Large Japan Supermarket Chain Enhances Customer Service with Red Hat and Fujitsu

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April 12, 2012

By utilizing Kernel-based Virtual Machine (KVM) virtualization technology within Red Hat® Enterprise Linux®, the company has increased operational efficiency, minimized total cost of ownership (TCO), and enhanced customer service.

Customer: Daiei

"We wanted an enterprise- ready solution based on KVM, so we selected Red Hat Enterprise Linux with the KVM hypervisor.” Yoshiro Saurada, department manager, System Planning Department, Daiei

Industry: Retail
Geography: APAC
Country: Japan


Business Challenge:

The big retailer recently developed and implemented a new gift ordering system, with the goal of replacing old paper-based order forms, reducing wait times, and delivering a supreme shopping experience for customers.

Software:

Red Hat ® Enterprise Linux

Hardware:

Fujitsu PRIMERGY TX150 S7 x86 servers

Benefits:

By utilizing Kernel- based Virtual Machine (KVM) virtualization technology within Red Hat® Enterprise Linux®, the company has increased operational efficiency, minimized total cost of ownership (TCO), and enhanced customer service.

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Background:

Seeing itself as a ‘life solution partner’ for the customers and local communities it serves, Daiei begin pursuing new store formats, retail opportunities, and services tailored to the lifestyles of its ever-increasingly diverse customer base. For example, the company currently provides over 1,600 gift items and the retailer wanted to make the gift-ordering process more convenient for its customers. The company’s IT department started to strategically look into the problems posed by its legacy IT infrastructure. Daiei’s IT department’s mission is to solve problems in business continuity planning (BCP), security, and other areas, and to minimizing TCO. Using a team of approximately 20 people, its IT department focuses on system planning, while development and operations are outsourced to multiple external vendors. Recently, the team’s priorities have focused more on strengthening BCP and security and optimizing TCO. The installation of a new gift ordering system was at the top of the team’s project list.

Business Challenge:

As Daiei began planning the implementation of its new gift ordering system, it soon realized the need to build a new system using virtual environments with room to aggregate admin servers.

The company’s end goal was to offer greater convenience to its gift ordering service customers and to solve the problems associated with its aging system. Its old paper-based order-processing system had a limited capacity and its servers were nearing the end of their service life cycle.

“We built a gift ordering system that runs on virtual servers, with the intention of aggregating the servers that are currently operating later, in a step-by-step manner,” said Yoshiro Sakurada, department manager, System Planning Department at Daiei. “Under the old system installed in 2004, stock and merchandise control were running on separate servers.

Having separate systems only used for limited time periods–midsummer and year-end gift-giving seasons–was not cost-effective, so we needed to address this problem when building the new system.”

“Daiei’s existing fleet of admin servers was more than a thousand strong,” said Shinichi Ogawa, manager, Solutions Division at VIXUS INCORPORATED, an outsourcing partner contracted by Daiei to build the system. “Adding extra servers one at a time at each store would mean adding hundreds more servers to that total. Also, the servers installed in 2004 were already aging. Their performance was greatly inferior compared to the new servers and they take up much more floor space and consume much more energy. Therefore, we suggested that when the servers for the gift-ordering system were installed, a virtual environment should be built and the old admin servers should be aggregated into that environment in a step-wise manner.”

Solution:

Based on these circumstances, Daiei began looking for a partner for the procurement of new servers and for the installation of a virtualized environment. From among the solutions proposed by multiple bidders, it selected Fujitsu PRIMERGY servers. For the virtualized environment, it decided to use KVM, a standard technology in Red Hat Enterprise Linux operating system.

“When we looked at the study results of three companies offering virtualized environments,” said Sakurada, “the installation track record for company A’s virtualized environment, for example, was absolutely fine but the high license cost counted against it. As for company B’s virtualized environment, we understood that it would not always be possible to harvest memory dumps of the guest operating systems. The ability to harvest memory dumps is important from a maintenance perspective because a memory dump could be essential for tracking down the cause of a malfunction.”

“Also, because Windows and Linux were going to be used as guest operating systems, it was not clear which developer would be responsible for providing support and to what extent,” adds Sakurada. Red Hat technology offered reliable memory-dump harvesting, which meant that KVM technology could be installed with the expectation of high-level support, even in an environment consisting of a mixture of Windows and Linux.“So, bearing all these factors in mind, we decided to go for KVM, which offered us the most advanced virtualization technology to fit our needs.

