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20080816 Design To Delivery V2.2 En


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20080816 Design To Delivery V2.2 En

  1. 1. operational excellence through integration “product design to delivery” retail & sales planning methodology overview V.2.2 200809
  2. 2. team composition a team of industry professional with relevant hands-on experiences on the market markets Made in Italy Luxury Goods Automotive Customer eXperience Mgmt lines Supply Chain Mgmt Business Intelligence Retail Management
  3. 3. our mission increase our client’s performances implementing tools, methodologies, services, and expertise to increase customer loyalty and to streamline sales & logistic activities.
  4. 4. what we do ncrease efficiency and streamline activities of “design to deliver” supply product retail business chain CRM design operation intelligence mgmt business process reegineering leverage on the expertise already present in the company sustain change management design and implement business intelligence applications project management during software implementation, web-based sw development increase usage of existing sw application through user training and support
  5. 5. our methodology Discover • process owners & key players interview • process & IT applications assessment • gather business needs Diagnose • identify critical success factors • organization • operation • finance Design • to be plan • “gap” analysys • implementation plan • change management plan Deliver • implement plans • project management • time • cost
  6. 6. objectives setting lines of action negative signnals actions new products launch POS segmentation forecasting supply chain management replenishment key perform. indicators key learning points
  7. 7. business objectives organizaton / operations • increase flexibility and readiness of entire design to delivery process service / volume • roles and responsiblities re-alignement • re-fucus each resource on its core inventory / financials • increase POS sales forecasting competences demand and a better execution of • reduce new products stock-out assortment/castegory during early months of sales management • increase stock turnover controlling • increase new products sales during and optimize inventory over the launch and post-launch period entire supply chain • increase sales orders fill-rate and • sustain company growth with no or respect of promised delivery date minimum increase of inventory • make a more reliable forecast of • obsolete management demand through the usage of advanced BI toolsi maximise shopping eXperience
  8. 8. lines of action organization realignment streamline POS segmentation operations As Is budgeting & product forecasting assortment
  9. 9. negative signals product sales & purchasing production assortment marketing weak control of sales forecast by purchase orders driven sales forecast by sku assortment business unit by personal taste / gutt • no unfullfilled demand • brand, feeling • country / sales channell analysis at POS • area / country, • breakdown by product • little or no usage of BI info, • unsctrucured awereness of category using past sales • shop / pos • stock turnover objectives new opening plans and data only set at category level seasonality at POS no product stock-out inventory level forecast analysis stock turnover set by • by product category only new products financial objectives not • underestimate seasonality • little or no alignment with by customer experience and new products launch sales & mktg loosely defined expectations • understimation of product processes & procedures needs to sustain new products sales • no periodic assessment of distribuition network assortment, forecast growth low POs’ fill-rate and • new shops opening, • production capacity limits respect of delivery dates • underestimate • new products launch sales forecast cannibalization
  10. 10. indicated actions sales & sales & marketing marketing production logistics (corp.) (local) sales data quality procurement plan segmentation & safety level definitions assortment • correctdness • strategic raw materials • central warehouse • timeliness • components and WIP • products • area warehouse management • pos • shop warehouse project management engineering of new • promotion global and local products new products • new shop / pos opening distribution plan • increase reusability of • creative briefing existing components • launch strategies • distribution strategies on demand forecast different sales channels BI competence center actual production • capture unfilfilled demand • keep promised quantities & at shop / pos delivery dates • BI tools • increase flexibility sustain and champion sales forecast • sales forecast at macro • postponement level change consolidation • control product quality
