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Enabling a Demand Driven Supply Chain with Teradata at ECR Moscow Feb 2014
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Enabling a Demand Driven Supply Chain with Teradata at ECR Moscow Feb 2014

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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 …

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 cases

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