SCM 502 / MIS 503 October 21, 2005 Woolworths Case MBA Team 2: Marcus, Simon, Neil, Serhiy Ramona
Woolworths Case <ul><li>Woolworths Group plc and its problems </li></ul><ul><li>RFID: Technological Review </li></ul><ul><...
Woolworths Main Focuses <ul><li>Principal UK retailer of products for home </li></ul><ul><li>Entertainment (E.UK, 2 Entert...
Woolworths Major Management Strategy <ul><li>Centralize accounting </li></ul><ul><li>Invest in new technology and new info...
Woolworths Major Problems <ul><li>Inventory shrinkage (56%): </li></ul><ul><ul><li>Incorrect shipment deliveries </li></ul...
RFID: Technological Review <ul><li>RFID –  Radio Frequency Identification </li></ul><ul><ul><li>Generic term  for technolo...
An RFID Tag CHIP ANTENNA SUBSTRATE
Active RFID Tags <ul><li>Active Tags </li></ul><ul><ul><li>Catch the attention of the RFID reader by sending out a signal ...
Passive RFID Tags <ul><li>Passive Tags </li></ul><ul><ul><li>Alert the tag to communicate through a reader when the reader...
How RFID works? RFID Tag RFID Reader Middleware Enterprise  System
Why use RFID? <ul><li>Labor-saving technology </li></ul><ul><li>Monitoring and control </li></ul><ul><li>Security </li></u...
Woolworths Pilot Project <ul><li>Serviced its 800+ stores through 4 DC: </li></ul><ul><ul><li>2 primary and 2 seasonal  </...
Woolworths Pilot Project <ul><li>“ Russian Doll” strategy achieves item-level visibility without item-level tags </li></ul...
Woolworths Pilot Project <ul><li>Outbound distribution technologies: </li></ul><ul><ul><li>Automated Storage and Retrieval...
Woolworths Pilot Project
Woolworths Pilot Project <ul><li>SmartChain tracking platform -> focal point of the tracking process </li></ul><ul><ul><li...
Benefits <ul><li>Ability to integrate combination of technologies </li></ul><ul><li>Information and visibility in supply c...
Six Categories of Benefits <ul><li>Shrinkage </li></ul><ul><li>Bookstock Accuracy </li></ul><ul><li>Reduced Labor Costs </...
Shrinkage <ul><li>Better inventory visibility </li></ul><ul><li>Errors corrected in real time </li></ul><ul><li>Automated ...
Bookstock Accuracy <ul><li>Automated update of bookstock </li></ul><ul><li>Higher visibility </li></ul><ul><li>Lower inven...
Reduced Labor Costs <ul><li>Reduced manual check-in </li></ul><ul><li>Reduced updating of stock records </li></ul><ul><li>...
Asset Management <ul><li>Dollies, tote boxes, roll cages </li></ul><ul><li>Greater visibility of these assets </li></ul><u...
Transport Efficiencies <ul><li>Tracking of vehicles </li></ul><ul><ul><li>Security </li></ul></ul><ul><ul><li>Vehicle rout...
Identifying Future Applications <ul><li>Workers involved </li></ul><ul><ul><li>Ownership </li></ul></ul><ul><ul><li>Excite...
Problem Areas <ul><li>Efficient use of space on dollies/cages? </li></ul><ul><li>Store returns </li></ul><ul><li>‘ Russian...
Financial Analysis <ul><li>Difficult to quantify benefits of RFID </li></ul><ul><li>A very conservative approach used to e...
Woolworths $avings with RFID <ul><li>Reduced Supply Chain Theft/Loss </li></ul><ul><li>Inventory and Availability </li></u...
$avings Amounts <ul><li>Theft/Loss </li></ul><ul><ul><li>(₤ 42M) x (Expected decrease in SC theft/loss) </li></ul></ul><ul...
