Cost Containment At The Container Store - A Lesson in Smarter Spending

2,422 views

Published on

Published in: Business, Technology
0 Comments
4 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
2,422
On SlideShare
0
From Embeds
0
Number of Embeds
94
Actions
Shares
0
Downloads
0
Comments
0
Likes
4
Embeds 0
No embeds

No notes for slide
  • Scott / Mike: We manage non-merchandise supplies for The Container Store’s 47 retail locations. Non-merchandise supplies are all those necessary things that are needed to run the business, such as shopping bags, employee aprons, office supplies, cleaning supplies. All of these supplies are centrally managed in our distribution center. So anytime a retail location needs something for their store they put the order through us and we manage fulfillment for them.
  • Cost Containment At The Container Store - A Lesson in Smarter Spending

    1. 1. Containing Costs at The Container Store A Lesson in Smarter Spending Welcome to Today’s Web Seminar! Presented by: The Institute for Supply Management TM and Coupa We’ll be starting momentarily. © Copyright 2009. Institute for Supply ManagementTM; All Rights Reserved.
    2. 2. Terri Tracey, CAE Vice President, Technology and Publications Institute for Supply Management® Terri is ISM’s Vice President of Technology and Publications. She is responsible for all ISM’s technology applications, including integration of all internal and external association management, web and ecommerce systems. Terri also serves as the editor of ISM’s monthly magazine, Inside Supply Management ®, of Supply Chain Management. Additionally, she is responsible for the montand oversees all print and online publications, including editorial, design and outsourced relationships for the magazine, supplements, e- newsletters, and the Journal hly Manufacturing and Non-Manufacturing ISM Report on Business® areas as well as the R. Gene Richter Awards program for Leadership and Innovation in Supply Management.
    3. 3.   Saving 36 hours a week that was previously wasted maintaining in- house inventory and manually shipping supply orders by integrating their supply management process with warehouse management and supplier systems.   Giving managers a reality check of just how much they are spending by stockpiling and over-ordering supplies by exposing end costs to inventory managers.   Accurately charging supply costs to individual stores based on supply usage and not just by arbitrary measures like percent of sales volume.   Delivering greater price discounts by creating a supply management machine that automates the req-to-pay process and allows purchasing to focus more on negotiating strategic contracts instead of pushing paper.
    4. 4. Scott Jones Purchasing Manager The Container Store With more than decade worth of experience, Scott Jones is responsible for the day-to-day management and direction of purchasing, as well as expense planning and analysis, at The Container Store. Since joining in 1989, Scott has helped The Container Store grow from 7 stores to 47 stores across the country. Scott holds a Bachelor of Science in Business & Marketing from Stephen F. Austin University.
    5. 5. Mike Morrow Purchasing Agent The Container Store An expert in The Container Store’s use of non-merchandise goods, Mike Morrow has spend the last 5 years managing competitive price negotiation and purchase of non-merchandise goods and services consumed at The Container Store’s corporate office, distribution center, and store locations across the country. In addition, Mike is responsible for The Container Store’s e- procurement planning and implementation. Mike holds a Bachelor of Science from Texas A&M University and a Master of Arts from Southwestern Theological Seminary.
    6. 6.   If you could achieve just one of the following, what would have the biggest impact on your organization?  Get employees to actually use the proper purchasing system and follow procedures  Eliminate purchasing “paper pushing” (i.e. rekeying data)  More efficiently manage supplier relationships and streamline the purchase fulfillment process  Real-time visibility into spend as it happens in order to take immediate action to eliminate wasteful spend  Automate manual tasks so purchasing can spend more time on strategic activities (i.e. contract negotiations)  Other
    7. 7. Welcome to The Container Store •  The Container Store offers more than 10,000 time and space-saving storage and organization solutions divided into 14 different lifestyle departments such as closet, kitchen, home office and travel. –  Located in 19 states, in 23 markets and has 47 store locations across the country. –  Projecting an excess of half a billion in sales for fiscal 2009. –  Has about 4000 GREAT employees across the country. –  Has been named to the top of FORTUNE magazine’s annual list of “100 Best Companies to Work For” the past ten years. Cost
Containment
at
The
Container
Store
 7

