Tom Rose, Senior Supply Chain Manager at Asda - Designing collaborative Solutions to benefit the customer


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Tom Rose, Senior Supply Chain Manager at Asda spoke at the SCL Event UK 2013

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  • Shape today- remarkable change – years & 2011Talk slide2011 – 17m – Netto 1.1m2012 – 620k – 25 stores – 15 supermarketsBalanced portfilio
  • Tom Rose, Senior Supply Chain Manager at Asda - Designing collaborative Solutions to benefit the customer

    1. 1. Tom RoseSenior Supply Chain Manager –Supply Chain Development
    2. 2. Designing CollaborativeSolution to Benefitthe Customer
    3. 3. Changing customer demand
    4. 4. What has this meant for the Supply Chain? •More volatility resulting from unforecasted price moves •More highly used distribution assets •Significant growth in item-store combinations •True 7 day operations
    5. 5. Evolution of the Supply Chain Today Tomorrow •Day 1 for 2 •Day 1 for 3/4/5 •Demand based •Full trucks •Responsive to •Low frequency customer demand •Constrained Demand •High frequency •Fixed Orders •Lowest cost
    6. 6. The Asda journey...Transformation into 314 Superstores a Multi Format / 32 Supercentres Multi Channel Retailer 186 Supermarkets 32 Living *99% Home Shopping *100% Direct *UK coverage
    7. 7. Asda has been going through majorchange... 135 stores in 26 weeks! 7 7
    8. 8. The Supply Chain mission... Element... Measured By... Competitive Availability • To be top quartile on availability Lowest Possible • Right level of service to our customer in store Operating Costs at the lowest possible end to end cost The Least Amount of • Grow inventory, at a lower rate than sales Capital • Leverage of capital investment Serving All Formats and • Recognising our changing business Channels
    9. 9. What does collaboration mean for Asda? Not adding costs to Asda or to Vendors Improving Customer Availability Not moving inventory around the value chain
    10. 10. What makes collaboration withAsda successful? •Open, honest and transparent •A mutual understanding of each other’s business •Shared and agreed KPIs/objectives •Top level commitment from Asda and Vendor •We are Better Together
    11. 11. Asda collaboration journey so far... •One to One Relationships with vendors •30/60/90 •Agreement of shared KPIs •Created Win:Wins through agility on both sides •Reduced leadtimes •Speed of action drives incremental sales ! •Structured for success •Communication, communication, communication.
    12. 12. Experience of working together Sharing “intent” changes the landscape Sharing the best of both businesses opens opportunities
    13. 13. Agility pays….. A supply chain more responsive to consumer demand, as a result of shorter lead times, the consolidation of loads and increased order opportunities enabling more frequent deliveries FRI SAT SUN MON TUE WED THUR FRI SAT After Before KEY Asda Price Changes Order Day 3 extra days sales / more Day 1 for 3 opportunities for consumers to buy! Non-Order Day Lead TimeSource: Kraft Foods UK, IGD
    14. 14. What are the benefits for suppliers? • Lean & Agile = Availability & Sales • Increased engagement opportunities • Opportunity to leverage the power of the Asda network • Inventory reduction • Improved collaboration & improved flow = Better forecasting
    15. 15. But what next …..• Collaboration between two parties only takes us so far• Collaboration across multiple parties unlocks the next level• Think outside of the box• It is challenging, but the rewards are huge• It is no longer one size fit’s all
    16. 16. Asda inbound logistics options 3 PCC Asda DC 1 DYNAMIC Supplier 2 Cross Dock 1 Full Truck Load/Direct Delivery - ready assembled PO’s delivered directly to the Asda DCs. Cross Dock - collect ready assembled POs from the supplier, cross dock and deliver to the 2 Asda DCs consolidated with other suppliers POs PCC - collect full loads from the factory, receive, store, order assemble, and deliver to the 3 Asda DCs in full truck loads consolidated with other supplier POs
    17. 17. Objective: 7 day Supply ChainSummer Winter
    18. 18. Collaboration is delivering... Inbound Inventory Availability
    19. 19. Multi-supplier collaboration• Three suppliers, all based within nine miles of each other• Ordering 2/3 times a week in full trucks• Day 1 for 3 lead time• Concept – Coordinate together – Seven day ordering – Customer demand based – Day 1 for 2
    20. 20. Lead time to shelfS1S2S3
    21. 21. Time line Vendor Confirm order and ASDA any allocation to 3PLASDA 3PL ASDA PO’s send to Provide extra slot Confirm PO’s toPO’s Produced supplier and 3PL fixed and extra times bookings 06:00 07:00 08:00 09:00 10:00 12:00 13:00 14:00 15:00 16:00 17:00 11:00 3PL ASDA ASDA Confirm extra loads Inbound references PO’s Review required by depot provided to 3PL ASDA Completed Capacity alert
    22. 22. Collaboration is delivering... Inbound Inventory Costs Availability Forecast Accuracy
    23. 23. Top 60 SuppliersProgramme • Cross category • Structured approachapproach • • Agreed developments Collaborative working Non-Primary DC Inbound Consolidators Master Smoothing• Co-ordinate inbound Supplier • Pallets per Day• Reduce lead time • Better resource allocation• Increase frequency Plan • Improved planning Minimum Standards • Day 1 for 3 • Any of seven days • Right Economic Order Quantity (EOQ)
    24. 24. Engagement• Bring all suppliers up to a minimum standard • Day 1 for 3 • Any of 7 days • Within ASDA EOQ• Coordinate deliveries by despatch point, not supplier• Smooth inbound flow to maximise cost effective end to end throughput• Structured cross category engagement with the top suppliers • Structured approach • Integrated with Top to Top meetings
    25. 25. Maturity matrix Fresh Ambient/GM/Frozen • Service Reliability • Lead TimeAgile • Supply Constraints • Delivery /Order Days • Collaborative Planning • Fill Rate • Promotion Support • Collaborative Planning • Waste • Relationship Management • Order Cut Off • Order Restrictions AllLean • Buying Terms • Transport Integration • Freight Conversion • Consolidation Cube • Utilisation Lean Receiving
    26. 26. Programme framework “As Is” Maturity Matrix “As Is” Opportunities “To Be” Joint Supply Chain and Supply Chain Action Plan Mapping Pain Points Mapping “To Be” Maturity Matrix
    27. 27. Maximising the opportunity • There are no black and white’s.. • It is about end to end cost, not just any one area • It is about how we use our combined resources • We cannot look at any cost in isolation What is the best result end to end
    28. 28. Maximising the opportunity If you see an opportunity, challenge us!
    29. 29. Commitment From us: From you: • to work with you • to work with us • to listen to you • to actively listen • to engage with you • to engage in opportunities • to challenge you • to challenge us
    30. 30. Keys to successful collaborationwith Asda• Take risks - don’t be afraid to be innovative and adapt• Work together to see the opportunities• Be open and don’t give up• There isn’t one collaboration model! It’s not one size fits all
    31. 31. Be brave, take risksBe open and Think outsidetransparent the box