Summary of Findings <ul><li>New Store  </li></ul><ul><li>ROI = 1.1 </li></ul><ul><li>VS </li></ul><ul><li>ROI = 1.3 to 8.5...
Recommendations <ul><li>RFID – cutting edge </li></ul><ul><li>Benefit Analysis Areas </li></ul><ul><li>$trong Financial $u...
Recommendations <ul><li>Short-Term </li></ul><ul><ul><li>Partial roll-out of RFID </li></ul></ul><ul><ul><ul><li>Implement...
Recommendations <ul><li>Long-Term </li></ul><ul><ul><li>Full roll-out of RFID  </li></ul></ul><ul><ul><ul><li>Use of activ...
<ul><li>MBA Team 2 : </li></ul><ul><li>Marcus Alexander </li></ul><ul><li>Simon Frost </li></ul><ul><li>Neil Hines </li></...
Upcoming SlideShare
Loading in...5
×

Woolworths Case MBA Team 2:

1,526

Published on

Published in: Business, News & Politics
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,526
On Slideshare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
45
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Transcript of "Woolworths Case MBA Team 2:"

  1. 1. SCM 502 / MIS 503 October 21, 2005 Woolworths Case MBA Team 2: Marcus, Simon, Neil, Serhiy Ramona
  2. 2. Woolworths Case <ul><li>Woolworths Group plc and its problems </li></ul><ul><li>RFID: Technological Review </li></ul><ul><li>Pilot Project </li></ul><ul><li>Financial Analysis </li></ul><ul><li>Recommendations </li></ul>
  3. 3. Woolworths Main Focuses <ul><li>Principal UK retailer of products for home </li></ul><ul><li>Entertainment (E.UK, 2 Entertain, and Streets Online) </li></ul><ul><li>Home & Family </li></ul><ul><li>Kids (toys and clothing) </li></ul><ul><li>Confectionary </li></ul><ul><ul><li>Average annual income - £2.7 billion </li></ul></ul>
  4. 4. Woolworths Major Management Strategy <ul><li>Centralize accounting </li></ul><ul><li>Invest in new technology and new information systems </li></ul><ul><li>Rationalize the store base </li></ul><ul><li>Reduce the costs </li></ul><ul><li>Centralize distribution </li></ul>
  5. 5. Woolworths Major Problems <ul><li>Inventory shrinkage (56%): </li></ul><ul><ul><li>Incorrect shipment deliveries </li></ul></ul><ul><ul><li>Stock losses </li></ul></ul><ul><li>Theft (44%): </li></ul><ul><ul><li>Theft in transit </li></ul></ul><ul><ul><li>Shoplifting </li></ul></ul>
  6. 6. RFID: Technological Review <ul><li>RFID – Radio Frequency Identification </li></ul><ul><ul><li>Generic term for technologies that use radio waves to automatically identify people or objects </li></ul></ul>
  7. 7. An RFID Tag CHIP ANTENNA SUBSTRATE
  8. 8. Active RFID Tags <ul><li>Active Tags </li></ul><ul><ul><li>Catch the attention of the RFID reader by sending out a signal </li></ul></ul><ul><ul><li>Function with battery power </li></ul></ul><ul><ul><li>Can be detected over a greater distance </li></ul></ul><ul><ul><li>Are more expensive </li></ul></ul>
  9. 9. Passive RFID Tags <ul><li>Passive Tags </li></ul><ul><ul><li>Alert the tag to communicate through a reader when the reader’s signal is detected by the tag </li></ul></ul><ul><ul><li>Communicates without battery power </li></ul></ul><ul><ul><li>Derives power from the reader’s electromagnetic field </li></ul></ul><ul><ul><li>Smaller range of detection </li></ul></ul><ul><ul><li>Relatively inexpensive </li></ul></ul>
  10. 10. How RFID works? RFID Tag RFID Reader Middleware Enterprise System
