scott craig - delhaize america mark lyktey and jason gintert - pepsico warehouse delivered january...
TRANSCRIPT
Scott Craig - Delhaize AmericaMark Lyktey and Jason Gintert - PepsiCo Warehouse Delivered
January 2012
Improve Store In-Stock Rates
Reduce Supply Chain Costs
Reduce Overall Inventory
Customer Demand Driven Replenishment
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
4
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.
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
Pepsi Plant Pepsi DC Food LionStore
Vendor Managed Inventory (VMI)
Food Lion Warehouse
What is standard VMI:
Reduce Supply Chain Costs by
0.5%
Increase Store In-
Stock Rates by 0.75%
Decrease Food Lion overall
Inventory by 5%
VMI Pilot Goals - Penetrate to Store
PilotUpstream Supply Chain
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
Pepsi DC Food Lion Store
Customer Replenishment Planning
Food Lion Warehouse
POS identifies trends 3 days faster
Pilot
• 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
Store to DC every 2 to 4 days
DC to DC 1 day
Headlines:
POS Promotional Sales Growth
Day 1
50%
50%
Day:
Planned Deliver
y
Actual Deliver
y
Day 4 Day 7 Day 10 Day 13 Day 16 Day 19 Total
30%
30%
20%
20%In S
tock
Effi
ciency
Event POS
Overselling
Headlines:
• Sales Growth through higher in-stock• Customer Demand Driven Replenishment based of POS• POS data yields information to support decisions
100%
110%
111%
+10%
Net Gain: Promotional Event Oversell
POS Inventory EfficiencyIn
vento
ry E
ffici
ency
Promotional Event Undersell
Headlines:
• POS data yields information to support decisions
• Inventory Efficiency• Fewer Returns/Expired
Day 1
50%
50%
Day:
Planned Deliver
y
Actual Deliver
y
Day 4 Day 7 Day 10 Day 13 Day 16 Day 19 Total
30% 20%
15%
Event POS
Undersell
100%
70%
57%
5%
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
Pepsi DC Food Lion Store
Customer Replenishment Planning
Food Lion Warehouse
Pilot
X Days total network
Y Days WarehouseG
oal
X - 2 days Y - 2 daysVM
I
Traditional VMI shipped promo + 2
Sh
ip
X + 2 days Y - 2 days Z + 4 days
Pilo
t
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 DataEnhanced VMI
DC Inventor
y
Forecast
Safety Stock
Headlines:
DC Inventor
y
Forecast
Safety StockPOS
Store Inventor
y
DC Warehouse Withdrawals
DC Warehouse Withdrawals
Customer Demand Driven
Replenishment (CDDR)
DC Customer
Replenishment
Return/Expired2nd Quarter Total POS Store In Stock DC On Hand Store On Hand Total On Hand Reclaim
2010 vs. 2011 +36.11% +0.82% -32.24% +16.66% -14.74% -0.63%
Sales Growth Inventory Efficiency
• Sales Growth• Inventory Efficiency• Enhance replenishment• Enhance promo forecast
Pilot Goals
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
Q2 Distribution Center Inventory
Reduction
32.24%
1 2 3 4 5 6 7 8 9 10 11 12 13
Inve
ntor
y C
ases
PepsiCo Week
Food Lion Gatorade Tracker Summary
2010 DC On Hand 2011 DC On Hand
April May June
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
1 2 3 4 5 6 7 8 9 10 11 12 13
1 2 3 4 5 6 7 8 9 10 11 12 13
2010 2011
Point of Sale
2.05%
20.9%
2010 vs. 2011 Results by Period
Reclaim
1 2 3 4 5 6 7 8 9 10 11 12 132010 2011
1 2 3 4 5 6 7 8 9 10 11 12 13
DC on Hand
15.5%
0.5%
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
Colla
bora
tion
Blue Printing
Proof of Concept
Automation
Expansion
• Q1 2011• Brainstorm VMI Enhancements• Manufacturer/Retailer jointly devise strategy
• Q1 2012• Apply automation & enable EDI 830• Enhance Processes• Perfect on Food Lion Gatorade lanes
• Q2, Q3 & Q4 2011• Manually perform Customer Demand Driven Replenishment• Enhance Processes • Measure & Publish Results
• Q2 2012• Expand automated processes• Roll Out to all Delhaize lanes• Measure & Publish Results
Demand Intelligence
• • Jointly Grow Sales• Improve Inventory Utilization • Increase Collaboration• Anticipate Customer Demand• Build Efficiencies
Goals