Tom Rose, Senior Supply Chain Manager at Asda spoke at the SCL Event UK 2013

1. Tom Rose
Senior Supply Chain Manager –
Supply Chain Development

2. Designing Collaborative
Solution to Benefit
the Customer

3. Changing customer demand

4. What has this meant for the Supply Chain?
•More volatility resulting from unforecasted
price moves
•More highly used distribution assets
•Significant growth in item-store combinations
•True 7 day operations

5. Evolution of the Supply Chain
Today Tomorrow
•Day 1 for 2
•Day 1 for 3/4/5
•Demand based
•Full trucks
•Responsive to
•Low frequency customer demand
•Constrained Demand •High frequency
•Fixed Orders •Lowest cost

6. The Asda journey...
Transformation into 314 Superstores
a Multi Format /
32 Supercentres
Multi Channel
Retailer 186 Supermarkets
32 Living
*99% Home Shopping
*100% Direct
*UK coverage

7. Asda has been going through major
change... 135 stores in
26 weeks!
7
7

8. The Supply Chain mission...
Element... Measured By...
Competitive Availability • To be top quartile on availability
Lowest Possible • Right level of service to our customer in store
Operating Costs at the lowest possible end to end cost
The Least Amount of • Grow inventory, at a lower rate than sales
Capital • Leverage of capital investment
Serving All Formats and
• Recognising our changing business
Channels

9. What does collaboration mean for Asda?
Not adding costs to
Asda or to Vendors
Improving
Customer
Availability
Not moving inventory around the
value chain

10. What makes collaboration with
Asda successful?
•Open, honest and transparent
•A mutual understanding of each other’s business
•Shared and agreed KPIs/objectives
•Top level commitment from Asda and Vendor
•We are Better Together

11. Asda collaboration journey so far...
•One to One Relationships with vendors
•30/60/90
•Agreement of shared KPIs
•Created Win:Wins through agility on both sides
•Reduced leadtimes
•Speed of action drives incremental sales !
•Structured for success
•Communication, communication, communication.

12. Experience of working together
Sharing “intent” changes the
landscape
Sharing the best of both businesses
opens opportunities

13. Agility pays…..
A supply chain more responsive to consumer demand, as a result of shorter lead times, the
consolidation of loads and increased order opportunities enabling more frequent deliveries
FRI SAT SUN MON TUE WED THUR FRI SAT
After Before
KEY Asda Price
Changes Order Day 3 extra days sales / more
Day 1 for 3 opportunities for consumers to buy!
Non-Order Day Lead Time
Source: Kraft Foods UK, IGD

14. What are the benefits for suppliers?
• Lean & Agile = Availability & Sales
• Increased engagement
opportunities
• Opportunity to leverage the
power of the Asda network
• Inventory reduction
• Improved collaboration & improved flow = Better forecasting

15. But what next …..
• Collaboration between two parties only takes us so far
• Collaboration across multiple parties
unlocks the next level
• Think outside of the box
• It is challenging, but the
rewards are huge
• It is no longer one size fit’s all

16. Asda inbound logistics options
3
PCC
Asda DC
1
DYNAMIC
Supplier
2
Cross Dock
1 Full Truck Load/Direct Delivery - ready assembled PO’s delivered directly to the Asda DC's.
Cross Dock - collect ready assembled PO's from the supplier, cross dock and deliver to the
2
Asda DC's consolidated with other suppliers PO's
PCC - collect full loads from the factory, receive, store, order assemble, and deliver to the
3 Asda DC's in full truck loads consolidated with other supplier PO's

17. Objective: 7 day Supply Chain
Summer
Winter

18. Collaboration is delivering...
Inbound Inventory Availability

19. Multi-supplier collaboration
• Three suppliers, all based within nine miles of each other
• Ordering 2/3 times a week in full trucks
• Day 1 for 3 lead time
• Concept
– Coordinate together
– Seven day ordering
– Customer demand based
– Day 1 for 2

20. Lead time to shelf
S1
S2
S3

21. Time line
Vendor
Confirm order and
ASDA any allocation to 3PL
ASDA 3PL ASDA
PO’s send to Provide extra slot Confirm PO’s to
PO’s Produced supplier and 3PL fixed and extra
times
bookings
06:00
07:00
08:00
09:00
10:00
12:00
13:00
14:00
15:00
16:00
17:00
11:00
3PL ASDA
ASDA Confirm extra loads Inbound references
PO’s Review required by depot provided to 3PL
ASDA
Completed
Capacity alert

22. Collaboration is delivering...
Inbound Inventory
Costs
Availability Forecast Accuracy

24. Top 60 Suppliers
Programme • Cross category
• Structured approach
approach •
•
Agreed developments
Collaborative working
Non-Primary DC Inbound
Consolidators Master Smoothing
• Co-ordinate inbound Supplier • Pallets per Day
• Reduce lead time • Better resource allocation
• Increase frequency Plan • Improved planning
Minimum Standards
• Day 1 for 3
• Any of seven days
• Right Economic Order
Quantity (EOQ)

25. Engagement
• Bring all suppliers up to a minimum standard
• Day 1 for 3
• Any of 7 days
• Within ASDA EOQ
• Coordinate deliveries by despatch point, not supplier
• Smooth inbound flow to maximise cost effective end to end throughput
• Structured cross category
engagement with the top
suppliers
• Structured approach
• Integrated with Top to Top meetings

26. Maturity matrix
Fresh Ambient/GM/Frozen
• Service Reliability • Lead Time
Agile
• Supply Constraints • Delivery /Order Days
• Collaborative Planning • Fill Rate
• Promotion Support • Collaborative Planning
• Waste • Relationship Management
• Order Cut Off • Order Restrictions
All
Lean
• Buying Terms
• Transport Integration
• Freight Conversion
• Consolidation Cube
• Utilisation Lean Receiving

27. Programme framework
“As Is” Maturity Matrix
“As Is” Opportunities “To Be”
Joint
Supply Chain and Supply Chain
Action Plan
Mapping Pain Points Mapping
“To Be” Maturity Matrix

28. Maximising the opportunity
• There are no black and white’s..
• It is about end to end cost, not just any one area
• It is about how we use our combined resources
• We cannot look at any cost in isolation
What is the best result end to end

29. Maximising the opportunity
If you see an opportunity,
challenge us!

30. Commitment
From us: From you:
• to work with you • to work with us
• to listen to you • to actively listen
• to engage with you • to engage in opportunities
• to challenge you • to challenge us

31. Keys to successful collaboration
with Asda
• Take risks - don’t be afraid to be innovative and adapt
• Work together to see the
opportunities
• Be open and don’t give up
• There isn’t one collaboration
model! It’s not one size fits all

32. Be brave, take
risks
Be open and Think outside
transparent the box