Document

Report
Mr. Joseph H. Jeu, Director & CEO
Our mission:
Deliver a vital benefit of the
military pay system that sells
grocery items at cost while
enhancing quality of life and
readiness
Our Vision:
Understand our customers
and deliver a 21st century
commissary benefit
Non-pay Compensation Benefit that Improves
Quality of Life for Uniformed Service Members
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The Honorable Jo Ann Rooney
Mr. Fred Vollrath
Lt Gen Darrell D. Jones, USAF
Acting Under Secretary of Defense
Personnel & Readiness
Principal Deputy Assistant Secretary of
Defense (Readiness and Force
Management) Performing the duties of
Assistant Secretary of Defense
(Readiness and Force Management)
Chairman
Board of Directors
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Sales and Transactions
Sales
DeCA Total ($ Millions)
Transactions
DeCA Total (Millions)
Sales per Transaction
DeCA Average
FY 2012 thru
March
FY 2011 thru
March
$ Change
% Change
$3,084.56
$2,962.83
$121.73
4.11%
FY 2012 thru
March
FY 2011 thru
March
# Change
% Change
48.84
47.58
1.28
2.70%
FY 2012 thru
March
FY 2011 thru
March
$ Change
% Change
$63.12
$62.27
$0.86
1.38%
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DeCA’s Projected $6B in Sales
September 2012
Sun
Mon
Tue
Wed
Thu
Fri
Sat
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2nd time in DeCA’s History
1992 – 411 commissaries
2012 – 247 commissaries
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Fort Riley, KS
Fort Carson, CO
Fort Campbell, KY
Moody AFB, GA
Portsmouth NNSY, VA
Quantico
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• Estimated live launch: September 2012
• Commissary Rewards Card compliments and
extends current savings through use of digital
coupons
• Cards will be distributed in-store & registered via a link within
the commissary website
• Digital coupons loaded directly to the patron’s account
• Future capabilities unlimited (i.e. mobile apps, partnering
opportunities with exchanges etc.)
• DeCA Point of Contact: Marye Carr, 804-734-8000 ext 52781
Impactful Initiative – DeCA Team to be Enthusiastically Engaged!
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• Congressional Interest
• Re-vitalized program
– Two locations approved (Fairbanks AK and San Diego CA)
• Right thing to do
– Social benevolence
– Reduced solid waste
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•
Measures important to identify challenges and help improve performance
•
Concentrate initial effort on the following metrics:
– Manufacturer and Broker Store Support
– FDS Manufacturer/Distributor Fill Rates
– In-Stock Effectiveness
– New Item Speed to Shelf
– Promotions Effectiveness
•
Will Collaborate with Commissary Council to finalize standard and
reporting
– Goal is to begin tracking NLT July
•
Long term plan is to automate reporting as much as possible
Together We Will Drive Effectiveness & Efficiency!
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FY 1992 – 2011
($903.1M/6,662 FTE)
• Consolidation of Services Commissary Systems – ($50M/0 FTE)
• Military Conversion to Civilian – ($36M/521 FTE)
• Restructure Above Store Functions – ($296.7M/911 FTE)
• Operational Efficiencies – ($152M/0 FTE)
• G&A Efficiencies – $91.1M/0 FTE)
• Workforce Restructuring – ($76.1M/1009 FTE)
• BRAC/Closures – ($200.6M/4,181 FTE)
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• Customers
– Sales near $6B in FY11 – 96.2 million transactions
– Customer Savings 32% - $2.8 B Savings to Customer
– Exceptional Customer Service Scores
• Commissary Customer Service Survey (CCSS) 4.72
• 2012 American Customer Satisfaction Index (ACSI) 81
• Workforce
– Leader in Military Related Employment – 63% of Workforce
– 2011 DoD Award Winner for Employing People With Disabilities
– 2011 DoD Award Winner for Employing Veterans With Disabilities
• Stakeholders
– 10 Unqualified Audit Opinions
– Gold Standard in DOD for Internal Controls
– Information Technology Security (FISMA) Scored as “A”
– ROI > $2 for Customer Savings to $1 Appropriated Costs
– Small Business Contracting Award Achievement Outpaces DOD Goal
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• Pace of change is accelerating
• Internet empowers consumers to shift demand rapidly
• eCommerce is a serious threat to brick and mortar
• Mobile retailing and social media provide new ways to shop
• Customers value social opinion – can share thoughts instantly
• Important to build and maintain strong brand
• Informed consumers require retailers to meet their service
expectations
• Workforce needs access to information equivalent to customers
– solution specialists enabled to enhance shopping experience
Reliable
Relevant
Responsive
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• Study shopping trends to gain customer insight
− Gain knowledge of our customer segments and shopping trends
• Explore electronic and mobile commerce to implement a 21st
century business model
– Examine e-commerce shopping capabilities
– Study m-commerce shopping capabilities
– Test non-traditional grocery store models at selected locations
• Employ new efficiencies to continue as best in class government
agency
– Analyze alternative construction concepts to reduce costs
– Streamline technology solutions to support the business
– Implement operational initiatives to improve core commissary model
• Establish aggressive Agency performance measures
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DeCA Vision Team
Building a New Paradigm
A New View to Old
Issues
“How Do We Get There From
Here”, If We Don’t Know
Where “There” Is, Yet?
