enabling a demand driven supply chain with teradata at ecr moscow feb 2014
DESCRIPTION
Learn how Teradata Solutions and Business Consulting can help you with Enabling a Demand Driven Supply Chain. This was presented at ECR meeting at Moscow on February 12, 2014. Including some Retail customer casesTRANSCRIPT
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Category Management supported by Detailed data
ENABLING A DEMAND
DRIVEN SUPPLY CHAIN
(DDSC)
ENABLING A DEMAND
DRIVEN SUPPLY CHAIN
(DDSC)
Moscow,
February 12th , 2014
Frank Vullers
Senior Industry Consultant Retail
Teradata EMEA
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Category Management supported by Detailed data
AGENDA
Supply Chain Management
SCM Solutions Customer
Cases Supply Chain Management
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3 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
Effect of Poor shelf availability
Both Retailers and Manufacturers suffer when Item is Out of Stock
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4 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
From Traditional to Demand Driven SCM
• Focus on Assets & Products
• SCM Costs as % of turnover
• Supply chain scope is Logistics
• Visibility only inventory on-hand
• incremental SC improvements
• Sales & Operations planning is not a business discipline
• Focus on Customer service
• Service levels, Out of Stock
• Scope on Supply networks
• Visibility across the entire chain
• Temporal models & Analytics sense future problems & Opportunities
• Sales & Operations plans are disciplined and effective
Traditional Demand Driven
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5 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
From Traditional to Demand Driven SCM Traditional Demand Driven
Not every company is at once fully Demand driven
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6 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
The Demand Chain Inputs
• Store/Sku: Forecasts, Orders, Allocations
• Individual location based historical sales, future events
Results
• Accurate demand forecast
• Replenishment plans
• Allocation plan
Inputs
• PO data, Partners, Orders, ASN‟s
• Expected ship and arrival (ETA‟s)
• Anticipated events
End Results
• Product in the right place at the right time
• Improved sales and turns
• Customer satisfaction
How much of each item do I need to have at each Location and when?
Demand Pulls Product
Is the ordered product moving efficiently through the supply chain to the Locations,
according to plan and latest trends?
Product Flows Efficiently
Consumer DC Source Carrier Store
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7 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
Strategic Challenges: SCM & Russia
Courtesy to G. Moore‟s “Living on the fault line”
Supply chain Planning
Sourcing Returns
• Customers & large territory
• Forecasting challenging
• local suppliers poor reliability
• importing from abroad • convincing foreign suppliers
to move to Russia
• Staff turnover is high • lack of well-trained
qualified people
• Russia the largest country
• lack of warehouses • fragmented market
• reverse logistics processes & cross the border again.
Production Delivery
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8 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
Strategies for these Challenges
Courtesy to G. Moore‟s “Living on the fault line”
Supply chain Planning
Production Delivery Returns
supply chain strategy oriented
towards effectiveness, flexibility and
responsiveness
demand forecasts and out-of-stock levels can
be improved through better information sharing
the right transportation mode
And balancing transportation costs, inventory costs and
required responsiveness levels
Sourcing
keep extra safety stocks to overcome improvements in
information sharing
Consumers do want a broad range of choice,
but are willing to switch if products are unavailable
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9 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC) Category Management supported by Detailed data
AGENDA
Supply Chain Management
SCM Solutions Customer
Cases
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10 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
SCM Solutions
10
SCOR® Framework How Can Teradata Help ?
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11 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
Quick Start Forecasts for Basic and Short Season Products
Use Actual Results or Forecast Values, link multiple skus
Orders/Allocations calculated on
forecasts/ current-projected on hand
inventory
Point in Time and Time Phased Orders
Calculates Forecast Lifts, Simulation
Modeled Versus Historical Events
Assigns Sku‟s to Models
Long and Short Seasons
Seasonal Profile
Best Fit Models
Store SKU, Scored Weekly
Client Defined Adaptive Response
Deseasonalized ARS, Best Fit
Intelligent Product Introduction
Weekly SKU Ranking
Ranking by location,
merchandise groups SKU
Ranking
A B C D E
A
B
C
D
E
60 %
Promotion Lifts
Time Phased Demand Plan
Allocation
Demand Chain Manager DCM Better Forecasting & Replenishment
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12 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
Poor BI Performance & Monitoring
Ad-Hoc Tools and Processes
Multiple Sources
Multiple Data Marts
Inconsistent Data Sourcing
Disparate Reports
Frustrated End-users & Decision Makers
Product Management
Regulatory Reporting
Customer
Profitability
Customer Care
Sales
Operations
CRM
Marketing
Finance
The IT Hair Ball Analytics and Reporting
The Excel Army
Real Time Insight
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13 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
Integrated Data Warehouse+
Dedicated Tools and Aligned
Processes
Multiple Sources
Integrated Data
Warehouse
Consistent Data Sourcing
Integrated reports
Happy End-users & Decision Makers
Product Management
Regulatory Reporting
Customer
Profitability
Customer Care
Sales
Operations
CRM
Marketing
Finance
IT Lasagna Analytics and Reporting
Proper BI Tools
ITEM
LOCATION SALES
Retail Data Model (RDM)
Real Time Insight
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14 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
Retail / Manufacturing experiences
Scalable Size – Users – Usage
Realtime Reporting – Alerting – Monitoring
Fast integration of datamarts
Retail business Knowledge
Benefits
Real Time Insight
Detailed Cost Analysis
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15 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC) Category Management supported by Detailed data