  11. 11. segment product assortment define key dimensions • identify and agree on key dimensions of each business line and / or product line • assign and maintain key dimensions to each sku definition of assortment cell • all sku’s that have same values of their key dimensions assortment cell is the basic tool to: • be perceived as “different” (assortmentwise) by the final customer • control and measure stock-outs • forecast sales • define product obsolescenze and manage “long tail”
  12. 12. product assortment grid Bracelets / Retail price: 1,000 – 5,000€ Steel Steel-Gold Gold-Steel Gold Plain Sku1 Sku2 Sku3 Sku4 Sku5 Sku7 Sku8 Sku10 Sku6 Sku9 Semiprecious Sku11 Sku12 Sku14 Sku17 Sku13 Sku15 Sku18 Semiprec.-Prec. Sku20 Sku22 Sku24 Sku23 Sku25 Sku26 Preciuos Sku27 Sku30 Sku28 Sku31 Sku29 Sku32 Diamonds Sku33 Sku34 Sku35 Sku36 Sku37 Sku38 Rubies Sku39 Sku40 Emeralds Sku41 Zaffires Sku42
  13. 13. new products launch process As Is To Be stand-alone shared unstructured structured reactive / late proactive / planned 4. sales meetings and sell-in orders 1. product brief – first update to purchasing and – agreed with sales / mktg / production replenishment plan – expected retail price band 2. collaborative forecasting 5. merchandise delivery to shops – consensus based and POS • corporate • areas / sales channels managers • marketing corporate & local 6. early sales analisys • production • logistics 7. second update to purchasing and – impact on existing products 3. distribution plan replenishment plan – expected service levels  safety stocks levels – purchasing and replenishment plans
  14. 14. shop and POS segmentation shop segmentation  strategic & brand image building  location ̶ flagship ̶ on street ̶ level 1 ̶ shop in shop ̶ level 2 ̶ shopping mall ̶ level 3 ̶ travel retail outlet BU # 1 on street shop in shop shopping mall airport flagship 2 full BU # on street shop in shop shopping mall airport marketing level 1 full full high1 flagship 3 BU # on street shop in shop shopping mall airport level 2 1 full full high2 high2 level high1 flagship full level 3 2 high2 full level high1 high2 high2 level 1 high1 high2 level 3 2 high2 high1 level high2 low1 low2 level 3 low3 low3
  15. 15. forecasting cycle (top down approach) sales forecast by quarter by product category responsible sales forecast by sku monthly forecast by shop / sales channel by sku sales / agreement on sales forecast mktg updates/changes at assortment cell level definition of inventory levels CEO safety stock levels by area / shop by month by sku sales forecast approval logistics group-wide sales forecast acquisti purchase plan by month by sku distribution plan delivery plan by warehouse by sku by month
  16. 16. anticipate customer demand safety stock levels defined taking into consideration product typology and its seasonality • Core (fast movers): no stock-outs expected • Select (slow movers): no stock-outs expected on assortment cell flexible purchase plan • moving purchase plan • scope of purchase plan equal to product lead-time • flexibility bands vary according to production processes trend 0% 20% 50% flexibility band month 1 month2 month 3 month 4 month 5 month 6 month 7 month 8 month 9 month 10 month 11 month 12 delivery plan
  17. 17. replenishment – owned shops each shops makes available daily sales and stock levels data logistics calculates inventory gaps by shop by sku logistics calculates the optimal distribution plan to: • replenish shop filling the inventory gaps, and replenish the entire supply chain if needed • anticipate shop and product seasonality replenishment frequency: based on sales forecast and distribution network safety stock changes to sales purchasing product on inventory delivery plan levels sale delivery forecast plan shekves gaps definition plan
  18. 18. key performance indicators sales forecast variances vs. actual sales expected vs. actual operation activities and costs re-orders re-routing delays obsolete  budget  production  outlet central warehouse   forecast update  central warehouse  auctions sales  area warehouse  e-commerce area warehouse Production  new product  reverse logistic  inventory levels launches intraarea area warehouse central interarea  area shop shop / POS
  19. 19. key learning points “soft”  get quick wins asap,  top management sponsorship,  increase and reward operations flexibity,  align customer experience objectives with corporate and personal objectives,  change management,  right mix of data analysis and gutt feelings. “hard”  standardize, streamline and accelerate information flows,  standardize, streamline and accelerate business processes,  don’t stop to communicate and align:  shops,  key players,  what’s going wrong and the relevant countermeasures,  product shortages and action plan to minimize bad effect on customer experience.
  20. 20. thank you Ing. Fabio O. Bernardini Managing Partner mobile +39 3383497750 office +39 0683398345 email: founder of “Made in Italy & Luxury Goods” social network