Igh presentation - value chain excellence in retail

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Igh presentation - value chain excellence in retail

  1. 1. Wassenaar, June 1st 2010 Value Chain Excellence in Retail IG&H perspective on making the value chain really work© IG&H Consulting & Interim
  2. 2. IG&H survey: “Value Chain Mirror” helps retailersmaking their value chains really work Value Chain Mirror Scoping - Retail Consumer industry Supplier Supplier SupplierVC Partners - Mirror Brand Retailer Shop Shop Shop Shop Shop First year pilot - Fashion IndustryVC Capabilities - Mirror Category Supply Chain Mgmt Mgmt In-season Management© IG&H Consulting & Interim, Woerden – The Netherlands 2010 Elsevier Retail Summit 2010 2
  3. 3. IG&H survey: “Value Chain Mirror” helps retailersmaking their value chains really work (II)Context Approach & scope IG&H commitment towards retail excellence  Interviews & case studies per participant Changing market demands (in the rebound)  Cross participant findings at Retail Summit Value Chain alignment becoming differentiator  Netherlands based / European scope  Annual survey - first year: Fashion deep diveObjective  Core topics: How to make value chain excellence really work  Category Management Derive key success factors, beyond the obvious  Supply Chain Management Show a mirror and help participant to next level  In season / markdown managementDeliverables In-depth analysis & benchmark of participant’s level of Value Chain excellence Analysis of processes & value chain alignment  Strategical planning process  Tactical planning process  In season execution Report and feedback session Concrete recommendations & “Get-to-work list”© IG&H Consulting & Interim, Woerden – The Netherlands 2010 Elsevier Retail Summit 2010 3
  4. 4. Value chain leadership: Still enormous potential forincreased consumer value and reduction of waste Consumer Value....  Always a reason to go the store  Inspiring & fitting garmentsVALUE  Never disappointments in store  Available, easy to find  Good price/quality balance  Good service Waste....  Excessive markdowns  ShrinkageWASTE  Stock-outs  Quality issues  Cost loading, inefficiency © IG&H Consulting & Interim, Woerden – The Netherlands 2010 Elsevier Retail Summit 2010 4
  5. 5. Value chain excellence: Excellence is “market alignment”AND “excellent execution” .... at the right levelValue chain excellence How will YOU compete? “Value chain leader” 2. Excellent “Supply Chain 3. Move to execution responsive” next level “Market driven” “Having the basics right” 1. Market alignment© IG&H Consulting & Interim, Woerden – The Netherlands 2010 Elsevier Retail Summit 2010 5
  6. 6. Value chain excellence: Retail DNA makes value chainexcellence inherently challengingMain difficulties What’s YOUR challenge? “Value chain leader” Lack of direction Poor execution Little perseverance  Unclear value chain  IT/outsourcing as  Leadership not “Supply-chain vision the (wrong) answer involved responsive”  Value chain partners  Top-down  Failure to empower not aligned programme line management  Competence gaps  Resistance to  Lack of ownership “Market not recognized change  ... driven”  Quick-win view  ...  ... “Having the basics right”© IG&H Consulting & Interim, Woerden – The Netherlands 2010 Elsevier Retail Summit 2010 6
  7. 7. Vision & direction: Commit value chain leadershiptowards a “True North” consumer driven visionSuccess factors Vision & direction True North  Develop “true north” consumer Vision experience and commit internal and external Value Chain leaders  Define realistic time path  European fashion retailer: Consumer-back vision on fast fashion  Fully understand competencies to model (continuous source of reference) deploy, internally and at key partners  European food retailer: New value-chain innovation role separated from day- to-day retail execution  Make key changes in VC operating  Global coffee retailer: model - prior to implementation Vision on sustainability required supplier collaboration to reduce “value-chain footprint”  Structure strategic value chain partner  Leading Dutch department chain: Buyer-planner organisation support fast-fashion vision relationships upfront  Leading home improvement retailer: Easy-to-shop principles translated to accelerate  Provide clear implementation principles assortment/merchandise renewal© IG&H Consulting & Interim, Woerden – The Netherlands 2010 Elsevier Retail Summit 2010 7
