More Related Content Similar to 130219 CPC Introduction AE Similar to 130219 CPC Introduction AE (20) 2. ©InterIKEASystemsB.V.2010
Why Common Planning
Concept?
• Enable IKEA growth
• Secure our Customer Promise
• Strengthen the IKEA brand
The IKEA Concept shall be fully implemented by all IKEA
Retailers and supported by best practice working methods
enabled by modern, up to date and efficient IT systems. All
IKEA Retailers shall use the same systems & methods and the
same way of ‘meeting the customer’.
The vision for the Gordian Knot Program started in
2010. The Common Planning Concept was part
of the Gordian Knot Program until incorporated
into Business Processes and IT Tools 2012.
4. ©InterIKEASystemsB.V.2010
The Common Planning
Concept Project
Project Steering Group
- Fredrik Lönell, Chairman, Manager Business Processes
and IT Tools,, Inter IKEA Systems Distribution
- Björn Westerberg, Process Owner, IKEA Supply Chain
- Maria Johansson, Manager Supply Chain, Inter IKEA
Systems Distribution
- Anna Nittve, Retail IT platform responsible, Inter IKEA
Systems Distribution
5. ©InterIKEASystemsB.V.2010
Project Time plan
– Plan and prepare for pilot roll-out
– Define future ways of working (task and responsibilities)
– Analyse GAP for today's vs. tomorrow’s way of working
– Required IT changes to be done and tested
– Secure competence level for pilot Distribution and ROIG
– Implement and follow up pilot market, Singapore
– Full roll-out to all ROIG and Distribution units
6. ©InterIKEASystemsB.V.2010
Market CPC Go Live
SG Live since
Mar 2012
AUW Live since
Dec 2012
MY Live since
Dec 2012
TH Live since
Jan 2013
KW Feb 2013
(wk 9)
SA Mar 2013
(wk 12)
IL May 2013
(wk 22)
CPC Project
roll-out plan
Today
7. ©InterIKEASystemsB.V.2010
Market CPC Go Live
LT Aug 2013 (at
store opening)
TR Sep 2013
GR Oct 2013
CY Oct 2013
BG Oct 2013
TW (not
confirmed)
Oct 2013
AE (not
confirmed)
Nov 2013
QA (not
confirmed)
Nov 2013
CPC Project
roll-out plan
Today
8. ©InterIKEASystemsB.V.2010
Market CPC Go Live
EG (not
confirmed)
Nov 2013
IS (not
confirmed)
Nov 2013
JO (not
confirmed)
Spring 2014
(at store opening)
HK (not
confirmed)
Spring 2014
SPI (not
confirmed)
Spring 2014
DO (not
confirmed)
Spring 2014
ID (not
confirmed)
Jul 2014 (at
store opening)
CPC Project
roll-out plan
Today
9. ©InterIKEASystemsB.V.2010
What is Common Planning Concept?
Today at ROIG
Fragmented need calculation
Tomorrow at ROIG
Integrated need calculation
• ROIG order semi automatically or
manually via Navision to INOS
• Every day or more seldom
• Goods ordered to stores or Retail
Warehouse
• High DD share
• Stock splitter used
• ROIG order based on need via
parameters in Navision to DSP
Fulfillment
• Daily ordering
• Goods ordered to stores, can still be
delivered to External Warehouse
• Higher DD/CP volume rules
• Same prioritization as INGKA Group
stores
10. The Need Calculation Process - Step by Step
Store 1
Store 2
Store 3
Store 4
DC 1
DC 2
Sup 1
Sup 2
- stock
- in-transits
+/- Safety Stock
Store forecast
- stock
- in-transits
+/- Safety Stock
Article 1
DCG Forecast
DC Group
Plan code chains
Dynamic Deployment)
60%
40%
Article 2
Article n
Aggregated total
IKEA need
Cap
Com
12. ©InterIKEASystemsB.V.2010
Basic DSP Fulfillment
• Fulfillment is part of the software called Demand and Supply
Planning (DSP) provided by JDA (external vendor) configured
for IKEA.
• The tool is an automated need calculation system with
administrative support for handling supply chain problems
such as high/low stock, supplier capacity issues, living up to
commitments and quality holds.
These tasks are performed on a daily/weekly basis:
– Fulfillment calculates need at selling unit and DC group
level. Input includes existing dispatch plans, stock levels,
goods in transit and tactical and operational forecasts.
– Fulfillment calculates required safety stock levels
and produces order proposals based on calculated
need, safety stock requirements and the supply chain
matrix. (For stores the calculated safety stock is
overwritten with information from retail system.)
– Fulfillment calculates capacity requirements based
on need, the supply chain matrix and supplier
commitments.
13. ©InterIKEASystemsB.V.2010
Basic DSP Fulfillment
DSP Fulfillment calculates Supply Plans from receiver and sender
perspective on article location level. The Supply Plans represent a
projection of the future stock situation. When the lead time is met the
Planned Arrivals are exported as Order Proposals if goods are available at
sender. The Supply Plans are re-calculated every day.
DSP Fulfillment
Orders are generated only when a
projected need is calculated at receiver
and goods is available at the sender.
