Interview with AAFES CIO Dale Linebarger
This is the first article in a Web series on interviews with CIOs from the retail industry.
On March 1, 2009, Dale Linebarger celebrated an anniversary; he has been with the Army & Air Force Exchange Service (AAFES) for 35 years and has spent the past 3 years serving as chief information officer (CIO). AAFES (commonly known as the PX or BX) is a joint military activity providing quality merchandise and services to active duty, guard and reserve members, military retirees and their families at competitively low prices. AAFES returns earnings to the Army and Air Force to improve troops’ quality of life and to provide a dividend to support Morale, Welfare, and Recreation programs.
AAFES seems to be experiencing some things that other retailers are not—numbers that are up slightly in an economic downturn. While there’s no set formula that AAFES has followed, Dale Linebarger offers insight into some important changes that AAFES has made, which includes a new retail merchandising system, and changes it plans to make, including a new enterprise data warehouse system, which will help improve supply chain efficiency and centralize data visibility and replenishment.
A CIO from the Business Side
With over 30 years of experience in retail operations and buying, Dale understands the processes that are critical for the success of the organization. He views his role as CIO as not just being the technical expert but also a leader who works with business process owners on how and where technology should be used. But, being from the business side of AAFES has had some challenges. Dale stated that he routinely challenges internal IT processes for their efficiency and cost effectiveness before any IT applications were being introduced. Rather than buying another application to solve a problem, Dale wanted to figure out how IT could modify existing applications to make their own business processes run more smoothly and how to streamline the process of getting products out to the stores that needed them.
Dale believes that it is critical for the CIO to be included as a key member of the executive group of an organization and obtain information first hand rather than relying on filtered information. Receiving filtered or second-hand information can be a disadvantage for a CIO. Inner circles and executive groups provide an opportunity for Dale to be aware of key differential business processes and then prioritize items within his department.
New Retail Merchandising System
With a short answer of “yes,” Dale states that the new merchandising system is making the AAFES supply chain more efficient. The new system, which is ten applications from the Oracle Retail suite of products, was a multiyear project that was completed in 2008. It replaced several legacy applications and fragmented processes that did not provide the visibility of merchandise required to optimize the supply chain. Although AAFES is still in the process of rolling out the use of the new applications, improvements are already evident. AAFES has improved the process of what products are carried in each store and the in-stock position of that merchandise at store level.
With centralized visibility and management of the product assortment from their Dallas headquarters, AAFES projects to ultimately reduce its overall inventory investment by a significant amount. And with over 3,500 facilities in over 35 countries, this is critical in today’s highly competitive retail marketplace. The ultimate objective is to have the right merchandise, in the right quantity, at the right location. Dale emphasized that the key is not the technology itself but the improvements in the various business processes that use the new technology. This project was so important to the organization, Dale estimates that he has spent roughly half his time involved with implementing this project. The IT team continues to work on cleansing the data to ensure reduce redundant information and to speed up processing time.
Time to Think about Other Projects
With AAFES still performing fairly well in terms of sales, Dale is in a position where the IT backlog of initiatives can get some attention. Priority is given to data and network security and security for sensitive and personal customer information, especially compliance with industry credit card payment standards. For internal processes, the department is working on a pilot program using service-oriented architecture (SOA). Other major projects include implementing an enterprise data warehouse to create and maintain a common database for all users to utilize, replacing their warehouse management system (WMS), replacing two legacy systems into one new system and completing a new process for managing non-retail procurement.
AAFES has made some changes to make its internal processes more efficient, and it continues to compete with “big box” retailers here in the US. Dale Linebarger came into his position as CIO with over 30 years experience in retail and business processes, so aligning the IT department with the business side came quite naturally to him. And with continuing to have positive gains, Dale has been able to concentrate on making AAFES’ supply chain more efficient, more centralized, and more visible to serve its military customers who serve and have served us.