scl antwerp - patrick dittli, global director supply chain, metro cash & carry

CONNECTIVITY: BOOSTING CUSTOMERCENTRICITY INTO THE VALUE CHAIN

SCL ANTWERP EVENT 2015June 2015

Patrick DITTLIGlobal Director Supply Chain,Metro Cash & Carry

CONTENTS

METRO Cash & Carry

September 2014 | Member of METRO GROUP 1

01 SHORT INTRODUCTION

02 GAME HAS CHANGED – THE OPPORTUNITY!

03 CHALLENGES TO OVERCOME – DO NOT IGNORE

04 HOW CONNECTIVITY BRINGS CUSTOMER CENTRICITY

05 DIALOGUE

SHORT INTRODUCTION

METRO Cash & Carry


Cross-functional companies

METRO CASH & CARRY – A CORE BRAND OF METRO GROUP

METRO GROUP sales 9M 2013: €46.3 billion

Hypermarkets

Sales 9M 2013 (bn): €7.3

Countries**: Stores**:

3324

Status: 30 September 2013*Status: 31 August 2014

**Status: 30 June 2014

METRO Cash & Carry


Wholesale

Sales 9M 2013 (bn): €22.6 Countries*:28….Stores*:

764

Department

storesSales 9M 2013 (bn): €2.1 Countries**: 2Stores**: 137

Consumer electronics stores

Sales 9M 2013 (bn): €14.4 Countries**: 15Stores**: 988

revolutionary … what a success!

METRO Cash & Carry


• 50,000 articles,Food & Non-Food

• >15,000m2 net sales area

• Location in outskirts of city

• Huge parking lot

• Aggressive pricing

• Cardholders only (business owners)

• … a privilege!

HOW IT ALL STARTED

Our business is global – geographies are different!METRO GROUP 2014: 2,212 LOCATIONS IN 31 COUNTRIES

Netherlands METRO C&C Media-Saturn

1745

Pakistan METRO C&C 9

Poland MAKRO C&C Media-Saturn

4171

Portugal MAKRO C&C Media-Saturn

109

Romania METRO C&C Real

324

Russia METRO C&C Media-Saturn

7362

Serbia METRO C&C 10

SlovakiaMETRO C&C 6

France Spain

MAKRO C&C 37

Switzerland Media-Saturn 25

Status: 30 June 2014METRO Cash & Carry


Germany METRO C&C

107

Media-Saturn 416Real 308Galeria Kaufhof 122

Austria METRO C&C

12

Media-Saturn 47

Belgium MAKRO C&C

13

Media-Saturn 23Galeria Kaufhof 15

Bulgaria METRO C&C

14

China METRO C&C

78

CroatiaMETRO C&C

7

Czech Republic MAKRO C&C

13

Denmark METRO C&C

5

METRO C&C

Greece

93

MAKRO C&C 9Media-Saturn 10

Hungary METRO C&C

13

Media-Saturn 21

India METRO C&C

16

ItalyMETRO C&C

49

Media-Saturn 116

Japan METRO C&C

9

KazakhstanMETRO C&C

8

Luxembourg Media-Saturn

2

Moldova METRO C&C

3

Media-Saturn

Sweden

72

Media-Saturn 28

Turkey METRO C&C

27

Media-Saturn 41Real 12

Ukraine METRO C&C

33

Vietnam METRO C&C

19

GAME HAS CHANGED – THE OPPORTUNITY!

METRO Cash & Carry


What got you here, will not get you there…

METRO Cash & Carry


GAME HAS CHANGED – AMAZONFRESH.COM, WAITROSE.COM

PlanetRetailLebensmittelZeitung

GAME HAS CHANGED – ANALYSTS

METRO Cash & Carry


„Revolution in Lebensmittelhandel“ (E&Y)

„Convenience and on-line change the game“ (Planet Retail)

„Digital consumer demand“ (SCM World)

PlanetRetail

CHALLENGES TO OVERCOME – DO NOTIGNORE

METRO Cash & Carry


WHERE DO WE (AND MANY RETAILERS) COME FROM?

brick & mortar …

METRO Cash & Carry


… and therefore, delivering home…

• … „is not our business“

• … „cannibalizes our stores“

• … „is not as profitable“

• … „is not part of my bonus“

• … „needs different IT systems“

• … „we do not have capability“

• …

we had it all!

