: PeopleSoft Financials and Human Resource applications; Schedule 2000, an in-house scheduling application; DIME, an in-house AS/400 legacy application for warehouse management; and a third-party supply chain application.
The goal of this approach was to have third-party and in-house applications work together seamlessly to automate business processes. In addition, this integration would eliminate errors, such as inaccurate inventory data that could be introduced during manual processes and it would help to reduce operational costs. It also would provide a broader view of inventory across the organization. The company went in search of a robust and scalable enterprise application integration (EAI) solution that would manage the relationships among London Drugs' multiple business process applications. The goal was to integrate the company's supply chain applications with its ERP system and provide a foundation for virtually all of its future integration projects.
The company chose Microsoft BizTalk Server for this task, because it provides a strategic, flexible, scalable foundation for both the immediate project and future projects.
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Solution
The London Drugs solution follows a hub-and-spoke model (as illustrated in the diagram), with BizTalk Server as the hub and spokes that consist of:
| • | Legacy systems on the AS/400 computer, including point-of-sale support, warehouse management, and store inventory management systems. |
| • | Third-party supply chain application, which handles automatic replenishment and order generation. |
| • | PeopleSoft Financials applications, including Human Resources, General Ledger, and Payroll, Time, and Labor. |
| • | Schedule 2000, a time management application for London Drugs staff. |
The integration project team, which included London Drugs, Microsoft Consulting Services (MCS), and PeopleSoft, worked together to implement the new enterprise applications and integrate them within BizTalk Server. Four sub-teams were created to handle each facet of the project:
| • | Third-party supply chain application team - Built adapters to enable the supply chain application to expose and receive Extensible Markup Language (XML). |
| • | Microsoft Consulting Services - Worked with the London Drugs team to determine the interfaces, applications, and adapters that would be needed, and designed the overall architecture for integrating the applications with BizTalk Server. |
| • | London Drugs internal staff - Worked with the three other teams to set up the new applications and define the business process requirements. |
| • | PeopleSoft - Worked with the London Drugs staff to integrate the PeopleSoft components into the solution and to build adapters so that those components could expose and receive flat file XML data. |
The solution uses two key sets of functionality included in BizTalk Server: BizTalk Messaging and BizTalk Orchestration. BizTalk Messaging provides the infrastructure to move and translate messages and documents from application to application. BizTalk Orchestration uses BizTalk Messaging functionality and other included tools to automate complex business processes and to support dynamic business interactions that span organizations, platforms, applications, and people.
To achieve this integration and to streamline data interchange, each application needed to provide only one set of XML interfaces to communicate with the BizTalk Server hub, rather than having to integrate each application directly with every other application. The interface points for each application are exposed as XML documents. After identifying all the interfaces and the fields required to exchange data with each of them, the solution team created BizTalk Server schemas to match those interfaces.
The project presented its share of challenges. The PeopleSoft applications and the supply chain application were being deployed for the first time, so the solution team had to test them individually and integrate them with BizTalk Server. At the start of the project, in late 2000, few applications exposed XML, so the teams had to write adapters that enabled each application to send and receive XML data through BizTalk Server.
"Today PeopleSoft exposes XML, as do a lot of applications, so if we were starting this project now we'd likely already have these interfaces done for us," explains Scott Riddell, London Drugs Manager, Solutions. "However, at the time we had to build all the adapters from scratch."
"The bulk of the effort was building the adapters and exposing the XML," explains Steven Barker, MCS Senior Consultant. "Once the adapters were written so that XML could be sent or received from each application it was really easy to set up BizTalk Server to complete the integration. Only about 20 percent of the integration effort was spent setting up XML mapping and routing in BizTalk Server."
Building the adapters took from four weeks to five months, depending on the application. Then it took about six weeks to set up the BizTalk Server messaging and BizTalk Orchestration once the schemas and XML messages were ready. When the solution team had completed those tasks, they started intensive rounds of testing, fixing, and retesting.
"The testing is very complex for a supply chain solution, because all the components are interdependent," explains Riddell. "If you have a purchase order that's initially used for one application but needs to get to PeopleSoft General Ledger [GL], and at the same time to get to the AS/400, which then has to return something to the GL application, a sequence of things has to happen for one test to be completed correctly. If one component fails, the test has to be run all over again."
