Basic capacity training

In-store logistics programme/17-09-2012

© Inter IKEA Systems B.V. 2012

Welcome to the retail logistic “basic capacity training”

Yesterday

Today



Background and history



Future challenges



Future challenges

- Aging population, less acceptance to ”do your part” - Ecommerce (Multi-channel retailing)- Smaller store sizes in smaller markets- Increasing difficulty finding retail locations- More pressure to reduce operational costs and the need to increase deliveries direct from the supplier



What is capacity on a long term perspective?

Let the group discuss as much as they can and bring out all the most important parts. Write them down on a white board or clipboard.



The store turnover



The store rangeRange

The product range is our identity… Our

identity needs space



The store range



The needed sales area (square meters) is based on:

• Annual Sold Volume

• Stocked Range Size

• Furniture split

ExampleStocked range size: 4 articlesAnnual sold volume: 70.000m3Furniture split: 50%

Stocked range size: 4 articlesAnnual sold volume: 120.000m3Furniture split: 50%

10m215m2

The store spaceSpace


© Inter IKEA Systems B.V. 2012Example

Stocked range size: 4 articlesAnnual sold volume: 70.000m3Local stock week requirement: 4

Stocked range size: 4 articlesAnnual sold volume: 120.000m3Local stock week requirement: 4

20m330m3

The store space

The needed storage capacity (cubic meters) is based on

• Annual Sold Volume

• Stocked Range Size

• Local stock week requirement


Cash & Carry Sold Volumes

Stocked Range Space

The higher the C&C Sold volumes are,

the higher the required space is

The higher the Stocked Range size is, the higher

the required Space is

Sales to Range to Space

Stocked range size does not always increase the sold volumes, but it increases the customer experience

Correctly dimensioned stores do not always increase the sold

volumes, but it increases the customer experience



What is it like to buy articles at an under dimensioned IKEA store?

•Perceived customer availability is threatened•Big volume/low price perception is threatened•Reduced possibility for large volume activities•Direct flow from the supplier is threatened•Potentially a higher number of centrally picked order lines•Increased need for short term storage solutions during peak sales period•Productivity is threatened due to the need to move and consolidate storage•Perceived customer availability is threatened•Inspiration is reduced•The range may be reduced which can surprise the customer



What is it like to buy articles at an under dimensioned IKEA store?

• Perceived customer availability: because sales space sizes are smaller, it means there is a higher chance that the article will be out of stock

• Inspiration: correctly dimensioned stores show a higher rating for inspiration in both Brand Capital and ICSS

• Costs: smaller sales spaces mean that they have to be replenished more often

• Productivity is threatened• Higher number of centrally picked order lines• More potential for internal damages• Customer/coworker satisfaction• External buildings generally have a much lower voice index• Customers are much more impressed with a correctly dimensioned Self-serve

furniture area



Consequences of under dimensioning

Green capacity: the areas Green capacity: the areas are equal to or bigger are equal to or bigger than those recommended than those recommended by the sales to range to by the sales to range to space matrix.space matrix.

Yellow capacity: the areas Yellow capacity: the areas are up to 20% smaller than are up to 20% smaller than those recommended.those recommended.

Red capacity: the areas are Red capacity: the areas are more than 20% smaller more than 20% smaller than those recommended.than those recommended.



Long Term Capacity solutions

Movie 15 min

http://toolbox.inter-ikea.com/sites/IKEAConcept/Articles/Pages/Introduction%20to%20capacity.aspx?NodeId=d2f37118-e0ce-4560-8686-a719a8f158f9



What is capacity on a business year cycle perspective?

Let the group discuss as much as they can and bring out all the most important parts. Write them down on a white board or clipboard.



What is capacity on a business year cycle perspective?

• Starting point and success factor: commercial calendar• Aligning commercial calendar with operational and space needs in

the store• Identifying the short term actions to support the business until long-

term capacity solutions are in place• Lower time requirements and developed on store level• Identifying constraints and helping to prioritise the actions• Supporting the decisions Favorece la toma de decisiones• Short term capacity plan implemented in the store creates visibility

and supports the store action plan• Capacity utilization to get best availibility at the lower possible cost.



What is capacity on a business year cycle perspective? Example

Basic capacity training

Documents

Transcript of Basic capacity training