1. Supply Chain & Technology Report Private Label
Publication date:
November 2018
Next publication:
December 2019
Supply Chain & Technology Report
Private Label
Supply Chain & Technology
Private Label

2. Supply Chain Strategy
The scale of the informal retail or spaza market has grown steadily and continues to represent a significant force in the South African retail industry
Manufacturers have responded to this opportunity by placing traditional trade at the forefront of their route-to-market efforts, establishing formal work groups and engaging with selected partners to better execute their distribution strategy in this channel
In addition, the growth of formal retail stores in township areas, the strengthening of independent wholesalers, and the increasing urgency of distribution businesses to utilise their spare capacity, has given suppliers more options than ever before to reach the consumers which have traditionally been serviced by the Masscash Wholesale customer. These, in turn, place added pressure on the Jumbo business
The Masscash Wholesale strategic advantage lies in its extensive reach (store footprint) and configuration of assets (Shield, Wholesale, Shield online, Massmart Logistics Services) that enables the business to position itself as a supply chain solution for both independent retail and suppliers
Within this context, the Masscash Wholesale supply chain strategy is rooted in the need to expand its business offering to become the preferred low cost distributor for its key suppliers into the informal trade
To this end, an effective inbound, primary distribution network and superior in-store, tertiary distribution capability are needed
Several strategies at both Group and Divisional level have been implemented to achieve this goal:
Optimising of the Division’s distribution fleet to better service regional customers (fleet currently sits at vehicles)
Centralising the delivery fleet management process at the “Transport Control Tower” at Head Office
Driving supply chain collaboration with the Massmart Group (Massmart Logistics Service – MLS)
Implementation of an integrated Route-to-Market Project designed to streamline outbound distribution
Masscash Wholesale plans to implement this supply strategy by leveraging off its existing asset base and national customer footprint

3. ZENO
Revolutionary online and mobile planning, routing and workflow management simplifies your scheduling and takes all the speed bumps out of planning your logistics. Schedule your delivery, sales and service teams efficiently, effectively and in real-time
Supply Chain Strategy
Masscash Wholesale is firmly focused on exploring supply chain opportunities for accelerated cost efficiencies. This focus includes aspects such as back haul, collections, factory gate pricing, ranging, order fills and in-stock levels
Currently, the majority of supplier product is distributed via direct drop shipment to Masscash Wholesale stores. This is set to change as the broader route-to-market project looks to re-examine the inbound supply chain structure:
Enhanced collaboration – Massmart
Collaboration across and within Massmart divisions continues to be a focus for the Massmart Group as a whole. Core functional areas for intra-Group collaboration, include supply chain, IT, real estate, merchandise and private label, inter alia.
Collaboration efforts across the total Massmart business are being overseen by Llewellyn Steeneveldt, Group Commercial Executive, and Richard Inskip, Group Supply Chain & Logistics Executive. Richard Inskip’s focus was extended in late in his additional role as Group Chief Information Officer to include coordination and optimisation across the Group’s IT efforts
Within Masscash Wholesale, the drive towards enhanced collaboration applies to a number of functional areas, including the buying function and supply chain
The strategic intent for 2018/2019 is the implementation of a Group DC service and network function with the aim of reducing the cost-to-serve by at least 1%.
The intention is for Masscash to utilise Massmart scale across primary (ex-factory gate to DC), secondary (DC to store) and, in time, tertiary (DC/store to customer) distribution channels
The use of Massmart Logistics Services (MLS) assets (i.e. its fleet) for primary distribution purposes was specifically planned for Masscash Wholesale in 2018/2019 and implementation is evident within the division

4. Supply Chain Strategy Enhanced collaboration – Massmart (cont.)
ZENO
Revolutionary online and mobile planning, routing and workflow management simplifies your scheduling and takes all the speed bumps out of planning your logistics. Schedule your delivery, sales and service teams efficiently, effectively and in real-time
Supply Chain Strategy
Enhanced collaboration – Massmart (cont.)
The Group has made good progress in terms of providing reliable and cost-effective availability of any product in any format or channel, by leveraging Group scale. In addition, the savings achieved from reduced operating costs have resulted in improved margin and working capital
Supplier onboarding through the Massmart distribution network continues to grow
Masscash continues to generate transport efficiencies resulting from better leverage of Group scale through network planning