  11. 11. Why use RFID? <ul><li>Labor-saving technology </li></ul><ul><li>Monitoring and control </li></ul><ul><li>Security </li></ul><ul><li>Transparency </li></ul><ul><li>Information integration and flow </li></ul><ul><li>Meet customer specifications </li></ul>
  12. 12. Woolworths Pilot Project <ul><li>Serviced its 800+ stores through 4 DC: </li></ul><ul><ul><li>2 primary and 2 seasonal </li></ul></ul><ul><li>100,000 roll cages (large items) </li></ul><ul><li>Totes for smaller items </li></ul><ul><li>Initial challenge: define a manageable scope in terms of the products, vehicles, stores and DC. </li></ul><ul><li>Swindon - “proof of concept” </li></ul><ul><li>System tracks dollies to stores and back again </li></ul>
  13. 13. Woolworths Pilot Project <ul><li>“ Russian Doll” strategy achieves item-level visibility without item-level tags </li></ul><ul><li>Combined technologies to reduce theft and lost items: </li></ul><ul><li>- Bar Codes on individual items and tote boxes </li></ul><ul><li>- Active RFID Tags </li></ul><ul><li>- Short & long range RFID devices within DC </li></ul><ul><li>- RFID Readers to track movements from DC to stores </li></ul><ul><li>- Global Positioning System to track vehicle on route </li></ul><ul><li>- Wireless Wide Area Network to transmit data to control </li></ul><ul><li>system </li></ul>
  14. 14. Woolworths Pilot Project <ul><li>Outbound distribution technologies: </li></ul><ul><ul><li>Automated Storage and Retrieval System: uses robots to stock merchandise in totes on the shelves and to extract merchandise bound for stores </li></ul></ul><ul><ul><li>Pick-to-light System: employees are guided visually by lights to exact bin locations to pick small items and place it into totes destined for each stores </li></ul></ul>
  15. 15. Woolworths Pilot Project
  16. 16. Woolworths Pilot Project <ul><li>SmartChain tracking platform -> focal point of the tracking process </li></ul><ul><ul><li>tote-pick control system tells SmartChain which picks and totes are going to each store </li></ul></ul><ul><ul><li>TMS provides SmartChain with data about which order goes to which vehicle </li></ul></ul><ul><li>SmartChain integrates all data </li></ul>
  17. 17. Benefits <ul><li>Ability to integrate combination of technologies </li></ul><ul><li>Information and visibility in supply chain </li></ul><ul><li>Invisible to user </li></ul><ul><li>Error notification </li></ul>
  18. 18. Six Categories of Benefits <ul><li>Shrinkage </li></ul><ul><li>Bookstock Accuracy </li></ul><ul><li>Reduced Labor Costs </li></ul><ul><li>Asset Management </li></ul><ul><li>Transport Efficiencies </li></ul><ul><li>Identification of Future RFID applications </li></ul>
  19. 19. Shrinkage <ul><li>Better inventory visibility </li></ul><ul><li>Errors corrected in real time </li></ul><ul><li>Automated audit trail </li></ul>
  20. 20. Bookstock Accuracy <ul><li>Automated update of bookstock </li></ul><ul><li>Higher visibility </li></ul><ul><li>Lower inventory levels </li></ul><ul><li>Improved customer service </li></ul>
  21. 21. Reduced Labor Costs <ul><li>Reduced manual check-in </li></ul><ul><li>Reduced updating of stock records </li></ul><ul><li>Reduced effort to investigate stock losses </li></ul>
  22. 22. Asset Management <ul><li>Dollies, tote boxes, roll cages </li></ul><ul><li>Greater visibility of these assets </li></ul><ul><li>Improved utilization </li></ul><ul><li>Reduced capital expenditure </li></ul>
