Retail Supply Chain and the Customer Experience: The End-to ...

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  • Lonnie
  • Lonnie
  • All this is great, but it puts increasing pressure on the Supply Chain
  • From supply market to demand market to aftermarket The retailer’s major objectives are a 5% reduction in packaging by 2013,
  • Message here is that systems have evolved…aps, erp etc is behind the fire wall…exchanges move data back and for the between enterprises,,,the new generation IS THE ENTERPRISE and it lives on the web synchronizing the federated members providing and dingle version of the truth and moving into predictive capabilities
  • Bill Information systems have trouble telling you who your really profitable customers are. Knowing what they really want – how to get a bigger share of their wallet.
  • Retail Supply Chain and the Customer Experience: The End-to ...

    1. 1. Retail Supply Chain Ann Grackin CEO-ChainLink Research
    2. 2. Agenda <ul><li>Welcome </li></ul><ul><li>Changing Face of Retail </li></ul><ul><li>Changing Face of the Supply Chain </li></ul><ul><li>What it will take going forward </li></ul>
    3. 3. Changing Face of Retail
    4. 4. We Need World View
    5. 5. Now more than ever, a networked economy…
    6. 6. And Retail Has Changes Beyond Replenishment Not all Retail is about Convenience And assortment “ Stack it high. Watch it fly. Price it low. Watch it go.”
    7. 7. We are on the Web DNS Query Growth
    8. 8. We are on the Move Human Migration and Mobility
    9. 9. Huge Demographic Changes Rank City/Urban area Country Average annual growth 2006 to 2020, in % 1 Beihai China 10.58 2 Ghaziabad India 5.20 3 Sana'a Yemen 5.00 4 Surat India 4.99 5 Kabul Afghanistan 4.74 6 Bamako Mali 4.45 7 Lagos Nigeria 4.44 8 Faridabad India 4.44 9 Dar es Salaam Tanzania 4.39 10 Chittagong Bangladesh 4.29 11 Toluca Mexico 4.25 12 Lubumbashi Congo 4.10 13 Kampala Uganda 4.03 14 Santa Cruz Bolivia 3.98 15 Luanda Angola 3.96 16 Nashik India 3.90 17 Kinshasa Congo 3.89 18 Nairobi Kenya 3.87 19 Dhaka Bangladesh 3.79 20 Antananarivo Madagascar 3.73 21 Patna India 3.72 22 Rajkot India 3.63 23 Conakry Guinea 3.61 24 Jaipur India 3.60 25 Maputo Mozambique 3.54 26 Mogadishu Somalia 3.52 27 Gujranwala Pakistan 3.49 28 Delhi India 3.48 29 Pune (Poona) India 3.46 30 Las Vegas USA 3.45 31 Addis Ababa Ethiopia 3.40 32 Indore India 3.35 33 Faisalabad Pakistan 3.32 34 Rawalpindi Pakistan 3.31 35 Brazzaville Congo 3.29 36 Peshawar Pakistan 3.29 37 Khulna Bangladesh 3.24 38 Suwon Republic of Korea 3.23 39 Karachi Pakistan 3.19 40 Asunción Paraguay 3.17 41 Lahore Pakistan 3.12 42 Asansol India 3.11 43 Riyadh Saudi Arabia 3.09 44 Dakar Senegal 3.06 45 Multan Pakistan 3.06 46 Valencia Venezuela 3.05 47 Jakarta Indonesia 3.03 48 Brasília Brazil 2.99 49 Port-au-Prince Haiti 2.98 50 Palembang Indonesia 2.94 51 Jidda Saudi Arabia 2.93 52 Accra Ghana 2.93 53 Agra India 2.93 54 Hyderabad Pakistan 2.91 55 Bandung Indonesia 2.90 56 Wenzhou China 2.90 57 East Rand (Ekurhuleni) South Africa 2.89 58 Wuhan China 2.87 59 Mosul Iraq 2.86 60 Amritsar India 2.85 61 Bursa Turkey 2.85 62 Manaus Brazil 2.83 63 Meerut India 2.83 64 Yaoundé Cameroon 2.80 65 Changsha China 2.80 66 Belém Brazil 2.79 67 Bangalore India 2.79 68 Heze China 2.78 69 Tijuana Mexico 2.77 70 Shantou China 2.77 71 Maceió Brazil 2.75 72 Algiers Algeria 2.74 73 Ahmadabad India 2.73 74 Lucknow India 2.72 75 Douala Cameroon 2.71 76 Austin USA 2.69 77 Bhopal India 2.69 78 Atlanta USA 2.64 79 Ujung Pandang Indonesia 2.63 80 Ludhiana India 2.63 81 Managua Nicaragua 2.62 82 Zhanjiang China 2.59 83 Karaj Iran 2.59 84 Jamshedpur India 2.59 85 Mecca Saudi Arabia 2.56 86 Vadodara India 2.55 87 Davao Philippines 2.53 88 Kanpur India 2.53 89 Ciudad Juárez Mexico 2.51 90 Tegucigalpa Honduras 2.51 91 Shenzhen China 2.51 92 Srinagar India 2.50 93 Coimbatore India 2.49 94 Abidjan Côte d'Ivoire 2.49 95 Yangon Myanmar 2.46 96 Dhanbad India 2.46 97 Rabat Morocco 2.45 98 Aleppo Syria 2.42 99 San José Costa Rica 2.42 100 Khartoum Sudan 2.41