Further, we wanted an enterprise-ready solution based on KVM, so we selected Red Hat Enterprise Linux with the KVM hypervisor.” “Fujitsu was the only server vendor we worked with on this project that proposed KVM and its proposal was extremely detailed and even addressed issues that hadn’t occurred to us,” said Sakurada. “Daiei’s total fleet of store servers is quite large, and the trouble with the virtualized environments proposed by the other vendors was that the license cost could not be reduced. However, KVM is included in Red Hat Enterprise Linux without additional costs, so purchasing a subscription to the host operating system would give us the option of using up to four guest operating systems at no extra charge. This meant the KVM solution had the advantage on the cost front as well. Another factor was that Daiei is the kind of company that likes to experiment with new ways of doing things. Besides its other benefits, adopting KVM would also help improve our technological muscle. That’s why Daiei became the first Japanese supermarket chain to install KVM.”

This decision was also strongly influenced by Fujitsu’s confidence in KVM. “With Fujitsu’s established worldwide alliance with Red Hat and its track record in cooperating in the development of Red Hat Enterprise Linux, we were confident in our technology selection. Backed by that close relationship, Fujitsu confidently assured us that they would be able to provide support, and that was one of the reasons why we adopted KVM.” said Ogawa. The new system was initially tried at 23 Daiei stores leading up to the midsummer gift-givingseason. This was soon followed by a full-scale roll-out to 157 stores in preparation for the year-end gift-giving season. “While installing the new gift-ordering system, we also reviewed our terminals,” said Yutaka Yoshida of the System Planning Department at Daiei. “A lot of the gift-ordering administration work is actually done by part-time staff members, so we introduced a touch-pen input method. Fujitsu gave us all-round support with this project, procuring all the hardware for us, from servers to terminals. This meant we were able to get
the system in place in just two months.”


“We tried the new system at selected stores before the 2011 midsummer gift-giving season, so we were able to test our applications and make amendments as required,” said Yoshida. “Thanks to this trial, we were able to do on-site checks of operations that we had not initially considered, and fed the resulting improvements back into the system. By the time the yearend gift-giving season arrived, the new gift-ordering system was fully up and running. Now, no matter where the Japanese customer lives, they just have to give us their telephone number, and the system then brings up all their details automatically. Plus, gift delivery leadtimes are about two days shorter than before.”

Benefits:

With the new gift-ordering system, customers can complete their order forms digitally instead of using paper. This makes the form-filling process quicker and easier for customers, and while shortening delivery lead-times. With more than 400,000 people in its directmarketing gift-order customer base, once a customer is registered in the gift ordering system, they can walk into a Daiei store anywhere in Japan, select the gifts they want to send, and the rest of the procedure will be handled automatically. In the end, this new system has taken two days off the product-delivery waiting time. 

Although the project’s current focus is successfully rolling out the new system to all stores and achieving stable operation, Daiei plans to aggregate its existing admin servers into a virtualized infrastructure consisting of the two PRIMERGY servers on which the giftordering administration system runs at each store. This would improve operating efficiency and cost-effectiveness.

“Currently, there are three live admin servers at each store and the remaining three are left as backups. The new gift-ordering system running in the virtualized environment has one live server, plus another server for the backup system,” said Ogawa. “Going forward, we plan to aggregate these within the virtualized environment where the gift-ordering system is running, and run all our admin apps using a configuration of one live server and one backup server. We hope this will raise our operating efficiency, cut our costs, and consequently enhance the service we offer our customers.”

Daiei has several plans in the future using Red Hat solutions. “If I were asked to sum up the benefits of using open source software from a development viewpoint, its ease-of-use, the fact that the source code is in the public domain so problems can be handled swiftly, and the fact that it cuts costs are all major factors,” said Ogawa.

“We adopted Red Hat Enterprise Linux in order to reduce our costs,” said Sakurada. “And it now makes up an increasing proportion of our whole system. As we optimize our entire IT system, we will continue actively utilizing open source software, and we will turn to Red Hat as a strategic leader throughout this journey.”

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