    8. 8. Non-Merchandise Supply Management •  Everything a store needs to conduct business –  Bags –  Aprons –  Office and Cleaning Supplies •  Non-merchandise supply inventory centrally managed at Distribution Center Cost
Containment
at
The
Container
Store
 8

    9. 9. End-to-End Process Challenges •  Receiving Supply Orders –  Costly, manual process –  Stores fill out an excel spreadsheet –  Email to centralized procurement –  All items pulled from inventory and shipped to each store along with merchandise •  Fulfilling Supply Orders –  1 truck every 7 to 10 days –  Limited amount of truck space for supplies –  Limited amount of warehouse space to devote to supplies Cost
Containment
at
The
Container
Store
 9

    10. 10. Needs Checklist Cost
Containment
at
The
Container
Store
 10

    11. 11. The Options Doing nothing, Full service stay with the inventory e-Procurement status quo companies Cost
Containment
at
The
Container
Store
 11

    12. 12. An End-to-End Solution ✔  Maintain control & visibility + Dashboards & benchmarks ✔  Intuitive, easy-to-use ✔  Does not require a lot of + Support & service training ✔  Scalable, adaptable ✔  Direct shipments from key vendors ✔  Integrate with warehouse management Cost
Containment
at
The
Container
Store
 12

    13. 13. What We Achieved Company Wide Success Accounting Distribution Center Purchasing •  Eliminating 100% of •  Automatically pulling •  Writing over 50% fewer department keying orders into WMS Purchase Orders per errors •  Saving 36 hours a week week •  Regaining wasted time by eliminating manual •  Managing inventory by working with only rekeying levels for 62% fewer on approved invoices •  Freeing up over 150 supply skus picking locations •  Significantly reducing invoice processing Store Location time - 5 minutes for limitless number of invoices vs. 1 to 2 •  Visibility to supply cost minutes per invoice •  Ease of use – less time spent ordering supplies •  More time spent with customer Cost
Containment
at
The
Container
Store
 13

    14. 14. What We Learned 5 Lessons to Promote Smarter Spending 1.  Employee Empowerment. 2.  Stop being the middle man. 3.  Time really is money! 4.  Close, isn’t close enough. 5.  Create a supply management machine. Cost
Containment
at
The
Container
Store
 14

    15. 15. Employee Empowerment Expose employees to how much things cost… THEN THEN No price lists, employees Employees not aware of ordered supplies with no financial impact from stock visibility to ordering history piling supplies Cost
Containment
at
The
Container
Store
 15

    16. 16. Employee Empowerment Expose employees to how much things cost… THEN THEN No price lists, employees just Employees would stock pile ordered whatever they felt supplies – even if there they needed wasn’t an immediate need …and they’ll critically evaluate need. NOW NOW Employees see how much Employees are more cost each item costs and the total conscious, buying only the for their entire order necessities Cost Containment at The Container 16 Store
    17. 17. How did we do it? 1.  Products listed in the catalog show actual prices 2.  When creating a requisition, employees can easily see the total amount they are spending 3.  They can also see the approval process their order will go through – if it goes to the CEO, would you think twice about submitting? Cost
Containment
at
The
Container
Store
 17

    18. 18. Stop being the middle man. Still maintain purchasing visibility and control… THEN THEN Purchasing maintained Every order had to be inventory and managed handled by purchasing fulfillment Cost
Containment
at
The
Container
Store
 18

    19. 19. Stop being the middle man. Still maintain purchasing visibility and control… THEN THEN Purchasing maintained Every order had to be inventory and was handled by purchasing responsible for packing and shipping supplies …without wasting time packing and shipping every supply needed. NOW NOW Automatically enforce approval processes and Suppliers ship directly to workflows – no need to touch retail locations every order! Cost
Containment
at
The
Container
Store
 19

    20. 20. How did we do it? 1.  Orders are automatically sent to the appropriate approvers 2.  Once approved, they are sent electronically to suppliers 3.  Suppliers fulfill orders and ship directly to retail locations 4.  Retail locations confirm receipt 5.  Vendors are paid Cost
Containment
at
The
Container
Store
 20

