Learn how Teradata Solutions and Business Consulting can help you with Enabling a Demand Driven Supply Chain. This was presented at ECR meeting at Moscow on February 12, 2014. Including some Retail customer cases

1. ENABLING A DEMAND
DRIVEN SUPPLY CHAIN
(DDSC)
Moscow,
February 12th , 2014
Frank Vullers
Senior Industry Consultant Retail
Category Management supported by Detailed data
Teradata EMEA

2. AGENDA
Supply Chain
Management
SCM Solutions
Category Management supported by Detailed data
Customer
Cases

3. Effect of Poor shelf availability
Both Retailers and Manufacturers suffer when Item is Out
of Stock
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2/18/2014
Enabling a Demand Driven Supply Chain (DDSC)

4. From Traditional to Demand Driven SCM
Traditional
Demand Driven
•
Focus on Assets & Products
•
Focus on Customer service
•
SCM Costs as % of turnover
•
Service levels, Out of Stock
•
Supply chain scope is Logistics
•
Scope on Supply networks
•
Visibility only inventory on-hand
•
Visibility across the entire chain
•
incremental SC improvements
•
Temporal models & Analytics
sense future problems &
Opportunities
•
Sales & Operations planning is
not a business discipline
•
Sales & Operations plans are
disciplined and effective
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Enabling a Demand Driven Supply Chain (DDSC)

5. From Traditional to Demand Driven SCM
Traditional
Demand Driven
Not every company is at once fully Demand driven
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Enabling a Demand Driven Supply Chain (DDSC)

6. The Demand Chain
Results
Inputs
• Accurate demand forecast
• Replenishment plans
• Allocation plan
• Store/Sku: Forecasts, Orders,
Allocations
• Individual location based
historical sales, future events
Demand Pulls Product
How much of each item do I need to
have at each Location and when?
Source
Carrier
DC
Store
Inputs
Consumer
End Results
• PO data, Partners, Orders,
ASN‟s
• Expected ship and arrival
(ETA‟s)
• Anticipated events
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2/18/2014
Product Flows Efficiently
Is the ordered product moving efficiently
through the supply chain to the Locations,
according to plan and latest trends?
Enabling a Demand Driven Supply Chain (DDSC)
• Product in the right place at the
right time
• Improved sales and turns
• Customer satisfaction

7. Strategic Challenges: SCM & Russia
• Staff turnover is high
• lack of well-trained
qualified people
Supply
chain
Planning
• Customers & large
territory
• Forecasting
challenging
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2/18/2014
Courtesy to G. Moore‟s “Living on the fault line”
• reverse logistics
processes & cross
the border again.
Sourcing
Production
Delivery
• local suppliers poor
reliability
• importing from abroad
• convincing foreign suppliers
to move to Russia
Enabling a Demand Driven Supply Chain (DDSC)
Returns
• Russia the largest
country
• lack of warehouses
• fragmented market

8. Strategies for these Challenges
the right transportation
mode
And balancing
transportation costs,
inventory costs and
required responsiveness
levels
supply chain strategy
oriented
towards effectiveness,
flexibility and
responsiveness
Supply
chain
Planning
demand forecasts and outof-stock levels can
be improved through
better information sharing
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2/18/2014
Courtesy to G. Moore‟s “Living on the fault line”
Sourcing
Production
Delivery
Returns
keep extra safety stocks to
overcome improvements in
information sharing
Enabling a Demand Driven Supply Chain (DDSC)
Consumers do want a
broad range of choice,
but are willing to switch if
products are unavailable

9. AGENDA
Supply Chain
Management
9
2/18/2014
SCM Solutions
Category Management supported by Detailed(DDSC)
Enabling a Demand Driven Supply Chain data
Customer
Cases

10. SCM Solutions
SCOR® Framework
10 2/18/2014
How Can Teradata Help ?
Enabling a Demand Driven Supply Chain (DDSC)

11. Demand Chain Manager DCM
Better Forecasting
& Replenishment
Assigns Sku‟s to
Models
Long and Short
Seasons
Best Fit Models
Store SKU, Scored
Weekly
Seasonal
Profile
Quick Start
Forecasts for Basic
and Short Season
Products
A
B
60 %
E
A
Time Phased
Demand Plan
B
Promotion Lifts
C
D
SKU
Ranking
E
Weekly SKU
Ranking
Ranking by
location,
merchandise
groups
Orders/Allocations
calculated on
forecasts/ currentprojected on hand
inventory
Calculates Forecast
Lifts, Simulation
11 2/18/2014
C
D
Use Actual Results
Intelligent Product
or Forecast Values,
Introduction
link multiple skus
Modeled Versus
Historical Events
Client Defined
Adaptive Response
Deseasonalized
ARS, Best Fit
Allocation
Enabling a Demand Driven Supply Chain (DDSC)
Point in Time and
Time Phased Orders