  23. 23. Transport Efficiencies <ul><li>Tracking of vehicles </li></ul><ul><ul><li>Security </li></ul></ul><ul><ul><li>Vehicle routing </li></ul></ul><ul><ul><li>Driver performance </li></ul></ul><ul><ul><li>Vehicle availability </li></ul></ul>
  24. 24. Identifying Future Applications <ul><li>Workers involved </li></ul><ul><ul><li>Ownership </li></ul></ul><ul><ul><li>Excitement </li></ul></ul><ul><ul><li>Suggestions </li></ul></ul>
  25. 25. Problem Areas <ul><li>Efficient use of space on dollies/cages? </li></ul><ul><li>Store returns </li></ul><ul><li>‘ Russian doll’ system security? </li></ul>
  26. 26. Financial Analysis <ul><li>Difficult to quantify benefits of RFID </li></ul><ul><li>A very conservative approach used to estimate financial benefits of RFID </li></ul><ul><li>How does the ROI of new store addition compare to that of RFID implementation? </li></ul>
  27. 27. Woolworths $avings with RFID <ul><li>Reduced Supply Chain Theft/Loss </li></ul><ul><li>Inventory and Availability </li></ul><ul><li>Asset Utilization (Roll Cages) </li></ul><ul><li>Reduced Paperwork </li></ul><ul><li>Improved Vehicle Utilization </li></ul>
  28. 28. $avings Amounts <ul><li>Theft/Loss </li></ul><ul><ul><li>(₤ 42M) x (Expected decrease in SC theft/loss) </li></ul></ul><ul><li>Inventory and Availability </li></ul><ul><ul><li>(Total Sales ‘03) x (Expected increase between 0.25% and 0.50%) </li></ul></ul><ul><li>Roll Cages </li></ul><ul><ul><li>(2,500 cages/year) x (₤100/cage) = ₤250,000 </li></ul></ul><ul><li>Paperwork </li></ul><ul><ul><li>Savings of ₤350,000 on reduced paperwork </li></ul></ul><ul><li>Vehicle Utilization </li></ul><ul><ul><li>Estimated £8M to £10M savings with telemetrics </li></ul></ul><ul><ul><li>Woolworths Savings.xls </li></ul></ul>
  29. 29. Summary of Findings <ul><li>New Store </li></ul><ul><li>ROI = 1.1 </li></ul><ul><li>VS </li></ul><ul><li>ROI = 1.3 to 8.5 </li></ul><ul><li>RFID Rollout </li></ul><ul><li>(Or 2.5 to 12.1 with Telemetrics Savings) </li></ul>
  30. 30. Recommendations <ul><li>RFID – cutting edge </li></ul><ul><li>Benefit Analysis Areas </li></ul><ul><li>$trong Financial $upport </li></ul>
  31. 31. Recommendations <ul><li>Short-Term </li></ul><ul><ul><li>Partial roll-out of RFID </li></ul></ul><ul><ul><ul><li>Implement through fraction of company </li></ul></ul></ul><ul><ul><ul><li>Starting with passive tags </li></ul></ul></ul><ul><ul><ul><ul><li>Not on individual items (yet) </li></ul></ul></ul></ul><ul><ul><ul><li>Continual Analysis </li></ul></ul></ul><ul><ul><ul><ul><li>Evaluate </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Locate and eliminate problems </li></ul></ul></ul></ul>
  32. 32. Recommendations <ul><li>Long-Term </li></ul><ul><ul><li>Full roll-out of RFID </li></ul></ul><ul><ul><ul><li>Use of active and passive tags </li></ul></ul></ul><ul><ul><ul><ul><li>Passive tags on every individual item </li></ul></ul></ul></ul><ul><li>RFID is the way to go! </li></ul>
  33. 33. <ul><li>MBA Team 2 : </li></ul><ul><li>Marcus Alexander </li></ul><ul><li>Simon Frost </li></ul><ul><li>Neil Hines </li></ul><ul><li>Serhiy Ponomaryov </li></ul><ul><li>Ramona Sidharta </li></ul>Questions? Comments?
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×