To ensure high availability and guaranteed delivery time, the hardware configuration consists of two, two-node clusters. BizTalk Messaging runs on both clusters and BizTalk Orchestration runs on the passive node of one of the clusters. By supporting the cluster services in Microsoft Windows 2000 Advanced Server, BizTalk Server ensures high availability of London Drugs' mission-critical applications. The BizTalk Server-based server computers are IBM four-processor computers with 512 megabytes (MB) of RAM. The BizTalk Server databases run on a separate two-node cluster that consists of eight CPU servers with 1 gigabyte (GB) of memory connected to an IBM storage area network.
The initial project of implementing the new and existing applications through the BizTalk Server hub was completed in five months.
The current throughput ranges from 350,000 messages to 500,000 messages per day, with a peak of 2.7 million messages per day. The solution will eventually scale out to handle several millions of transactions per day.
Business Benefits
In deciding on an EAI solution, London Drugs needed to meet the immediate need for its supply chain integration, but also to provide a solid foundation for integrating additional business systems in the future. It chose BizTalk Server specifically for its:
| • | Easy integration. BizTalk Server makes it easy to integrate any application that can expose XML. |
| • | Business Process Orchestration. This feature provides a powerful method for complex document processing. The administrator creates a diagram that maps out the multiple steps that a transaction, such as a purchase order, must complete. "While we aren't using BizTalk Orchestration a lot yet, it is definitely a technology that will provide a lot of value as we integrate more functionality into the system," says Ole Andersen, London Drugs Manager, Strategic Innovation. |
| • | Ease of management. A comprehensive set of management and monitoring tools enable London Drugs' administrators to monitor and respond to thousands of events related to all business processes and integrated applications, so that they can help to avoid problems. Administrators are able to control the flow of messages through a specific interface, easily add a new application publisher or subscriber, and plug in a new interface. They can also use BizTalk Orchestration to easily adjust to changing business decision logic. |
| • | Scalability. BizTalk Server can scale up to support 32-way processors and scale out to multiple computers to ensure high availability and throughput. These features will support London Drugs' continued expansion in both its stores and in additional applications it may use to produce a much higher throughput volume. |
| • | Processing Time Reduced 10 Percent |
The new supply chain systems and processes that London Drug is implementing, with the support of BizTalk Server, will help reduce costs and labor through:
| • | Reducing manual processing and the errors that come with it. |
| • | Lowering holding costs by increasing the speed at which inventory is moved and by reducing the amount of standing inventory. |
| • | Increasing revenue by ensuring more dependable inventory stocking to match actual transactions. |
More Effective Decision Making
London Drugs is using the easy-to-manage, flexible EAI infrastructure of BizTalk Server to gain a more complete picture of all its transactional and business data. This improved visibility is enabling decision makers to perform more powerful analyses to create more accurate business forecasts. In addition, the ability to eliminate low value transactional activities through a more automated system frees up more time and resources for analysis and strategic activities.
The faster information turnaround supported by the integration of all key systems provides London Drugs decision makers with a nearly real-time view of inventory across the enterprise. This real-time information enables them to adjust more quickly to high-volume situations, such as sales, so that they can meet customer demand more efficiently.
Maximum Flexibility with Minimum Cost
By enabling London Drugs to use the best applications for each phase of its business, BizTalk Server is helping the company continue to build and maintain a competitive advantage in the market. At the same time BizTalk Server centralizes the application integration in a separate layer that communicates through XML, enabling London Drugs to take advantage of the synergies of sharing information among applications and business areas without the extensive, costly effort of point-to-point application integration.
The hub-and-spoke model means that London Drugs needs to build or purchase only one adapter per line-of-business application. New applications can be added easily, which reduces development, integration, and maintenance costs, increases application choice, and provides more vendor flexibility. This strategy will also allow current and future London Drugs business areas to select the most appropriate line-of-business applications for their needs. And it will enable the company to change the applications it chooses, over time, to maximize cost-effectiveness, features, or business relationships without having to worry about prohibitive integration costs.
The Future
London Drugs will continue to expand the use of BizTalk Server to integrate additional internal, business-to-business, and customer-facing solutions into its retail sites. The expansion of this solution is expected to continue to enhance the company's decision making and further reduce its total cost of ownership for its business systems.
For More Information
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For more information about London Drugs products or services, visit the Web site at:
http://www.londondrugs.com/