    10. 10. Web Business WW are Growing <ul><li>90 + Million domain names exist in the world </li></ul><ul><li>29% growth </li></ul><ul><li>Rate in 2005 </li></ul><ul><li>Growth rate is increasing quarter over quarter </li></ul>Source: Zooknic, October 2005; VeriSign, October 2005 O THER
    11. 11. And Business are Moving Out of the 4 Walls Enterprises …….. and Federations Federations ……SOHO…….Self Employed………and Consumers Enterprise A Enterprise C Enterprise G … .. “ within the four walls” Shared execution Fully outsourced processes Process A Process B Process C Process D Enterprise H Enterprise Y Enterprise B Enterprise X Enterprise Y Enterprise Z Enterprise A Enterprise B Enterprise C Enterprise G Enterprise X Enterprise Z % of businesses at home is increasing… Micro loans increase WW 40%+ quarter over quarter
    12. 12. Economic Mobility                              Mercer World middleclass increases Most expensive shopping streets in The Americas Street City 5th Avenue New York East 57th Street New York Madison Avenue New York Rodeo Drive Los Angeles N Michigan Avenue Chicago Union Square San Francisco Bloor Street Toronto Iguatemi Shopping Sao Paulo Rio Sul Shopping Rio de Janeiro Newbury Street Boston Most expensive shopping streets in Europe Street City Champs Elysées Paris Oxford Street London Bond Street London Covent Garden London Brompton Road London Faubourg St Honoré Paris Grafton Street Dublin Blv Haussmann Paris Kaufingerstrasse Munich Tverskaya Moscow
    13. 13. We are Searching for Something Else Maslow’s Hierarchy Revisited Values Experience Results Price Availability
    14. 14. Stepford Village Show new mall concepts What have we got from Best Buy…
    15. 15. Main Street Show new mall concepts What have we got from Best Buy…
    16. 16. Destinations <ul><li>Starbucks: Business Meetings </li></ul><ul><li>Whole Foods: Lunches and Diners </li></ul><ul><li>Wal-Mart: Health Clinics </li></ul><ul><li>American Girl: Tea Parties </li></ul><ul><li>Cereality: Just Like Saturday Morning </li></ul>
    17. 17. The Commoditization Blues Price / Margins Time Revenue and Margin Loss Product Offering C Product Offering B Product Offering A
    18. 18. Evolution of Marketing Production Orientation Sales Orientation Marketing Orientation Outcome Orientation Late 1800’s Early 1930’s Mid-1950’s 2000 <ul><li>Focus: Increase Output </li></ul><ul><li>Demand > Supply </li></ul><ul><li>If we make it, they will buy it ! </li></ul><ul><li>Products </li></ul><ul><li>Focus: Increase Demand </li></ul><ul><li>Demand < Supply </li></ul><ul><li>“ Hard Sell” </li></ul><ul><li>Products </li></ul><ul><li>Focus: Creating Demand </li></ul><ul><li>Demand < Supply </li></ul><ul><li>Educated Consumers </li></ul><ul><li>Products & Services </li></ul><ul><li>Experience </li></ul><ul><li>Global </li></ul><ul><li>Results </li></ul><ul><li>Services </li></ul><ul><li>Outcomes </li></ul>Source: Fundamentals of Marketing, Stanton, Etzel, Walker Seller Power Buyer Power
    19. 19. Results Power by the Hour
    20. 20. Experience
    21. 21. Outcome Business Models Increasing Margins Embeddednes of Needs and Values” Make + Service with SLAs Leasing Managing Out-Sourced Processes Selling Outcomes Warranties $ Make Only Make + Service Doll: China: $2.80 Retailer: $19.99 Fashion Party: $1,020.00
    22. 22. Where Do they look for their Experience The whole consumer economy is going experiential
    23. 23. We Think We Know the Customer
    24. 24. Changing Face of Supply Chain
    25. 25. The Supply Chain Challenge <ul><li>The irrationality of a thing is no argument against its existence, rather a condition of it </li></ul>Friedrich Nietzsche
    26. 26. Money is Lost in the Chain
    27. 27. Money is Lost in the Store <ul><li>Optimal Layout </li></ul><ul><li>Locating Merchandise </li></ul><ul><li>Store Layout </li></ul><ul><ul><li>Plan-o-grams vs. real-o-grams </li></ul></ul><ul><ul><li>size of store </li></ul></ul><ul><ul><li>stockroom space </li></ul></ul>
