As pressures grow for leaner retail organizations, improved margins and focus on core product mix -- Scan based trading (SBT) is growing fast in popularity as a means to reducing costs and increasing working capital + margins.
Is This Familiar? “We are operating with restricted cash flow “We are often out of stock and losing and low inventory turns is not helping the sales on high turn SKUs” challenge” “Our Return to Vendor activity“Shrink remains a challenge for us and continues to trend high, wastingis costing us margin” valuable store labour” “Our current direct-store-delivery processes are delaying goods to the floor and creating “ Our invoice match process is often a competitive disadvantage” flawed with costly discrepancies” SIMPLIFY - INTEGRATE - ELIMINATE 2
What is Scan Based TradingScan based trading (SBT) is a commercemodel where the supplier owns theinventory until it scans at the point of sale. Fastest growing trend within retail supply chain. Significant financial and operational benefits to retailers. Within Canada, over 7 major retailers have moved ahead aggressively with SBT in categories that include music, games, DVD, newspaper, magazines, confectionary and seasonal. Over 10 retailers on SBT by 2012 and growing. 3 SIMPLIFY - INTEGRATE - ELIMINATE
Traditional Retail vs. SBT POS Data Scan Based Trading Store/SKU POS Data Supplier Direct-Store-DeliverySupplier’s Replenishment Plan 5 SIMPLIFY - INTEGRATE - ELIMINATE
Benefits from SBT • Shorter Cash-conversion cycle (increase working capital) • Inventory “off the books” (reduce carrying costs) To Finance • Eliminate invoice processing 50%-70% reduction in Invoice adjustments • Improved in-store merchandising/plan-o-gram compliance • Reduced labour cost for receiving/returningTo Operations • Shrink reduction 20%-40% labour reduction • In-stock improvement • Sales lift (reduced lost sales) 5%-20% lift in sales • Margin gain 40%-60% reduction in Shrink To Product • Reduced Safety Stock needs • Reduced returnsTo Supplier • Faster payment SIMPLIFY - INTEGRATE - ELIMINATE 6
What do you need for SBT? MAJOR CONSIDERATIONS Technology & Data Management– EDI & Reporting Willingness of vendor (engagement) Modified head-office & store processes 7 SIMPLIFY - INTEGRATE - ELIMINATE
How can SPICE helpTurnkeyinitiation andexecution of SBT-IN-A-BOXSBT program 8 SIMPLIFY - INTEGRATE - ELIMINATE
SPICE SPICE RETAILER1. SBT Program 1. Change Management Development (SBT (Operations, Finance, LP) Playbook) 2. Project Management Runs2. EDI Technology & Supplier Integration 3. “Value Engineering” – SBT Program ensuring delivery of SBT3. Supplier Negotiations business caseInitiate Rollout Operate Your footer Your logo
Call Us Next Steps 1. One and half hour meetingTo find out more ….. to learn more. 2. Follow up 1 day free assessment and proposal Agenda Learn in more detail what SBT can do for you Place your We are interested ... logo 1) Can SBT work for me? 2) How do I get suppliers www.spiceTG.com engaged? 2425 Matheon Blvd. E 3) What are my expected 8th Floor costs, risks and Mississauga, ON L4W 5K4 benefits? 4) How can I get started? 5) How can SPICE help?