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• Understand Our Customers
– Shopping habits, service expectations
• Know Our Business
– Real time data/analysis to make risk-balanced decisions
• Consistency in Service
– Standardized service levels at every commissary
• Build Our Brand
– Strong brand – identifies who we are and what we represent to our
customers
• Increase Accessibility to the Benefit
– E and M commerce
• Business Enhancements
– Systems, programs, processes that support more efficient delivery of
the benefit
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Working the issues related to a surcharge shortfall
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Key Strategies:
• Study and support customer shopping trends - leverage social
media to gain insight into our evolving customers
• Explore concepts such as electronic and mobile
commerce and other business model improvements
• Employ new efficiencies in construction, technology and
operations
• Establish aggressive Agency performance measures
Understand our Customers and Deliver a
21st Century Commissary Benefit
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• Enterprise Business System is the overarching program
for incremental modernizing our core mission processes
– Time and Attendance System DoD IRB approved
– Resale Supply Chain Management
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Promotions & Cataloging
Plan-o-gramming
e/m Commerce
Ordering/Receiving/Inventory Management
Non-resale Asset Management
• Point of Sale replacement system in each Commissary
to process customer transactions and interfaces with
DeCA’s business system
• Commissary Level of Authorized Standard Services
(CLASS)
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Mission
Vision
Deliver a vital benefit of the
military pay system that sells
grocery items at cost while
enhancing quality of life
and readiness
Understand our customers
and deliver a 21st century
commissary benefit
Values
We have Passion for what we do!
P
A
S
S
I
O
N
We PURSUE EXCELLENCE
We are
ACCOUNTABLE and FISCALLY RESPONSIBLE
We have a
SENSE OF URGENCY
We SET HIGH STANDARDS
We value INNOVATION
We take
We are
OWNERSHIP of our PERFORMANCE
NECESSARY
One Vision, One Team, One DeCA!
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• Total “Order of Magnitude” 10-year requirement: $4,737.4M:
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Sustainment (minor construction) projects at 10 and 30 years: $352.5M
Major Addition/Alteration requirements at 20 years: $1,322.8M
Replacement stores at 40 years: $1,710.0M
Central Distribution Center requirements: $175.7M
Current MILCON requirements (likely to ultimately be surcharge): $170.4M
Inspection contracts: $41.3M
Maintenance and repair: $909.2M
Energy Program: $55.5M
• Projected surcharge facilities 10-year budget: $2,200.0M
• Projected 10-year facility surcharge shortfall: $2,537.4M
• The Facilities Project Prioritization Model (FPPM) provides a
detailed analysis of each location’s condition, operational and
long-term market assessments, to identify specific projects for
execution within the available budget, each fiscal year
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• Enables Financial Readiness in the Military Community
– Savings of 32 percent in FY 2011
– Return on investment of $2.08 savings for every $1.00 appropriated cost in FY 2011
– Ancillary Support: Industry contributions to installations, giveaways, scholarship
program totaling $244M
– Significant employer of military family members and other military-related persons
• Solidifies Nation’s Commitment to Keep the Faith with our 21st Century Joint Force
− Supports readiness, recruitment, and retention
− Offers American products worldwide while ensuring a safe, secure shopping
environment
− Maintains a sense of community for military and families
• Cost Avoidance
– Defense Transportation System: a leading peacetime shipper of military goods
overseas
– Cost of Living Allowance: reduced for commissary presence
• Socio-economic Support
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•
Cooperative Efforts Board (CEB)
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Cooperative Construction, Purchases, Distribution
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Family Fun Fitness Festival
Annual Farmer’s Market Sales
Back to School campaign
Collaborative Marketing and Outreach
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Joint exchange and DeCA construction projects
DeCA sales to exchange/MWR average $28M annually
DeCA purchases from exchanges average $125M annually
Exchange/MWR reimburse DeCA for overseas transportation $650K
Started in FY11 the sharing of sea containers saved $100K, with FY 12 savings projected at
$500K
Collaborative Events on Installation
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Formed to facilitate cooperative efforts between commissary, exchanges, and Coast Guard
Joint messages in print, radio, store flyers, catalog mailers
Joint “online” Holiday Family Favorite Recipe Contest
Exchange participation with DeCA’s Guard/Reserve on-site sales
DVD Vending Machines at Commissaries
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• Congressional Interest
• Re-vitalized program
– Two locations approved (Fairbanks AK and San Diego CA)
• Right thing to do
– Social benevolence
– Reduced solid waste
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– Decision process that enables uniform delivery of services
provided by all stores within available funds
– Focuses resources that drive the quality, consistency, and
predictability of programs and services
– Customers will know what level of service to expect at every
commissary they visit
– Employees will know what level of service they are expected to
provide
– Employees will be trained to a standard to produce better overall
operational execution and standardized customer service
– CLASS will be deployed to all commissaries by June 30, 2013
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Peek into the Future
Personalized Shopping
Convenient Point of Sale
Social Business
Real Time Analytics
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• Total Eligible Households
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–
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Active Duty
National Guard and Reserve
Retired Military
Other*
5.3 Million
1.5 M
1.3 M
2.1 M
.4 M
*Other includes overseas civilians, contractors, Disabled Vets, Medal of Honor, DoD
Beneficiary sponsors and others not specified
Source: Defense Manpower Data Center – August 2011
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