Supply Chain Big Bets Customer Demand Driven Replenishment

Report
Customer Demand Driven Replenishment
Improve Store In-Stock Rates
Reduce Overall Inventory
Reduce Supply Chain Costs
Scott Craig - Delhaize America
Mark Lyktey and Jason Gintert - PepsiCo Warehouse Delivered
January 2012
Agenda
Supply Chain Big Bets
Case Study Defined
POS Impact
Store Inventory Impact
Customer Demand Driven Replenishment
Q2 Inventory Tracking
Year on Year Inventory Tracking
What’s Next
Supply Chain Big Bets
Customer Demand Driven Replenishment
 Business Benefits (Source: Retail Solutions, Inc)
 12% To 27% Lower DC Inventory
 21% To 77% Decrease In DC Out Of Stocks
 20% Decrease In Store Level Out Of Stocks
 Delhaize Piloted Program With Another CPG Vendor
 Forecast Accuracy Improved By 30%
 Met Or Exceeded All Goals
 Estimated Inventory Reduction 30%
 Predecessor - Rapid Replenishment
 Upside Includes Increases In Stock, Reduces
Reclaim, Etc.
4
Agenda
Supply Chain Big Bets
Case Study Defined
POS Impact
Store Inventory Impact
Customer Demand Driven Replenishment
Q2 Inventory Tracking
Year on Year Inventory Tracking
Year on Year Inventory Tracking
Case Study Defined
What is standard VMI:
Vendor Managed Inventory (VMI)
Upstream Supply Chain
Pepsi Plant
Food Lion
Warehouse
Pepsi DC
Pilot
Food Lion
Store
VMI Pilot Goals - Penetrate to Store
Reduce Supply
Chain Costs by
0.5%
Decrease Food
Lion overall
Inventory by 5%
Increase Store
In- Stock Rates
by 0.75%
Agenda
Supply Chain Big Bets
Case Study Defined
POS Impact
Store Inventory Impact
Customer Demand Driven Replenishment
Q2 Inventory Tracking
Year on Year Inventory Tracking
What’s Next
POS Impact
Customer Replenishment Planning
Food Lion
Warehouse
Pepsi DC
DC to DC 1 day
Pilot
Food Lion
Store
Store to DC every 2 to 4 days
POS identifies trends 3 days faster
Headlines:
•
•
•
POS accelerates customer demand visibility to the manufacturer
Able to react within the promotional period
Provides a better more accurate demand signal that can be leveraged through the Supply Chain
POS Promotional Sales Growth
In Stock Efficiency
Net Gain: Promotional Event Oversell
Day:
Day 1
Planned
Delivery
50%
Day 4
Day 7
Day 13
30%
Event
POS
Actual
Delivery
Day 10
Day 16
Day 19
100%
20%
Overselling
50%
30%
20%
Headlines:
• Sales Growth through higher in-stock
• Customer Demand Driven Replenishment based of POS
• POS data yields information to support decisions
Total
111%
+10%
110%
POS Inventory Efficiency
Inventory Efficiency
Promotional Event Undersell
Day:
Day 1
Planned
Delivery
50%
Event
POS
Actual
Delivery
Day 4
Day 7
Day 10
Day 13
30%
Day 16
Day 19
100%
20%
Undersell
50%
15%
Headlines:
• POS data yields information to support decisions
• Inventory Efficiency
• Fewer Returns/Expired
Total
57%
5%
70%
Agenda
Supply Chain Big Bets
Case Study Defined
POS Impact
Store Inventory Impact
Customer Demand Driven Replenishment
Q2 Inventory Tracking
Year on Year Inventory Tracking
What’s Next
Store Inventory Effect
Pilot
Customer Replenishment Planning
Goal
X Days total
network
VMI
X - 2 days
Ship
Food Lion
Warehouse
Traditional VMI shipped promo + 2
Pilot
Pepsi DC
Y Days
Warehouse
Y - 2 days
X + 2 days
Y - 2 days
Food Lion
Store
Z + 4 days
Agenda
Supply Chain Big Bets
Case Study Defined
POS Impact
Store Inventory Impact
Customer Demand Driven Replenishment
Q2 Inventory Tracking
Year on Year Inventory Tracking
What’s Next
Customer Demand Driven Replenishment
Pre-Pilot
Conventional VMI
Pilot Data
Enhanced VMI
DC
Inventory
DC
Inventory
Pilot Goals
Store
Inventory
Forecast
DC
Customer
Replenishment
•
•
•
•
Safety
Stock
DC
Warehouse
Withdrawals
2nd Quarter
2010 vs. 2011
Sales Growth
Inventory Efficiency
Enhance replenishment
Enhance promo forecast
Forecast
Customer
Demand
Driven
Replenishment
(CDDR)
POS
Headlines
:
Safety
Stock
DC
Warehouse
Withdrawals
Sales Growth
Inventory Efficiency
Return/Expired
Total POS Store In Stock DC On Hand Store On Hand Total On Hand
Reclaim
+36.11%
+0.82%
-32.24%
+16.66%
-14.74%
-0.63%
Agenda
Supply Chain Big Bets
Case Study Defined
POS Impact
Store Inventory Impact
Customer Demand Driven Replenishment
Q2 Inventory Tracking
Year on Year Inventory Tracking
What’s Next
Q2 Inventory Tracking
Food Lion Gatorade Tracker Summary
32.24%
Inventory Cases
Q2 Distribution Center
Inventory Reduction
1
2
April3
4
5
6
7
May
8
9
PepsiCo Week
2010 DC On Hand
2011 DC On Hand
10
11
12
June
13
Agenda
Supply Chain Big Bets
Case Study Defined
POS Impact
Store Inventory Impact
Customer Demand Driven Replenishment
Q2 Inventory Tracking
Year on Year Inventory Tracking
What’s Next
2010 vs. 2011 Results by Period
Store In Stock
2.05%
1
2
3
4
5
6
7
8
9
10
11
12
13
Point of Sale
20.9%
1
2
3
4
5
6
7
2010
8
2011
9
10
11
12
13
2010 vs. 2011 Results by Period
DC on Hand
15.5%
1
2
3
4
5
6
7
8
9
10
11
12
13
Reclaim
0.5%
1
2
3
4
5
6
7
2010
8
9
2011
10
11
12
13
Agenda
Supply Chain Big Bets
Case Study Defined
POS Impact
Store Inventory Impact
Customer Demand Driven Replenishment
Q2 Inventory Tracking
Year on Year Inventory Tracking
What’s Next
What’s Next
Goals
•
•
•
•
•
•
Jointly Grow Sales
Improve Inventory Utilization
Increase Collaboration
Anticipate Customer Demand
Build Efficiencies
Expansion
•
•
•
•
Q2 2012
Expand automated processes
Roll Out to all Delhaize lanes
Measure & Publish Results
Collaboration
Automation
•
•
•
•
Q1 2012
Apply automation & enable EDI 830
Enhance Processes
Perfect on Food Lion Gatorade lanes
Proof of Concept
•
•
•
•
Q2, Q3 & Q4 2011
Manually perform Customer Demand Driven Replenishment
Enhance Processes
Measure & Publish Results
Blue Printing
• Q1 2011
• Brainstorm VMI Enhancements
• Manufacturer/Retailer jointly devise strategy
Demand Intelligence

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