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Retailer streamlines credit authorization.


Keeping retail-store customers satisfied depends on a lo of different factors, not the least of which is minimizing waiting lines at cash registers by streamlining the credit and check OK procedures.

Another way is making sure the products customers want are always in stock.

Montgomery Ward & Co., the ninth largest retailer in the United States, with $5.03 billion in company sales, has achieved both objectives by developing a wide-area SNS network linking all of its 334 stores in 39 states through a fault-toler-ant on-line transaction processing platform.

All customer transaction and inventory data for the entire network pass through the host and a set of applications, together called the Advanced Data Communications Utility (ADCU).

"We wanted to achieve higher availability for ADCU applications than we were getting with our two existing networks--one based on an IBM host, the other on an aging NCR system," explains Mel Mizicko, manager of quality assurance and data administration, and ADCU project manager.

"We needed fault tolerance because all transaction processing is done centrally, and if we go down, so do all of our stores."

The company consolidated operations on a single network based on two fiber-optically linked eight-processor Non-Stop VLX computers from Tandem Computers Inc., Cupertino, Calif. The company also uses a third, two-processor NonStop VLX computer as a test machine.

Besides cutting communications costs by more than $150,000 each month, the renovated ADCU has enabled the company to reduce transaction time, improve credit and check authorization procedures, increase inventory restocking efficiency, and reduce fraudulent merchandise returns.

In designing the ADCU, CACI International, Arlington, Va., the systems integrator for the project, established a set of stringent performance requirements.

One of these was the ability to support all appropriate SNA Logical Unit sessions types between the Tandem processors and 9500 logical entities--including 650 Nixdorf in-store controllers connected to 15,000 cash registers and more than 1000 CRTs.

The ADCU is also linked to Ward's IBM 3090 through seven high-speed channel-attached communications controllers.

The communications front end to the ADCU, called Mercury, depends on Tandem's SNAX/XF to facilitate communications between all Logical Units and the tandem computer.

Mercury also prioritizes and controls transaction flow between POS (point of sale) controllers and the network processor, giving highest priority to credit-authorization transactions.

Credit Is Key

"Credit authorization is a key application of the ADCU," Mizicko explains. "It maximizes customer service and minimizes potential losses from the use of arbitrarily imposed floor limits."

Credit-authorization efficiency is so critical to Montgomery Ward that CACI designed the ADCU to perform at a sustained peak rate of 24.7 credit-authorization transactions per second with an average response time of 1.3 seconds for 65% of these transactions.

To expedite credit authorization for Ward's private-label credit cards, the ADCU is linked to another Tandem system at a credit-authorization bureau in Atlanta, via Tandem's Expand networking software.

Expand software allows the transparent distribution of databases and applications over Ward's wide-area network.

It also features best-path routing to minimize transaction time.

"Because Expand software is not a polled environment, response time is typically 0.2 seconds from the time we receive an inquiry from a store to the time we start sending an authorization back," Mizicko says.

"By comparison, the response time for an external authorizer is about 1.5 seconds, but even this interval is far less than the average 5 to 8 seconds achieved with Ward's previous network."

Registers Stay Up

The new system also dramatically reduces cash-register "timeouts"--which used to occur if credit authorization was delayed more than 30 seconds.

The result is decreased exposure to bad charges that slipped through when arbitrarily imposed floor limits were used.

Losses attributed to inappropriate authorization of check purchases have also decreased, because of check-authorization software developed for the ADCU by LeRoux Pitts Associates (LPA), a NYNEX company based in Clearwater, Fla.

The negative file of bad check writers used to reside on the IBM host, but when this resource was unavailable, floor limits had to be used.

In the now-unlikely event that a bad check is accepted, a centralized check-collections application, also using LPA software, expedites the collection process.

Previously done on a store-by-store basis, network-wide collections are expected now to be significantly more effective and less labor-intensive.

Montgomery Ward is also benefitting from tighter fraud control available with a "refund-no-receipt" application, developed by CACI, which tracks customers, by driver license numbers, who return merchandise with no receipt.

Such returns may occur for legitimate reasons, but in the past fraudulent returns may have occurred by individuals abusing Ward's customer-satisfaction guarantee.

An application known as Sales Transaction and Data Logging receives all sales transactions as they occur at each network node for editing before passing them to the host for batch processing.

Processing of data-collect traffic at about 157 sales items per second has already been achieved with this application.

Previously, all daily sales data was stored on magnetic tape, which had to be loaded into the host before any processing could begin.

Besides wasting time, this operation required the assistance of three staff members.

Rapid Replenishment

As sales data passes through the Tandem to the batch-merchandising system, another application--known as Rapid Replenishment--identifies selected high-value, fast-moving items (such as VCRs or air conditioners) not inventoried in large quantities in individual stores.

One full day has already been saved in the inventory-ordering process because of the on-line communication between the ADCU and the merchandising application.

Rapid Replenishment will be able to slash yet another day off processing orders of priority items by directly communicating with the distribution system, so orders can be filled that night.

The crucial items can then be shipped the very next day.

"With such a short replenishment cycle, we can minimize inventory and maximize floor space for selling merchandise," according to Irv Hammer, Montgomery Ward's vice president of management information systems (MIS).

As part of the overall ADCU project, CACI also developed a configuration management application (CMA) to facilitate defining and reconfiguring the network.

Ray Mills, CACI project manager, explains the benefits this way:

"Since it's a comprehesive database of all communications definitions used in the network, the CMA lets Montgomery Ward easily and quickly add stores to their multi-drop network.

"Running on the Tandem host," he adds, "CMA also automates production of the input file for the IBM VTAM network control program generator.

"When this process was completed manually, programmers used to spend an entire week configuring just 10 lines," Mills says.

"But with CMA, the entire network can be reconfigured in 30 minutes."
COPYRIGHT 1990 Nelson Publishing
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Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Montgomery Ward
Publication:Communications News
Date:Aug 1, 1990
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