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, 3 rd 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 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 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

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