… WE ALMOST FORGOT WHAT WE ALSO HAD – AND HAVE!

METRO Cash & Carry


… WE ALMOST FORGOT WHAT WE ALSO HAD – AND HAVE!

METRO Cash & Carry


20 million customers (card holders) …

• Addresses, emails, business details

• Intimacy with our A- and B-customers

A massive, unrivaled opportunity to create value, provide targeted solutions!

Internal

• „Store is Core“

• Store vs. Headquarter

• Other channels are not just „incremental“

• Seamless shopping experience?

• Assortment & Solutions

• Sales Force

• Logistics Network (& stocking policies)

• IT & processes

AND IT WOULD BE WRONG TO CLAIM THAT WE HAVE IT ALL

METRO Cash & Carry


HOW CONNECTIVITY BRINGS CUSTOMERCENTRICITY

METRO Cash & Carry


THROUGH CROSS-FUNCTIONAL EXERCISE CONNECTIVITY INTENDS TO BREAK THE VERTICAL FUNCTIONAL PERSPECTIVE

Marketing

Master Data

Offer

Merchandise

Supply Chain

Operations

Supplier Customer

END-TO-END PROCESSES

END-TO-END CUSTOMER CENTRICITY

VALUE-CHAIN

HR

Finance

METRO Cash & Carry


FOCUS ON CUSTOMER, OFFER AND SUPPLIER:TO BE MASSIVELY IMPROVED BY WELL CONNECTED PROCESS STEPS, GOODSYSTEM CONNECTIVTY AND CLARITY IN ROLES AND RESPONSIBILITY.

METRO Cash & Carry


Three areas appear to be offering greatest opportunities

Order Management

Product Life Cycle

Management

Promotion Management

THROUGH CROSS FUNCTIONAL EXERCISE CONNECTIVITY INTENDS TO BREAK THE VERTICAL FUNCTIONAL PERSPECTIVE

(Central) Order

Management

Product Life Cycle

Master Data Mgmt

Logistics Flows

Deliveryconditions

Supplier performance

StockManagement

Considering the “ stone i n the w ater effect” , we agreed to focus first on Order Management

Ord

er M

ana

gem

ent

Pro

duc

t Li

fe C

ycle

M

anag

emen

t

Pro

mot

ion

Man

age

men

t

Three areas appear to be offering greatest opportunities

METRO Cash & Carry


Wave 1Wave 2

Wave 3METRO Cash & Carry

Cluster 1

Cluster 2

Cluster 3

…

Remove duplicates and cluster pain points into key statements

Listing pain points

Cluster 1

Cluster 2

Cluster 3

Must-do

Postpone

Consider

Understandable and consistent description

Cluster pain points in problem situation

Process Mapping and pain point collection

Assign to customer / company value

Document pain points in list

1 2 3 4

Cluster Id Cluster Name (optional) Problem Situations Pain pointsID Painpoints related to that cluster

2 Order entry too late in the system17 We don't have the product in stock

Delivery too late 11 Our replenishment is too low frequent / high

volume19 We have to pay penalties due to too late deliveries13 We don't know what the customer wants to order in the next weeks8 No insight in phasing in / out of products (promo and NPD)3 Picking errors7 Stock differences between system and warehouseDelivery not 4 Promo products often are

sold outA Delivery is not on time or

complete

<situation 3>

in full

Pain Points

Prioritize clusters; where to put the

(initial) focusAbsolute impact

calculation5 6

Define solutions and (if solutions hard to find): root cause analysis.

Estimate which impact might be solved implementing the solution(s)

Finding solutions7

SCI: situation,

consequence, impact.