Created
order
inside LT
Estimated
order
outside LT
Actual
stock
figure
Projected
stock
figure
14. ©InterIKEASystemsB.V.2010
Basic DSP Fulfillment
DSP Fulfillment generates exceptions based on pre-defined criteria for
different user groups in Supply Chain. The exceptions type are:
• Stock out
• Stock low
• Stock high
• Late in transit
• Capacity
• Commitment
• Safety stock
Working with exceptions make it possible to take pro-active actions to
avoid problems. Retail work with upcoming non-central shortages.
15. ©InterIKEASystemsB.V.2010
Project deliveries
The Common Planning Concept Project will deliver:
• New ways of working
– Working methods aligned with the INGKA Group
– Clear roles and responsibilities for Inter IKEA Systems Distribution,
Retailer Outside the INGKA Group and the INGKA Group
• Centralized need calculation for Retailer Outside the INGKA Group
– Done in DSP Fulfillment (Demand & Supply Planning) system
• Supporting tools
– DSP Fulfillment application to Retailer Outside the INGKA Group and
Distribution
– Order monitoring via OMS/ROI (Order Management System/Retail Order
Information) to Retailer Outside the INGKA Group
• Support in implementation
– Organizational Readiness to raise the base in important areas
– Change Management to secure the benefits and minimize the
productivity dip
16. ©InterIKEASystemsB.V.2010
Core functionality
Centralised need calculation
• Orders generated automatically based on need and availability
• Order point replaced by Safety stock level
• Ordered quantity based on forecast, coverage duration, sales space size,
flexible or non flexible sales space
• No manual orders possible
• Manual input to the need in exceptional cases
• Parameters from Navision influencing the need calculation:
− Expected Weekly Sales, EWS (operational forecast)
− Weekly index (as part of the operational forecast EWS)
− Daily index (to distribute weekly forecast into daily)
− Sales Space Capacity
− Flex or non flexible sales space
− Goods (Product) Dominance
− Safety Stock (Certainty Factor)
− Sellable inventory
− Sales jump (as part of the operational forecast EWS)
− Promotion
− Reserved not in stock
− Manual input to the need
− Order unit type (pallet or multi pack)
− Maximum Delivery Quantity (for Flex concept articles = fillers)
17. ©InterIKEASystemsB.V.2010
Core functionality
Flex concept
• Anticipating orders to increase filling rate in goods carrier
• Flex orders delivered up to 7 days before calculated need
• DC goods only
• Full pallet articles only
• ROIG, Distribution and Distribution Service agree on range for
Flex articles to secure availability
• Store decide which articles to activate and how much (Maximum Delivery
Quantity)
18. ©InterIKEASystemsB.V.2012
Benefits
The Common Planning Concept will contribute to:
• Increased availability
– Better balance between supply and demand in Supply Chain
– More pro-active work, less fire-fighting
– Improvement in information transparency
– Working methods leading to improved service level
• Reduced capital tie up and costs
– Optimize goods allocation buffer stock
– Increase transport filling rate
– Potential to decrease lead times
• Future improvements
– Enable future improvements i.e. Combined Supply, Sales Location Management
– Benefit from synchronized working methods with the INGKA Group
– Be part of developing new improved ways of working
19. ©InterIKEASystemsB.V.2012
Realised benefits
Centralised need calculation and the Common Planning Concept has contributed to:
Retail Global (INGKA Group)
• Less “problem solving costs”, e.g. less price reductions needed for UTG due to better
synchronized plans
• Closing range gaps. News precision has moved from 70% to 90% the last 2-3 years and
improved supply planning is one of the reasons
Retail Switzerland (INGKA Group)
• 2 percent unit increase on average on S1-S3 comparing before and after implementation
Retail China (INGKA Group)
• around 2 percent unit increase on average on S1-S3 comparing before and after
implementation
20. ©InterIKEASystemsB.V.2012
Benefits in Singapore
Sep-Dec 2012 compared to the year before
• Sales
– Store 022 100.6
– Store 045 108.0
• Availability
– Store 022, Service Level S1-S4 articles +5.6%
– Store 045, Service Level S1-S4 articles +3.3%
• Inventory
– Concrete stock -0.70% due to automatic ordering
– Improvement in stock structure
• Transport cost
– Filling rate DC SG +1.55% due to usage of Flex Concept for DC flows
• Internal productivity
– Store 022, Number of handlings per cbm -23%
– Store 045, Number of handlings per cbm -6%
24. ©InterIKEASystemsB.V.2010
Singapore – Realised benefits
Common Planning Concept has also contributed to:
• Better cooperation in country and store commercial team
• Higher and more even knowledge level in stores
• Stronger store management teams
25. ©InterIKEASystemsB.V.2012
Start
around
1000
articlesSoft
start 5
articles
Generic implementation
plan ROIG
Proj. Mile Stone:
Go Live
Proj. Mile Stone:
Roll-out approval
Scale up to
“full range”
Start
new data
transactions
Proj. Mile Stone:
Org. Readiness
approval
-12 -10 -8 -6 -4 -2 0 +2 +4 months
Organisational Readiness
Workshops & training
System & business preparation
& support
Proj. Mile Stone:
ROIG Project
org. in place
Proj. Mile Stone:
Impl. Handbook
handed over,
Working
Methods
introduced