5. Inbound Supply Chain Saverite
ZENO
Revolutionary online and mobile planning, routing and workflow management simplifies your scheduling and takes all the speed bumps out of planning your logistics. Schedule your delivery, sales and service teams efficiently, effectively and in real-time
Inbound Supply Chain
Saverite
Saverite stores are primarily supplied through Jumbo Wholesale Regional stores
The choice of purchasing through C&C or Jumbo Shield remains the members’
Minimum drop orders are beginning to have the impact of shifting more orders through the C&C
Store clustering exercise currently underway to optimise procurement and distribution ex wholesale
New Route-to-Market Project expected to deliver enhanced efficiencies in Wholesale-to-Saverite distribution
Butchery:
Regional butchery supplier initiative has been rolled out including the circulation of weekly butchery supplier price lists to members
Fresh Fruit & Veg:
Aim is to distribute weekly F&V from pilot DC’s in Gauteng & Welkom
Achieve a 10% fresh sales contribution from Saverite members
Fruitspot (Massfresh) to service Saverite stores with fresh fruit & veg
Shield
Majority of stock is delivered via supplier direct drop shipment to store
Opportunity to incorporate the new Route-to-Market model into Shield distribution going forward

6. Outbound Supply Chain Route-to-Market Project
A route-to-market project initiated in 2017 is still underway, designed to streamline the outbound distribution process and render it as efficient and cost effective as possible. The project is intended to:
Build on existing in-store procedures with updated technology
Develop partnerships with technology suppliers that provide expertise to compliment the Masscash business
Utilise the ‘Transport Control Tower’ for tertiary distribution fleet tracking
Geo-map the informal Retail universe
Develop an enhanced Shield sales force which enables Masscash to:
Continue to grow sales to its existing traders
Grow sales with new traders targeted by the Shield sales force
Deliver on its customer promise
Grow market share
Ensure relevance to suppliers
Route-to-market customer fulfilment architecture: The route-to-market project involves several technology elements:
Customer sales enablement: Spring hand-held technology, which assists with stock management and call-cycle management
Order fulfilment and store operations: ARCH Retail and ARCH Enterprise systems, for effective store and regional order management
Transport planning and management:
Online and mobile logistics planning, routing and workflow management system
Fleet management system
Flash mobile money handling and payments solution which assists Jumbo Wholesale customers to digitise cash

7. Technology
Enhanced data sharing capabilities and rendering of technology as a key enabler, continue as primary focus areas for Jumbo. This includes:
Recently piloted business-to-business online ordering programme
Planned roll-out to all regions in 2017, enabling enhanced data gathering and sharing with suppliers
Limited system functionality presented a barrier to effective roll-out in 2016, however plans are underway to potentially combine the Wholesale and Shield online interface for enhanced effectiveness This will allow for:
Full sales data reporting
Regional insights
Forecasting efficiencies
Insight sharing with customers in order to achieve efficiencies across the store layout, category management and merchandising space
Sharp Rewards loyalty programme
Planned roll-out across all regions, beginning July 1, designed to deliver instant rewards into the mass market and provide extensive data gathering capabilities. A successful pilot programme across 5 wholesale stores, 50 customer outlets and connecting with 16,000 shoppers was implemented in 2016, resulting in 43% sales growth in participating brands
ARCH Enterprise system
Within the construct of the new regional buying model, enhanced data sharing capabilities with suppliers is a clear objective
ARCH has now been fully implemented across the Division, both wholesale and franchise, for automated process implementation
All wholesale stores are now online with ARCH
Several Saverite stores have been moved to the ARCH system
All Saverite members are able to leverage the Shield Online automated buying system to assist in streamlining the ordering process, drive efficiencies and gain associated cost savings
Data currently being read out of 62 Saverite and 9 Club 10 outlets

8. Technology - Masscash Wholesale
Suppliers are afforded off-site data analysis and management capabilities, driving more efficient ranging decision making & supply capability
Data analysis available includes, inter alia:
Products comprising the customer’s basket during a given period
Day in the month, week and time of purchase
Number of transactions per customer, per store over a given period
Frequency of customer visits for a product, brand or total supplier basket

