weave powerpoint standards template · 2019-11-25 · case study –asos warehouse glitch case that...
TRANSCRIPT
1
eCommerce Logistics
How to deliver to consumers…faster
November 20, 2019
22
Weave Solves the Most Complex Demand and Supply Planning Problems
SUPPLY PLANNING
EXPERTS
Our parent company – TAL Apparel has over 70 years' experience mastering the craft of sourcing, manufacturing & distribution globally.
Supply Chain Knowledge
Weave supports end to end supply chain planning; offering both demand and production planning to guide inventory from raw materials to end consumers.
Weave specializes in retail and soft goods. 80% of clients are retailers and manufacturers who operate in these sectors.
Retail Expertise
Weave enables fast and sustainable supply chain transformations. Proprietary advanced analytics solutions allow for quick deployment of our solutions.
Proven Models & Methodologies
E2E Supply Chain Planning
We have helped some of the world’s largest retailers:
33
eCommerce was growing, and still is…
Source: Statista, September 2019
eCommerce revenue comparisonChina, US and HK (US$ million)
572,042
633,858
723,131
274,755
315,628
365,207
4,063
4,356
4,742
2017
2018
2019
10.8%
14.1%14.9%
15.7%
7.2%
8.9%
2018 2019
All regions expected to grow
eCommerce revenue growth comparisonChina, US and HK (% Year over Year)
Hong KongUSA
China
USA
USA
China
China
HKHK USAUSACN CN
44
55
And the winning category is…
Source: Statista, September 2019
Major Product Category Division
39%
21%
18%
15%7%
28%
26%21%
17%8%
26%
27%26%
13%8%
China
US
HK
FashionElectronics & MediaToys, Hobby & DIY
Furniture & AppliancesFood & Personal Care
• Fashion is the leading product category in eCommerce across China and USA since 2017
• In HK, Electronics and Fashion are head to head
66
What do consumers value when making online purchases?
Source: PWC Global Consumer Insights Survey, 2019
PwC global consumer insights may give us some ideas
75%
71%
67%
66%
62%
60%
44%
43%
41%
41%
Better prices
Fast, reliable delivery
Good assortment
Convenient payment options
Easy website, mobile app
Good return policy
Unique assortment
Trusted brand
Loyalty programme
Test / try and free return options
10 key elements of a successful online shopping experience Fast, reliable delivery
• 99% of US consumers say “fast delivery” is important
• 31% opted for same-day delivery in 2018• 79% would switch retailers if offered more
convenient delivery options
Convenient payment options
• Reasons for abandoned shopping carts at check out process• 36%: no guest checkout option• 29%: I was charged extra for my preferred
payment method
Good return policy / free return options
• 49% of consumers actively check out return policy before buying
• Consumers with negative return experience are 3x more likely never purchase from the same retailer again
77
eCommerce is a very fast value chain as customers are expecting super fast delivery or even same-day delivery
Fast delivery does not rely on just one part in the value chain
Fast, reliable delivery
• 99% of US consumers say “fast delivery” is important
• 79% would switch retailers if offered more convenient delivery options
• 31% opted for same-day delivery in 2018
Inventory management
• Right product available at the right place (nearest WH / DC)
Warehouse operations
• Able to process the order, pick and pack fast and accurately
Delivery service
• Collect the parcels at WH / DC and deliver the correct parcel to customer within promised service level
https://www.dropoff.com/blog/retail-delivery-consumer-survey-shoptalk-2018
88
What’s the worst that could happen?
What is the worst that can happen?
