retail’supply’chain’essen1als’ii’ david&gonsalvez& · retail supply chain...
TRANSCRIPT
Retail Supply Chain Essen1als II David Gonsalvez
Agenda ...
• Retail Supply Chain Essen1als (session 1) • Retail Supply Chain Essen1als (session 2) • E Commerce and Omni Channels (session 3)
• Focus is on Supply Chain aspects • Marke5ng, Pricing, Adver5sing, Talent, etc. are not discussed • There is no generic op5mal solu5on or theory that fits all situa5ons
Retail Supply Chain Execution
EFFICIENTLY DELIVER
THE RIGHT PRODUCT
IN THE RIGHT PLACE
AT THE RIGHT TIME
IN THE RIGHT QUANTITY & QUALITY
The Retail Supply Chain Flow...
ZARA: Process Flow Overview
Source: Inditex Presenta5on – Jesus Vega
Retail Supply Chain Execution ...
• Inventory Management & Visibility • Order Fulfillment • Cost Reduc1on And • Informa1on & Data Analy1cs
Inventory Integration
VENDOR INVENTORY
DISTN CTR INVENTORY
STORE INVENTORY
PIPELINE INVENTORY
PIPELINE INVENTORY
CUSTOMER
Can you sa1sfy orders from the cheapest inventory source? Real-‐1me visibility of all inventory Real 1me evalua1on of op1mal service point
Ideal Order and Inventory Visibility...
Source: Big Data Analy5cs in Retail -‐ Intel
Current Visibility in the Retail Supply Chain
Source: Big Data Analy5cs in Retail -‐ Intel
ZARA Managing Inventory ...
• Limited Batch Sizes • Fast introduc1on, Fast withdrawal • Speed of Delivery • Store Informa1on
Retail Supply Chain Execution ...
• Inventory Management & Visibility • Order Fulfillment • Cost Reduc1on And • Informa1on & Data Analy1cs
Logistics Role in Order Fulfillment
• Availability • Stockout frequency (product unavailable) • Fill Rate (% of items in order available) • Orders shipped complete
• Opera1onal Performance • Speed (Cycle speed order to delivery) • Consistency (Actual speed = Planned speed) • Flexibility (Accommodate special requests) • Malfunc1on Recovery (efficient con1ngency plans)
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Logistics Role in Order Fulfillment
• Service Reliability • Damage Free and exact quan1ty ordered • Complete and correct paperwork • Accurate order status informa1on
• The Perfect Order • Correct items, right quan1ty, damage free • On 1me delivery • Correct documenta1on with right informa1on • Right mode, loading, and des1na1on
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Zara: Delivery Process
Source: Inditex Presenta5on – Jesus Vega
Source: Inditex Presenta5on – Jesus Vega
Customer Segmentation Matrix
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LOW
HIGH
HIGH
Protect
Cost Engineer
LOW
Build
Danger Zone
COST TO SERVE
NET SAL
ES VAL
UE
OF CU
STOMER
Examples in Airline Industry
1. Segment customer base by profitability • Frequent flier points based on 5cket price (not miles flown) • Silver, Gold, Pla5num frequent flier cards
2. Iden1fy the Product/Service Package for Each Customer Segment • Business lounge access for top frequent flyers even when flying
economy class
3. Develop and Execute the Best Processes • Offer faster transfer 5mes, priority rescheduling, hotel linkups
4. Measure Performance and Con1nuously Improve • Measure “net capture” rate of frequent fliers of other airlines
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Retail Supply Chain Execution ...
• Inventory Management & Visibility • Order Fulfillment • Cost Reduc1on And • Informa1on & Data Analy1cs
Cost reduction in the supply chain...
• Op1mal Sourcing Mix (Local, Near, Far) • Op1mized network design
ZARA Sourcing Mix
19-‐Sep
-‐07
Network Redesign Close Spokane
Move Silver Bow east?
Split Mira Loma 1 ð 3
Move Santa Rosa west?
Add El Paso, TX
Close Janesville Move Dayton west?
Close Shreveport Move Memphis west?
Move Port Allen east?
Add Rochester, NY
Close Selkirk
Close Petersburg
Add Winston-‐Salem, NC
No Change Consider Moving Close / Add
Retail Supply Chain Execution ...
• Inventory Management & Visibility • Order Fulfillment • Cost Reduc1on And • Informa1on & Data Analy1cs
Thank You !