    28. 28. Money is Lost at the Shelf <ul><li>Over/under order by “order to fill” </li></ul><ul><li>Order “visually out” or low stock items vs.. All items </li></ul><ul><li>Missing shelf tag items do not get ordered </li></ul><ul><li>Not ordered for multiple locations </li></ul><ul><li>Not accurately ordered for promotions/Business events </li></ul><ul><li>Missing an order cycle </li></ul><ul><li>Provided automated solution to manual ordering </li></ul><ul><li>Produced simple item forecast </li></ul>
    29. 29. Money is Lost in IT
    30. 30. Money is Lost Through Lack of Knowledge % Sales 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Low High Store Labor Shrink Lost Sales WTW Inventory Inventory
    31. 31. A Vision for the Future
    32. 32. RFID is a Multi-Enterprise Solution <ul><li>Data Collection for Language Barriers </li></ul><ul><li>Bath/lot control </li></ul><ul><li>Mfg routing for unique packaging </li></ul><ul><li>Identifying Expiration </li></ul><ul><li>Shrinkage </li></ul><ul><li>Cold Chain-Temperature Sensing </li></ul><ul><li>Compliance with Customer </li></ul><ul><li>Track </li></ul><ul><li>Re-route </li></ul><ul><li>Secure </li></ul><ul><li>Cold Chain </li></ul><ul><li>Store Ops-Micro Merchant </li></ul><ul><li>PSA </li></ul><ul><li>Find product on shelf </li></ul><ul><li>Right product-no returns </li></ul><ul><li>Shrinkage </li></ul><ul><li>Asset Mgnt </li></ul><ul><li>Home Health </li></ul><ul><li>Freshness </li></ul><ul><li>Entertainment </li></ul>
    33. 33. Retail is Multi-Channel
    34. 34. A Vision of the Future
    35. 35. Create: Sustainable Supply Chain s Wal-Marts Green Packaging Initiatives Could Produce Ripple Effects
    36. 36. Update Your Role
    37. 37. Revitalize Your Vision
    38. 38. Create Brands that Reflect Value
    39. 39. Revise the Technology Predictive Networks Total Sourcing Models Expressive Bidding Total Cost to Serve Compliance Auditing Risk Management Collaboration a Given! 2000 1990 2004 MRP Data Warehouse, OLAP Event Management Spreadsheets Optimization (APS) RFID Client Server APPLICATIONS ARCHITECTURES Web (Service-based) Mainframe Third Paradigm Planning Synchronization
    40. 40. Revisit the basics
    41. 41. Innovate your Process <ul><li>MacDonald's </li></ul><ul><li>Several ordering and payment system pilots </li></ul><ul><ul><li>SpeedPass (Mobile) </li></ul></ul><ul><ul><li>FreedomPay </li></ul></ul><ul><ul><li>TransCore </li></ul></ul><ul><ul><li>Paypass (Mastercard) </li></ul></ul><ul><ul><li>Etc…. </li></ul></ul><ul><li>There is more to this story than in the Press </li></ul><ul><ul><li>Indoor payment vs. outdoor dry thru challenges </li></ul></ul><ul><ul><li>Other applications for entertainment </li></ul></ul><ul><ul><li>Other partnerships within theme parks etc.. </li></ul></ul>
    42. 42. Partner: Federated Models <ul><li>NOKIA PHONE </li></ul><ul><li>Payment for small retail purchases </li></ul><ul><li>SmartCoversTM for 3300/3500/6360 </li></ul><ul><li>MasterCard, AT&T, Chase, 8 retailers </li></ul>
    43. 43. Consider the Total Process <ul><li>Total flow from access to parking to store layout to checkout… </li></ul>
    44. 44. Conclusions
    45. 45. The Challenge <ul><li>Supply Chain </li></ul><ul><li>Managing Variability </li></ul><ul><li>Retailer: </li></ul><ul><li>Wallet size/loyalty of customers </li></ul><ul><li>Multi Channel Mgnt </li></ul><ul><li>Orchestrated the Sale </li></ul>How to gain of larger share of customer spend <ul><li>Product/Brand : </li></ul><ul><li>Creating Innovation </li></ul><ul><li>Product Life Cycle </li></ul><ul><li>Brand Power </li></ul>
    46. 46. What’s Your Strategy? Growth? Cost Reductions? or
    47. 47. Get a World View
    48. 48. What Changes? <ul><li>Experiences have surprise : How to design dynamic Supply Chains? </li></ul><ul><li>Building Relationships: Not selling things </li></ul><ul><li>Completeness of Offerings: Federations </li></ul><ul><li>Financial Models Change </li></ul><ul><li>Innovation Engines Needed </li></ul><ul><li>Visibility in Markets </li></ul><ul><li>Predictiveness in Technology </li></ul>
    49. 49. Embrace Change <ul><li>You need chaos in your soul to give birth </li></ul><ul><li>to a dancing star. </li></ul>Friedrich Nietzsche

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