Everyone Can Influence On-Shelf Availability
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1) The document discusses optimizing supply chain synchronization and visibility to increase profitability through faster response to consumer demand. It describes Neogrid as a supply chain management company that provides these services. 2) It outlines Neogrid's services including demand planning, replenishment, strategic sourcing, and multi-tier visibility tools. It also discusses challenges in today's retail landscape like omni-channel and increasing item proliferation. 3) A major focus is on proactively addressing on-shelf availability through consistent measurement, root cause analysis of issues, and prevention rather than reactive fixing of problems. Metrics, alerts, and recommendations are provided to various parties to take appropriate actions.
Everyone Can Influence On-Shelf Availability
- 1. Confidential & for internal use only© Neogrid Copyright | All rights reserved. Confidential & for internal use only Everyone can influence On-Shelf Availability and say goodbye to lost sales Mark McDonnell EMEA Sales Director
- 2. Confidential & for internal use only© Neogrid Copyright | All rights reserved. Confidential & for internal use only© Neogrid Copyright | All rights reserved. • Dominant supply chain synchronization & demand visibility provider founded in Brazil (1999) • Present in North & South America, Europe and Asia • Fortune 500 clients across multiple industries and geographic locations • 700 supply chain professionals in 5 continents • More than 350,00 companies managed through Neogrid Who we are
- 3. Confidential & for internal use only© Neogrid Copyright | All rights reserved.Neogrid Copyright © | All rights reserved. Confidential & for internal use only We optimize and synchronize the entire supply chain to increase profitability through faster response to consumer demand Our Mission
- 4. Confidential & for internal use only© Neogrid Copyright | All rights reserved. What we do? Mnf. HQ Retail Store O-S-A DemandMnf. DC Retail DCManufacturing Planning • S&OP support • Collaboration (CPFR) VisibilityReplenishment • Optimization inventory holdings • Collaboration with suppliers to fulfill inventory requirements (VMI) • Dynamic inventory recommendations based on actual demand • Recommended orders • Inventory visibility • On-Shelf Availability • New item introductions • Sales • Retail execution • Pricing Strategic Sourcing • RFx Functionality • Multiple auction types • Collaborative negotiations • Full event traceability
- 5. Confidential & for internal use only© Neogrid Copyright | All rights reserved. Multi-Tier Visibility
- 7. Confidential & for internal use only© Neogrid Copyright | All rights reserved. Automation
- 8. Accelerating on-line pressure: Convenience Assortment Customer specific customization $222,000 Sales / Minute 368 Million Items Today’s landscape
- 9. Retail response Omni-Channel Customer engagement Item proliferation Store specific assortment
- 10. Dealing with competitive environment On Shelf Availability 1st Base Perceived 97%– 99% 94%– 96% Actual Disconnect Impact per £billion sales = £10 - £40 Million
- 11. Wrong Place
- 12. Inaccurate Data
- 13. Wrong Time
- 15. The right place: From the consumers perspective The right time: Before they occur The right process: Root cause identification Preventative action On-Shelf-Availability
- 16. Confidential & for internal use only© Neogrid Copyright | All rights reserved. Reactive Process: On-Shelf Availability Identification Targeting and alerting Action Feedback Fixing today’s problem • Expensive intervention • Already lost sales • Unable to effectively intervene
- 17. Confidential & for internal use only© Neogrid Copyright | All rights reserved. Proactive approach to OSA Through consistent measurement and visibility into root cause, focus is on Prevention
- 18. 18 Actual SalesInventory Expected Sales Out-Of-StockProbability Gap KPI Rt. CauseAlerting Measurement
- 19. Phantom stock Negative stock Order not placed Order not received Stock not on-shelf Shrink Partial OOS Root Cause
- 20. Confidential & for internal use only© Neogrid Copyright | All rights reserved. Distributed Insights Store / DC Store Manager Adjustment Routing Empty shelf Partial out-of-stock Adjusts inventory Fills shelf Operations Communicates discrepancy Suggests order Issues order Virtual inventory Total out- of-stock Empty shelf Partial out-of-stock Supply Chain Merchandiser Manufacturer Retailer Manufacturer Shelf
- 21. Confidential & for internal use only© Neogrid Copyright | All rights reserved. Distributed Reporting
- 22. Confidential & for internal use only© Neogrid Copyright | All rights reserved. Impact of out-of-stocks go beyond a few missed sales opportunities today Sales 59 Lost Sales 22 Demand 81 ? 81 Impact 10 12 10 12 14 3 10 10 Friday Saturday Sunday Monday Tuesday WednesdayThursday Conditions
- 23. Confidential & for internal use only© Neogrid Copyright | All rights reserved. Zero Critically low low Ideal High Very High DC 1 Zero Critically low low Ideal High Very High DC 2 Zero Critically low low Ideal High Very High Store 198 Zero Critically low low Ideal High Very High Store 633 Inventory High Stock Ideal Stock Critical Stock Overstock Target Level ** ** * *
- 24. __Inventory __Norm __Critical Inventory IVD TVD Inventory Excess Risk / Out of Stock Prioritising actions based on risk
- 25. Confidential & for internal use only© Neogrid Copyright | All rights reserved. Global Manufacturer Out-of-Stock Trend 0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 201301 201302 201303 201304 201305 201306 201307 201308 201309 201310 201311 201312 201401 201402 201403 201404 Non-VMI VMINeoGrid Before NG TVD – Throughput Value Day = Amount of Money at risk of Stock-Out Company Confidential
- 26. Confidential & for internal use only© Neogrid Copyright | All rights reserved. Global Manufacturer Overstock Trend 0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000 201301 201302 201303 201304 201305 201306 201307 201308 201309 201310 201311 201312 201401 201402 201403 201404 Non-VMI VMINeoGrid Before NG IVD – Inventory Value Day = Amount of Money in Overstocks Company Confidential
- 27. Confidential & for internal use only© Neogrid Copyright | All rights reserved. A practical approach to addressing OOS’s and creating value 1 2 3 5 4 Root Cause First Root causes need to be addressed before the symptoms Start at the Beginning Upstream should be fixed before downstream Store Goes Last Fix upstream issues first Right Person Alerts have to be sent to the right person – in the value chain Recurring OOS’s Recurring OSA issues are more important than random ones 6Value & ROI Customer satisfaction matters and provides the ROI
- 28. Confidential & for internal use only© Neogrid Copyright | All rights reserved. Neogrid can provide the tools you need to address OSA Collaboration Retailer Collaborative Business Processes Consulting Process Flows, Ways of Working Drive Action across the enterprise Integration Metrics , Alerts, KPI’s integrated into current systems Measurement OSA – all item, store & day combinations Store-DC-HQ Alerting Short term OSA , Long term OSA, Root Cause HQ Use Cases DC Alerts, D’Void Pushes
- 29. Confidential & for internal use only© Neogrid Copyright | All rights reserved. Thank You