Improving availability strategically

In store availability

• Whose responsibility ?• Who cares?• Shelf filling or in-store logistics?• In-store DC or DB (disorganised backroom)?• Conflicting store priorities• Knowing where the problem lies

Supplying the chain

• Speed of retail supply chain vs retail stock reduction programme

• Target the products for improvement

• No link to real demand and true profitability

Supplying the chain cont.

• The players– The retailer (stores, DC’s, Supply chain, planners,

buyers, marketing, finance)– The manufacturer (sales, logistics, planners,

marketing, production, buying, finance) – The external providers (POP, 3rd Party Salesforce)

• The enablers– People, systems and processes

• The challenge– Linking the enablers both in and between the players

Finding a solution

• In Store– In store logistics not high priority…compared with

checkout queues

• DC to Store– Responsiveness of SBO systems to real demand

• Manufacturer to DC– This must be right first, but not normally the source of

on shelf availability issues

Imagine

• Knowing true demand• Being able to guarantee response to the

immediate problem• Being able to capture it for the future• Being able to prove the benefits

Imagine

• No technological barriers

• No process barriers

• No people barriers

• No resource barriers

The need

• Technology exists to…

• Make the links between people, processes and systems at all levels

• Ensure busy people only have to action essential requirements

• Pull all contributions together in a productive way• Balance personal, departmental & business goals

Imagine …at the fixture

1. Here’s a store merchandiser

checking for stock availability or

running a promotion. She is

working to a set process and

bringing data to a process control

tool

3. She finds a product very low on stock (level 1) in the store

4. She records the product, then checks the backroom stock and computer stock herself. This data is sent to the buyer for the product category via the database. She puts available stock on the shelf.

2. She has the process tool available on her mobile phone

Imagine …with the retail buyer

5. This is the buyer. His process

models match the merchandiser’s

working process exactly

6. He receives the SMS, and opens

up the model in his browser

7. The model is configured to match

the costs he controls, and the

decisions he makes. It automatically

computes the profit impact of the

out of stock considering shelf space

and delivery costs Vs lost profit in

the remaining promotion period

Imagine …decision and dilemma

8. The buyer’s models tell the return on ordering the product exceeds the cost. The process tool automatically asked if the supplier has stock

9. Process tool does this by sending an email to the supplier’s sales manager (pictured opposite)

10. Supplier uses her cost model to identify the lowest cost method of delivering an urgent part order, and once decided, the process tool executes the transaction

12. This information is passed across to supply chain, marketing and suppliers for implementation

Imagine…sustaining best practice

11. The buyer’s process models tell him what the correct uplift in stores with level 1 or better stock was - for the next time the activity is repeated. They also tell him the most effective Point Of Purchase

13. Supplier uses her cost model to identify the lowest cost way of supplying promotions. The sales uplift data is shared with store managers to improve compliance dramatically. Planograms become based on demand, not supply

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No Promotion

Merchandising and Pre-telephoning

Brand_description (All) Product_Description (All)

Average of units_uplif t

Data_Date

promotion_name_track

Imagine …Permanent solutions to permanent issues

• Availability– Standard lines– Promotions– Launches

• Compliance– Brings the store manager into the loop– Brings store supply into line– Connects all the necessary players

• Store Supply– Based on accurate prediction models

Conclusion

• Availability issues are solvable – now,

BUT

• Do you have the vision and the desire?

Overcoming promotional out-of-stocks to avoid customer

disappointment and improve profit margins