    21. 21. Time really is money! Provide store Inventory Coordinator with an easy-to- use tool… THEN THEN Products were hard to find It took a few hours to place an and spreadsheets difficult to order use Cost
Containment
at
The
Container
Store
 21

    22. 22. Time really is money! Provide store inventory managers with an easy-to-use tool… THEN THEN Products were hard to find It took a few hours to place an and spreadsheets difficult to order use …and they’ll have more time to spend with customers. NOW NOW Online catalogs with search and pictures makes it easy to It takes a few minutes! find what is needed Cost
Containment
at
The
Container
Store
 22

    23. 23. How did we do it? 1.  Intuitive, user friendly UI with item pictures easily identify needed supplies 2.  System defaults, no need to worry about which supplier, which cost center, etc. 3.  A few clicks to submit 2 1 3 Cost
Containment
at
The
Container
Store
 23

    24. 24. Close, isn’t close enough. Get an accurate view into usage and costs… THEN THEN Supply costs were Two systems not able to determined based on % of communicate sales volume Cost
Containment
at
The
Container
Store
 24

    25. 25. Close, isn’t close enough. Get an accurate view into usage and costs… THEN THEN Supply costs were Two systems not able to determined based on % of communicate sales volume …and ensure that the right budgets are charged. NOW NOW Bridge of communication Costs are based on actual built between two systems usage Cost
Containment
at
The
Container
Store
 25

    26. 26. How did we do it? 1.  Store supply needs are managed through a single platform 2.  Each purchase is assigned to the appropriate cost center 3.  Spend reports accurately reflect how much each store has used Cost
Containment
at
The
Container
Store
 26

    27. 27. Create a supply management machine. Use technology to streamline and automate… THEN THEN Costly, time consuming Excel Majority of time spent based process pushing paper Cost
Containment
at
The
Container
Store
 27

    28. 28. Create a supply management machine. Use technology to streamline and automate… THEN THEN Costly, time consuming Excel Majority of time spent based process pushing paper …and have more time to spend on strategic activities. NOW NOW Automated, online solution Analyzing spend data, that alerts when action is negotiating better prices, needed building supplier relationships Cost
Containment
at
The
Container
Store
 28

    29. 29. How did we do it? 1.  Deployed a SaaS solution that is easy to customize and integrate 2.  Standardized and automated workflows Store Inventory Manager •  Weekly supply orders •  Supply receipt confirmation 3.  Clearly defined roles, responsibilities and accountability Suppliers •  Timely fulfillment •  Direct shipment Purchasing •  Handle exceptions •  Negotiate savings Cost
Containment
at
The
Container
Store
 29

    30. 30. Summary You can achieve these kind of results! •  Significantly reducing invoice processing time - 5 minutes for limitless number of invoices vs. 1 to 2 minutes per invoice •  Saving 36 hours a week by eliminating manual rekeying •  Writing over 50% fewer Purchase Orders per week •  Managing inventory levels for 62% fewer supply skus Just remember the lessons. 1. Employee empowerment. 2. Stop being the middle man. 3. Time really is money! 4. Close, isn’t close enough. 5. Create a supply management machine. Cost
Containment
at
The
Container
Store
 30