9. Technology – Jumbo Shield
Technology - Saverite
Although the roll-out of data sharing has been slower than expected, at present 62 Saverite stores and ten Club 10 outlets effectively share their data with the Jumbo Wholesale
Involves the integration of cash & carry and Shield deals into the Saverite members’ buying system
Renders the buying and administration processes more efficient
Provides accessibility to sales-out scan data for analysis in targeted Saverite stores
Technology – Jumbo Shield
Ongoing ranging gap analysis for optimised cash & carry outbound distribution (Jumbo Shield and C&C)
Currently Shield operates off a financial accounting system which was known as Great Plains (now Microsoft Dynamics GP)
Procurement and stock file data warehousing is run off the ARCH Retail IT system
In 2012 Jumbo successfully piloted an enhanced buying functionality for Saverite members and pilot tested the integration of cash and carry and Shield deals into the Saverite member’s buying system

10. Maryla Masojada | Head Analyst Kate Shirley | Retail Analyst
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Maryla Masojada | Lead Analyst Kate Shirley | Retail Analyst
Kate Shirley | Retail Analyst – New Channels Maryla Masojada |Head Research
Kate Shirley | Retail Analyst – New Channels Maryla Masojada |Head Research
Kate Shirley | Retail Analyst – New Channels Maryla Masojada | Head Research
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Disclaimer
These materials and the information contained herein are collated by TI* referencing a wide range of public domain data sources, face-to-face interviews, retailer presentations and financial reports, and are intended to provide general information about the South African consumer goods trading environment and selected retailers, and are not intended as an exhaustive treatment of such subjects.
Whilst every effort has been made to ensure that the information published in this work is accurate, your use of these and the information contained herein is at your own risk. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business, and TI makes no express or implied representations or warranties regarding the accuracy of the information herein.
TI will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statute, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials and the information contained herein.
TI expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security, and accuracy.
* TI refers to The Retail Workshop (Pty) Ltd trading as Trade Intelligence
Disclaimer
These materials and the information contained herein are collated by TI* referencing a wide range of public domain data sources, face-to-face interviews, retailer presentations and financial reports, and are intended to provide general information about the South African consumer goods trading environment and selected retailers, and are not intended as an exhaustive treatment of such subjects.
Whilst every effort has been made to ensure that the information published in this work is accurate, your use of these and the information contained herein is at your own risk. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business, and TI makes no express or implied representations or warranties regarding the accuracy of the information herein.
TI will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statute, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials and the information contained herein.
TI expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security, and accuracy.
* TI refers to The Retail Workshop (Pty) Ltd trading as Trade Intelligence
Disclaimer
These materials and the information contained herein are collated by TI* referencing a wide range of public domain data sources, face-to-face interviews, retailer presentations and financial reports, and are intended to provide general information about the South African consumer goods trading environment and selected retailers, and are not intended as an exhaustive treatment of such subjects.
Whilst every effort has been made to ensure that the information published in this work is accurate, your use of these and the information contained herein is at your own risk. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business, and TI makes no express or implied representations or warranties regarding the accuracy of the information herein.
TI will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statute, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials and the information contained herein.
TI expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security, and accuracy.
* TI refers to The Retail Workshop (Pty) Ltd trading as Trade Intelligence
Disclaimer
These materials and the information contained herein are collated by TI* referencing a wide range of public domain data sources, face-to-face interviews, retailer presentations and financial reports, and are intended to provide general information about the South African consumer goods trading environment and selected retailers, and are not intended as an exhaustive treatment of such subjects.
Whilst every effort has been made to ensure that the information published in this work is accurate, your use of these and the information contained herein is at your own risk. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business, and TI makes no express or implied representations or warranties regarding the accuracy of the information herein.
TI will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statute, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials and the information contained herein.
TI expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security, and accuracy.
Disclaimer
These materials and the information contained herein are collated by TI* referencing a wide range of public domain data sources, face-to-face interviews, retailer presentations and financial reports, and are intended to provide general information about the South African consumer goods trading environment and selected retailers, and are not intended as an exhaustive treatment of such subjects.
Whilst every effort has been made to ensure that the information published in this work is accurate, your use of these and the information contained herein is at your own risk. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business, and TI makes no express or implied representations or warranties regarding the accuracy of the information herein.
TI will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statute, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials and the information contained herein.
TI expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security, and accuracy.
* TI refers to The Retail Workshop (Pty) Ltd trading as Trade Intelligence