Tim edwards new ways to deliver availability to add value for consumers


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Tim edwards new ways to deliver availability to add value for consumers

  1. 1. 12th ECR Asia Pacific Conference New Ways to Deliver Availability to Add Value For Consumers Tim Edwards – Tesco Stores Malaysia Tesco in Malaysia Background • Joint venture set up in 2001 between (30%) and Tesco PLC (70%) Investment • Over RM3.0 billion in Malaysia since 2002 • 36 hypermarkets across Peninsular Malaysia. 6 stores will open in 2010/11 Employment • Local talent for key Management positions • Over 13,000 Malaysians serve 3 million customers every month Tesco – bringing low prices, quality & choice to consumers in Malaysia 2 1
  2. 2. Tesco Malaysia Milestones 2001 Tesco UK PLC signs JV with Sime Darby Berhad to form Tesco Malaysia Stores Sdn Bhd 2002 Tesco Malaysia’s first hypermarket opens in Puchong, Selangor Darul Ehsan 2007 Acquired Makro Malaysia Cash & Carry & converted 8 Makro Cash & Carry stores to Tesco Extra, a pioneer in Tesco Group, catering to needs of small businesses, families & individuals First to build & operate a state-of-the-art Fresh Food Distribution Centre in Simpang Pulai, Perak 2008 Launched an innovative in-house ‘Clubcard’ loyalty program as a way to thank customers 2009 29 branches throughout Malaysia with over RM3.0 billion investment and created 10,000 new jobs Tesco to open Asia’s largest Ambient Distribution Centre, valued at RM 210 million A world class retailer for Malaysians, by Malaysians 3 On Shelf Availability is an issue that affects all of us and can only be resolved by working together • Consumers are increasingly short of time and in many cases money • They want to get what they want when they shop • They are more loyal to the store that has what they want 2
  3. 3. There are many root causes for out of stocks Root Cause Description Shelf Replenishment Positive SOH. Can’t locate stock in back room. Discipline Stocks is available again 1 or 2 days later and the shelf is filled again. Master Data (SPI, pricing) Discrepancy or dispute in pricing causing no shipment Book Stock Accuracy Shelf normally empty for a prolonged period before inventory is zerorised and replenishment order placed Supplier OOS Supplier OOS because of manufacturing capability or demand error. Shelf space/Replenishment Constantly OOS as not sufficient shelf space to cater frequency for product off take. Shelf filled in the morning but empty in the evening Stock in transit Shelf is empty before replenishment could arrive How can we work together to consistently deliver on-shelf availability? on- The Basics Collaborative Managing Strategic Activities Performance Develop Working Promotion Order Fulfilment Implant Role Relationships Management Failed To Arrive Vendor / Co- Key Performance Merchandise Managed Inventory Indicators Change Plan Supplier Conformance Supply Projects Base Forecasting Event Management Management TWIST Collaborative Managing The Basics Strategic Activities Performance 3
  4. 4. The basics that need to be in place before collaboration can start Develop Working Base Forecasting Relationships Agreeing growth forecasts Initial engagement Openness on New Stores Trust Key Performance Indicators Agree the measures Agree what good looks like Sharing of information Collaborative Managing The Basics Strategic Activities Performance Collaboration makes demand more predictable and is an enabler for on time supply and in full Promotion Management Event Management Agreeing of lines and offers and Agreeing forecasts of key timing products Agreeing expected volumes Agreeing buying period and Buying in before promotion start approach Reviewing sales after promotion Joint monitoring during the event has started Exit Management Exit management Merchandise Change Plan Agree changes to range Agree changes to display layouts New line launch management Collaborative Managing The Basics Strategic Activities Performance 4
  5. 5. Managing performance collaboratively creates understanding and action that improves availability Order Fulfilment Supplier Conformance Measures and targets agreed for Management order fulfilment Regular review and agreed next Delivery to agreed pallet steps configuration Open approach to problems Product descriptions and barcodes Failed To Arrive Delivery notes and invoices Measure and targets for on time delivery Early communication of problems and collaborative approach to resolving Collaborative Managing The Basics Strategic Activities Performance When everything is in place a true supply partnership can start to deliver strategic advantage Implant Role Supply Projects Agreement on role Joint projects to improve Recruitment/ Logistics performance of the supply chain Access to people/ data Empowerment TWIST Experience in a Tesco Store Vendor / Co- Managed Debrief and Review Inventory Agreed next steps Agreement on benefits Resource and Roles Targets and Review Collaborative Managing The Basics Strategic Activities Performance 5
  6. 6. It works! Some results of working together with Colgate-Palmolive Colgate- KPI's Pre-OSA KPI's Post-OSA Case Fill % Case Fill % OSA % 100 OSA % 100 96 94 90 90 86 90 80 80 70 70 A big improvement in availability and a stock reduced from 21 days to 14 days. In Summary… Summary… • Availability is an issue for us all, that affects consumer loyalty and sales • Availability is the result of many actions throughout the supply chain rather than a Retail problem • We can improve availability by working together in partnership to create visibility of supply and a shared view of demand • It’s not ‘Rocket-Science’ and it is not dependent on systems, only on our ability to work openly together to deliver availability to consumers better, faster and for less cost 6
  7. 7. THANK YOU 7