  8. 8. Robust processes: Help the line, step-by-step,build processes and deliver value at (web-)store levelSuccess factors Robust processes Build robust  Start bottom up, in the store, know the processes customer  First successes: create enthousiasm  Real focus on customer value -  DIY retailer: relentless elimination of waste Developing new category mgmt process  talked to 2000 consumers , in store, to analyse decision tree  Multi-country shoe retailer:  Focused and pragmatic step-by-step Implementation of Smart buying (simple process & changes: few at a time, speed will come tools, small steps  Leading food retailer:  Line-driven, with continued senior Clear definition and implementation of meaningful category captain roles involvement - not a staff/project activity  European Fashion retailer: Long term relationships with all value chain partners to  Involve value chain partners: open amintain extremely flexible supply chain and smart mix of worldwide and regional production facilities dialogue, become excellent together© IG&H Consulting & Interim, Woerden – The Netherlands 2010 Elsevier Retail Summit 2010 8
  9. 9. Clockwork: Empower line management to buildcontinuous improvement cultureSuccess factors Clockwork Build  Develop and implement new value clockwork chain capabilities (embedded in training)  Continuous improvement of processes with trust based partnerships  Fashion retailer: Central corporate value : “Next time we do it better” +  Spend >80% of the time in the store, fashion retailer training academy in the market for new opportunities  Leading global fashion retailer: Continous alignment during design process in combined teams (design + sourcing + product dev.)  Operational management - visualisation  Leading global food retailer: at all levels (consumer data) Senior management leads through active presence in store  Performance management and clear  Sports goods manufacturer and retailer: Markdown management teams analysing day-to-day standards results© IG&H Consulting & Interim, Woerden – The Netherlands 2010 Elsevier Retail Summit 2010 9
  10. 10. Value chain excellence: A value chain improvementapproach that builds on retail DNAValue chain excellence What’s YOUR value chain DNA? Next Value chain LevelSmall steps Implement to change clockwork Build robust processes True North vision Current value chain level 3 year horizon© IG&H Consulting & Interim, Woerden – The Netherlands 2010 Elsevier Retail Summit 2010 10
  11. 11. Retail summit 2010: Do’s and Don’ts to achieveexcellence reflect retail DNA DON’T (conflicts with retail DNA) DO (builds on retail DNA) 1. Holistic vision / current operating 1. True north consumer driven view, change model operating model 2. Big ambitions – next quarter delivery of 2. Vision driven – but gradual clockwork results building approach 3. Top-down improvement programmes 3. Bottom-up, from the store, line-driven (HQ driven) approach 4. Senior management delegates 4. Senior management fully involved in execution execution - makes it highest priority 5. Stay locked into competitive 5. Work with value chain partners to bidding/tendering trap improve and create value 6. Centralise decision making, based on 6. Empower category and store managers numbers and facts to make decisions 7. People in the store and DC’s are a cost 7. New contract with employees who pool subscribe to retail excellence© IG&H Consulting & Interim, Woerden – The Netherlands 2010 Elsevier Retail Summit 2010 11
  12. 12. Wassenaar, June 1st 2010 Value Chain Excellence in Retail IG&H perspective on making the value chain really work© IG&H Consulting & Interim
  13. 13. IG&H: 150 professionals making strategy work - Combining deepindustry know-how with the ability to put strategy into executionIG&H Retail Menu Recent client experiences Strategy  Multi-format, multi-country sourcing implementation Format differentiation  Category, merchandise (Lean) Retail Service Excellence strategy and implementation Marketing effectiveness/ROI  Cost to serve / supply-chain model optimization Operations Markets Category management 2.0  Lean implementation within Margin Catalyst a large national retailer Supply Chain Management & Logistics  Service excellence programme Supplier value - Smart buying  E-fulfillment strategy and Retail Sustainability solution development  Promotion/price effectiveness Execution review (margin catalyst) © IG&H Consulting & Interim, Woerden – The Netherlands 2010 Elsevier Retail Summit 2010 13

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