99
Digital natives are openly call out incumbents…
Digitally native companies are using speed as their competitive advantage
Source: RSR Research 2018 Consumer Insights report
23%
26%
26%
32%
42%
51%
53%
We have changed delivery
We are cheaper than retailers
We have changed customerservice
Our products are unique
We have changed the customerexperience
We are faster & moreresponsive
We provide the highest qualityproducts
Retail ‘Disruptors’ C-level survey showing % of Top 3 responses for competitive advantage against retailers
1010
Capturing the customer requires an Agile eCommerce Value Chain
Source: https://www.tilog-logistix.com/image/download/E-Commerce_&_Logistics_Disruption_Dr_Ruth_Presentation.pdf
CustomersRegional DC Local Consol. CentreManufacturer
Multi Echelon Inventory Management
Challenges
Small number of pieces per order
Extreme peak season volumes
Real-time, accurate inventory and order visibility
High potential for brand damage from poor fulfilment performance
High volume of returnsfrom end consumers
Agile eCommerce value chain
• Direct customer delivery
• Vendor managed inventory programs (VMI)
Flexible and customized distribution
• Local small DC players
• Shared economy
Distribution
• 3rd party logistics
• Last mile players
• Shared economy
Payment systems
• WeChat pay
• AliPay
• PayMe
• Apple Pay
• Paypal
1 2 3 4 5
1111
Prediction: Combination of enablers for product localization is the future
Product mix localization unlocks product hit rate
Storage and warehousing operations
• Shared warehousing space
• Smaller forward replenishment centres
Mixed Delivery Options
• Mixed size fleet
• Shared delivery services
Inventory management and product mix localization
• Multi echelon inventory visibility
• Dynamic safety stock levels per SKU
• Product mix localization
• Integrated read and react systems
Less inventory in more strategic location
Higher last mile efficiency
Higher inventory turnover
Restaurant mix in Editions per geography and faster delivery (HK)
Filling up their returns in US warehouse for better product mix (UK)
Short term, Airbnb type, small space warehouse for rent with ABC costing (Indonesia)
Optimized last mile partners with world’s largest organizations (HK)
FMCG companies have been using forward replenishment centres for years
Uber-like on-the-way ride app that can deliver any package for you (USA)
1212
APPROACH
CASE STUDY – VMI and inventory optimization program
Source:
IMPACT
Weave worked with client on multiple solutions to improve sales with less inventory commitmentSales per week4%
• Data visualization helped ensure WOS targets are being met
• Increased material utilizationof existing fabrics and trims in new styles
• Minimized raw material write-off
A B C
Establish VMI program with segmented inventory
Optimize inventory level through assortment planning
Improve raw material commitment decision with E2E
supply dashboard
Developed store and DC replenishment program for weekly and monthly order respectively
Redistributed inventory according to the new store assortment plan developed based on sales contribution
Established end to end visibility of finished good and raw material commitment
Sell-through2.4%
Net store inventory0.3%
Nordstrom
1313
APPROACH
CASE STUDY – Replenishment solutions for Vietnamese footwear retailer
Source:
IMPACT
Centralized planning model encompassing replenishment, forecasting, and intake planning • The model allowed our client toincrease stock availability while streamlining the assortment
Sales growth in stores with new assortment
10%Assortment
PlanningDemand
ForecastingAutomatic
Store Re-orderingDC
Re-orderingCapacity
Optimizer
1 52 3 4
Correct historical data/ Bottom-up estimate forecast
Dynamic safety stock calculation to re-
order from factory
Order up to point to enable re-order at
stores and control of inventory
Optimize the number of products sold per
store
Automatically prioritize factory orders based on
capacity available
Big data and data visualization tools enabled more effective planning and implementation within 3 months
In-stock rate improvement during peak period
23%Reduction in SKU
19%
Bitis
1414
An organization built on industry knowledge, we are not a typical consulting firm
Apparel, Footwear & Accessories is our focus. Sourcing & manufacturing across Asia is our foundation. We manage large, multi-brand, US/EU based clients with Asian sourcing operations.
Industry specific skills, leaders & innovators – we bring best practices & insights relevant to you. Small, nimble & adapt to change, there’s a reason we work with the biggest in the game.
As experienced specialists, we focus on partnering with you and are an extension of your team & a part of your world.
With a great ratio of industry experts and strategy consultants, we strive for the maximum impact in the shortest amount of time.
Process, People, System, Repeat.
Focusing on process and people, we are able to get the right solution for the business. Unique approaches to workshops to make processes lean, analytical skills that can develop mini-tools to prove concepts before scaling.
We are output driven & focus on the issues - no impact, no project.
We are not generalists
We are not conference room warriors
We are not system developers
Weave can add value where other firms cannot
15
Supply Chain Experts
SINGAPORE19th floor, 3 Phillip St, Singapore
HONG KONG8th Floor, TAL Building, 49 Austin Road, Kowloon
U.S.A14th Floor, 415 Madison Avenue, New York City
Vietnam46th Floor, Bitexco Financial Tower2 Hai Trieu Street, Ben Nghe Ward, District 1, Ho Chi Minh City
www.weavenow.com
Weave Services Limited
1616
Challenges
CASE STUDY – ASOS warehouse glitch case that lost them 25M USD
Source: SupplyChainDive
COMPANY
ASOS is a £2.4 billion British
online fashion and cosmetic
retailer founded in 2000. The
website sells over 850 brands
and ships to 196 countries
IMPACT
• Sales1 Deployment of a new automated warehouse management
and warehouse control systems disrupted warehouse operations
• Systems failed to catch up with inventory flow rate, creating inbound backlog
• Reduced inventory available to customers
2 Initiatives to build up brand awareness and offering in the US did not run smooth
• Some of the brands have not shipped to the US before and struggle with compliance issues
• Failed to build up an inventory at warehouse
• Failed to maintain optimal stock level (80% of optimal)
• Margins
£20 – 25 million
250 basis points
due to the costs associated with tech fixes and price cuts to help retain and win back disappointed consumers