    31. 31.   Looking ahead to 2010, what is the biggest challenge you will need to overcome?  Having to do more with less resources  Achieving aggressive cost cutting goals  Enforcing purchasing policies and processes  Streamlining the procurement process for greater efficiency  Implementing / upgrading the procurement system  Negotiating better supplier prices / contracts
    32. 32. Jason Hekl Vice President of Marketing Coupa Software Jason Hekl is responsible for all of Coupa’s marketing initiatives, including demand generation, messaging, and marketing communications. Prior to joining Coupa, Jason was with InQuira, where helped grow revenues nearly ten-fold over a four year period. Jason earned a Master of Business Administration degree from the Ross School of Business at the University of Michigan, and a Bachelor of Arts degree in International Relations and Economics from the University of Delaware.
    33. 33. The Question for 2010 How do you save 10% more with FEWER resources in ½ as much time?
    34. 34. The Question for 2010 How do you save 10% more with FEWER resources in ½ as much time? Assess your suppliers Analyze your spend
    35. 35. The Question for 2010 How do you save 10% more with FEWER resources in ½ as much time? Practice smarter spending
    36. 36. It’s hard to run with a pebble in your shoe… Photo by Prabhu
    37. 37. It’s hard to run with a pebble in your shoe… 1.  Ease of Use 2.  Effort to Implement and Maintain 3.  Cost Photo by Prabhu
    38. 38. SaaS and the Power of One Platform One
Infrastructure
 Deploy once. We update. We support. We maintain One Off
 - Risky, resource-intensive implementations Enterprise - Complex, long upgrades Software - Slow pace of innovation - Difficult to support - Costly and painful to maintain (higher TCO)
    39. 39. 5 Ways to Achieve Your Goals with e-Procurement in 2010 1.  Spend Under Management Attract more spend at the top of the funnel 1 2.  Compliance With purchasing guidelines and 2 negotiated contracts 3.  Better Deals 3 Crowd source savings on one-off purchases 4.  Control 4 Prevent wasteful spending before it happens 5 5.  Efficiency Increase velocity through the funnel, and save as a result
    40. 40. If only it were this easy…
    41. 41. It is. Provide a requestor experience that is faster and easier, than every alternative, and you will be amazed by what happens.
    42. 42. Addressing the adoption problem with a compelling requestor experience SUM 1. Know what’s allowed, and what’s not.
    43. 43. Addressing the adoption problem with a compelling requestor experience SUM 1. Know what’s allowed, and what’s not. Compliance 2. Guide requestors to preferred suppliers and contract pricing, greatly reducing “maverick” spend
    44. 44. Addressing the adoption problem with a compelling requestor experience SUM 1. Know what’s allowed, and what’s not. Compliance 2. Guide requestors to preferred suppliers and contract pricing, greatly reducing “maverick” spend Best Pricing 3. And for those ad-hoc items not covered by existing contracts, find deals online
    45. 45. A flexible approval workflow engine that you can change without help Control
    46. 46. A flexible approval workflow process that works for busy managers Control
    47. 47. Proactive alerts and spend dashboards to prevent mistakes before they occur Control
    48. 48. Achieve greater efficiencies in the req to PO process Avoidance 5% Self Approval 29% Efficiency
    49. 49. Achieve greater efficiencies in the req to PO process Cycle Time 23 Hours Savings 9.5% of Spend Avoidance 5% Self Approval 29% Efficiency
    50. 50. 5 Ways to Achieve Your Goals with e-Procurement in 2010 1.  Spend Under Management 1 Attract more spend at the top of the funnel 2 2.  Compliance With purchasing guidelines and negotiated contracts 3 3.  Better Deals Crowd source savings on one-off purchases 4 4.  Control Prevent wasteful spending before it happens 5 5.  Efficiency Increase velocity through the funnel, and save as a result
    51. 51. They’re not making hay of pennies. Spend Under Mgmt + 20% Savings 9.5% of Spend
    52. 52. Learn More 1 2 3 +1 650.931.3200
    53. 53. Contact Information Scott Jones Purchasing Manager The Container Store scott@containerstore.com Mike Morrow Purchasing Agent The Container Store mjmorrow@containerstore.com Jason Hekl Vice President, Marketing Coupa Software jason.hekl@coupa.com Thank You for attending this Web Seminar!
    54. 54. Attendees of today’s event will receive an email from ISM within ten working days with secured links to: •  Your Continuing Education Hour certificate. CEHs are awarded to attendees who participated for at least 50 minutes of the seminar. •  Questions posed to the presenters by today’s attendees. Please note that the answers to today’s Q & A will not be immediately available. You will want to save this link check back for the results. They should be available within 14 business days. •  The entire presentation in a PDF format Note: The archived interactive recording of today’s event will be available within 14 business days on ISM’s Web site at http://www.ism.ws/Seminars/WebSeminars.cfm.
    55. 55. You must be logged-into ISM’s Web site for these secured links to work.
    56. 56. After your initial log-in, you can personalize your login information by selecting the “edit your login information” link.
    57. 57. Please take a moment to give us your thoughts on today’s Web Seminar. Select the link and you will be taken to a short survey. Thank You.

    ×