Decision Management Board

8

Proposal defined solutions to Board and get approval to start TO BE)

Closure AS-IS

CONNECTIVITY ES METHODOLOGY (AS –IS)


Work out detailedProject plan per area

2 3 4

5

AS IS: Board approvalproject brief per solution

1

6

Impact on RACI or structure

Explain and train (pilot group)

Securing7

Board Discharge8

Work out the plan to implement the solutions

One A4 to get Board approval for the preferred solutions

Prepare for required changes

Pilot the solution(s)

Go live with the solution in part of the business to understand the effect

Adapt process / Work Instruction

Adapt tools &

systems

Learn, adapt and prepare for rollout

Adapt tools &

systems

Explain and train (involved employees)

METRO Cash & Carry


Implementation

Go live with the solution(s) in the speed as agreed in the plan

Adherence and performance are monitored with periodical performance reviews

Adapt process / Work Instruction

CONNECTIVITY ES METHODOLOGY (TO-BE)

SITUATIONS: DELIVERY VS. ORDER MANAGEMENT

ORDER MANAGEMENTDELIVERY

MASTER DATA INCOMPLETE& INACCURATE

STOCK NOT UPDATED FOR ORDER RELEASE

OPL PARAMETRES NOT ACCURATE

DELIVERY CONDITIONS & FLOW TYPES

NOT ADAPTED TO STORE NEEDS

SYSTEMS NOT ALIGNED

WITH BUSINESS NEEDS

1.

2.

3.

4.

5.

MASTER DATA INCOMPLETE& INACCURATE

STOCK NOT UPDATED FOR ORDER RELEASE


NOT ADAPTED TO STORE NEEDS

SYSTEMS NOT ALIGNED

WITH BUSINESS NEEDS

1.

2.

3.

5.


NOT ADAPTED TO CUSTOMER NEEDS

4.

BE AWARE: BOTH STREAMS HAVE SAME SITUATIONS, BUT HAVE DIFFERENT CONSEQUENCES WITH DIFFERENT PROBLEMS!

METRO Cash & Carry


SITUATION-CONSEQUENCE-IMPACT (SCI)

METRO Cash & Carry


ASSUMPTIONS FOR POTENTIAL IMPACT CALCULATIONS

METRO Cash & Carry


Time expressed in Hours. (Possible evaluation in FTE / € as well)

Other Impact are expressed in €.

In case of possible different “magnitude”, the conservative approach prevails.

If the same impact appears twice or more, it has been divided by each

consequence proportionally

Period: either year 2013 or 1 rolling year.

Perimeter considered: Division: Dry Food, Non Food, Fresh. (Ultra fresh excluded) Store : All 37 ES stores

Goal of the potential impact calculations: measure the „As is“ situation (e.g. DILO) measure the undesired effects/consequences (e.g.

Assumptions)

Supply Chain

Operations Offer

METRO Cash & Carry


DOT

Free up re-ordering time of store

Improve availability

Optimize stock

DARWIN

Better availability

Optimized stock

Flow types & delivery conditions adapted to store needs

PILLAR

Guarantee qualityMaster Data accuracy

ICARUS

Process adherence

Performance management

Continuous improvement

Guidance and stimulation of change

Maintain the Focus during ProjectsImplementation and Development.

To ensure Sustainability along the time and departments involved.

ICARUS

Customer Satisfaction improvement

Efficiency enabler

Working Capital

Focus

Improve service level Become preferred supplier for independent

HORECA customer

Ensure FSD development without interfering C&C development.

PERFECT

ORDER

PROFIT.GROWTH

Customer Satisfactionimprovement

Operational efficiency

BENEFITS

METRO Cash & Carry


DO T Free up time in stores for customer addedvalue tasks

Increase Stock Availability for customers

PILL AR Increase efficiency for on-shelf availability by accurate information.

DARW

IN Appropriate stock levels and stock quality Develop flexible sourcing process as per

business development needing

Video

METRO Cash & Carry


DIALOGUE

METRO Cash & Carry


DIALOGUE

METRO Cash & Carry


Q & A

METRO Cash & Carry


Patrick DittliTel: +49.211.969.1317Mob: [email protected]

METRO AGMetro-Strasse 1

40235 Duesseldorf Germany

CONTACT

METRO Cash & Carry


mailto:[email protected]










scl antwerp - patrick dittli, global director supply chain, metro cash & carry

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