AGENDA
Supply Chain Management
SCM Solutions Customer
Cases
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16 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
Customer cases
Case 1: HEMA Demand Chain Manager
Better Forecast & Replenishment
Case 2: Monoprix On Shelf Availability
Case 3: Shipment Tracking
Case 4: Tesco Link
Real time insight
Case 5: Transportation optimization
Detailed Cost Analysis
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17 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
Become demand driven
Objective
• Replacement of supply chain steering model
• Teradata Demand Chain manager (DCM) application became foundation of HEMA new supply chain model
Analysis & Actions
Case 1: HEMA DCM
• Opened 200 stores (450->664) still delivered from same DC
• Inventory levels exceeded objectives
• Less frequent delivery to stores
• Side effect: Reporting speeded up
Result
Better Forecasting & Replenishment
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18 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
HEMA Today…
• More than 650 stores in multiple countries (NL, BE, F, D)
> Including 150 + Franchise stores
• Variety store
• Hardgoods, food and fashion items
• Private label
• Award winning formula 0
100
200
300
400
500
600
700
1960 1980 2000 2020
Better Forecasting & Replenishment
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19 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
Suppliers DC Continuous (Pull)
DC Promotions (Push)
Stores
Wholesale
Internet
• 500 suppliers
• Europe and Far East
• Leadtime 1 day – 26 weeks
• All private label and HEMA design
HEMA Supply Chain
• One central DC
> Highly automated
• Continuous items
> Call off orders based on forecast
• Seasonal items and promotions
> Promotion uplift calculation; confirmed by all stores
• General
> Modular assortments
> Assortments per store
• Pull (continuous items)
> Min – Max system;
> 1-5 times per week
> Lead time DC: 1-2 days
• Push (including promotions of pull items)
> Allocation of stocks
> Delivered 1 – 2 weeks before
Better Forecasting & Replenishment
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20 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
20
What is „Deliver to Demand‟ concept?
• Deliver to Demand enables us to become
demand driven
• Logistical streams will become automatic
• Share forecast with suppliers early in
planningsprocess
„Deliver
to
Demand
‟
Better Forecasting & Replenishment
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21 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
21
Why did HEMA need this concept ?
The supply chain steering model was out of date
Based on old principles
No relation between store, DC planning and promotional push
No input of local influences
Not proactive but reactive;
Forecasts created outside systems (Excel) for Push streams. No
link with real Sales.
Better Forecasting & Replenishment
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22 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
• Phase 1: Continuous products 2009
• Phase 2.1: Long season: Push-Pull-Push 2010
• Phase 2.2: Short season Push- 2nd Push 2010
• Phase 3.1: Ambient Food (Whine, etc) 2011
• Upgrade to DCM version 4.1 2012
• Phase 3.2 Food Cakes, pastry
• Next Steps
Hema Project Better Forecasting & Replenishment
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23 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
Fashion/ Softlines
Grocery/ Liquor
Hardlines
Food & Beverage
Drugs
Health & Beauty
Apparel
Shoes
Home Furnishings
Consumer Electronics
Furniture/Appliances
Building Materials
Auto Parts
Office Supplies
Books,Music,Software
Accessories
Demand Chain Manager(DCM) Customers
Handleman Company
SILKROUTE
Better Forecasting & Replenishment
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24 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
Needed to understand the causes of OOS
Objective
• Analysis root causes
• On Shelf Availability(OSA) report for top 2000 SKUs
• to identify both operational and supply chain issues
• predicts on shelf out of stocks in order to prevent them
Analysis & Actions
Case 2: On Shelf Availability (OSA)
• Reduction OOS resulting in 1% increase in sales
• Improved in-store procedures
• Improved stock accuracy
Result
Real Time Insight
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25 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
Letting Business customers check their shipment status online, and get rid of separate datamart
Objective
• Data loads into Data Warehouse to meet service level agreements, and for route optimization and profitability analytics
• Transaction data now loads within 15 minutes to Teradata with direct access via the web.
Analysis & Actions
Case 3: Shipment Tracking
• 36,000 self-service queries per day
• 35% reduction in calls to Customer Care center
• Eliminated ODS
Result
Real Time Insight
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26 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
Case 4: Tesco Link
Leverage Suppliers knowledge on categories
Objective
• Lean backoffice • One consistent way of
working
Result
• Give Suppliers entrance to Tesco data
• Sharing detailed information on sales data
• Not only viewing but also Downloading data
Analysis & Actions
Real Time Insight
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27 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC)
optimize Freight loads over the different Grocery retail chains in order to have a profitable own Fleet
Objective
• Started with defining best KPI‟s
• Making right choice between internal fleet and Contractors
• Create best route based on costs, and service levels
Analysis & Actions
Case 5: Transportation Optimization
• Own Application gives insight in break even point and when to choose which transport
Result
Detailed Cost Analysis
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28 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC) Category Management supported by Detailed data
AGENDA
Supply Chain Management
SCM Solutions Customer
Cases
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29 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC) Category Management supported by Detailed data
QUESTIONS?
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30 2/18/2014 Enabling a Demand Driven Supply Chain (DDSC) Category Management supported by Detailed data
QUESTIONS? THANKS YOU FOR
ATTENTION
Frank Vullers
Senior Industry Consultant Retail Teradata EMEA
https://twitter.com/FrankVullers