12. Poor BI Performance & Monitoring
Multiple
Sources
Inconsistent
Data Sourcing
Multiple
Data Marts
Ad-Hoc
Tools and
Processes
Disparate
Reports
Frustrated End-users &
Decision Makers
Marketing
Customer
CRM
Product
Management
Sales
Operations
Profitability
Customer
Care
Regulatory
Reporting
Finance
The Excel Army
The IT Hair Ball
12 2/18/2014
Analytics and Reporting
Enabling a Demand Driven Supply Chain (DDSC)
Real Time Insight

13. Integrated Data Warehouse+
Multiple
Sources
Consistent
Data Sourcing
Integrated
Data
Warehouse
Dedicated
Tools and Aligned
Processes
Integrated
reports
Real Time Insight
Happy End-users &
Decision Makers
Marketing
Customer
CRM
SALES
Product
Management
Sales
LOCATION
ITEM
Operations
Customer
Care
Profitability
Retail
Data Model (RDM)
Finance
Regulatory
Reporting
Proper BI Tools
IT Lasagna
13 2/18/2014
Analytics and Reporting
Enabling a Demand Driven Supply Chain (DDSC)

14. Retail / Manufacturing experiences
Real Time Insight
Detailed Cost
Analysis
Benefits
Scalable Size – Users – Usage
Realtime Reporting – Alerting – Monitoring
Fast integration of datamarts
Retail business Knowledge
14 2/18/2014
Enabling a Demand Driven Supply Chain (DDSC)

15. AGENDA
Supply Chain
Management
15 2/18/2014
SCM Solutions
Category Management supported by Detailed(DDSC)
Enabling a Demand Driven Supply Chain data
Customer
Cases

16. Customer cases
Better Forecast & Replenishment
Case 1: HEMA Demand Chain Manager
Real time insight
Case 2: Monoprix On Shelf Availability
Case 3: Shipment Tracking
Case 4: Tesco Link
Detailed Cost Analysis
Case 5: Transportation optimization
16 2/18/2014
Enabling a Demand Driven Supply Chain (DDSC)

17. Case 1: HEMA DCM
Objective
Better Forecasting
& Replenishment
Analysis & Actions
Result
•
•
Become
demand driven
•
Replacement of supply chain
steering model
Teradata Demand Chain manager
(DCM) application became
foundation of HEMA new supply
chain model
•
•
•
17 2/18/2014
Enabling a Demand Driven Supply Chain (DDSC)
Opened 200 stores
(450->664) still
delivered from same
DC
Inventory levels
exceeded objectives
Less frequent
delivery to stores
Side effect: Reporting
speeded up

18. HEMA Today…
Better Forecasting
& Replenishment
• More than 650 stores in multiple countries (NL, BE, F, D)
> Including 150 + Franchise stores
700
•
•
•
•
Variety store
Hardgoods, food and fashion items
Private label
Award winning formula
18 2/18/2014
600
500
400
300
200
100
0
1960
Enabling a Demand Driven Supply Chain (DDSC)
1980
2000
2020

19. HEMA Supply Chain
Better Forecasting
& Replenishment
Internet
Wholesale
DC Promotions (Push)
Suppliers
• 500 suppliers
• Europe and Far East
• Leadtime 1 day – 26
weeks
• All private label and
HEMA design
DC Continuous (Pull)
• One central DC
> Highly automated
• Continuous items
> Call off orders based on
forecast
• Seasonal items and
promotions
> Promotion uplift
calculation; confirmed
by all stores
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Enabling a Demand Driven Supply Chain (DDSC)
Stores
• General
> Modular assortments
> Assortments per store
• Pull (continuous items)
> Min – Max system;
> 1-5 times per week
> Lead time DC: 1-2 days
• Push (including
promotions of pull items)
> Allocation of stocks
> Delivered 1 – 2 weeks before

20. What is „Deliver to Demand‟ concept?
• Deliver to Demand enables us to become
demand driven
• Logistical streams will become automatic
• Share forecast with suppliers early in
planningsprocess
20
20 2/18/2014
Enabling a Demand Driven Supply Chain (DDSC)
Better Forecasting
& Replenishment
„Deliver
to
Demand
‟

21. Why did HEMA need this concept ?
Better Forecasting
& Replenishment
The supply chain steering model was out of date





Based on old principles
No relation between store, DC planning and promotional push
No input of local influences
Not proactive but reactive;
Forecasts created outside systems (Excel) for Push streams. No
link with real Sales.
21
21 2/18/2014
Enabling a Demand Driven Supply Chain (DDSC)

22. Hema Project
•
•
•
•
•
•
Phase 1:
Phase 2.1:
Phase 2.2:
Phase 3.1:
Upgrade to
Phase 3.2
Better Forecasting
& Replenishment
Continuous products
Long season:
Push-Pull-Push
Short season
Push- 2nd Push
Ambient Food (Whine, etc)
DCM version 4.1
Food Cakes, pastry
• Next Steps
22 2/18/2014
Enabling a Demand Driven Supply Chain (DDSC)
2009
2010
2010
2011
2012

23. Demand Chain Manager(DCM) Customers
Better Forecasting
& Replenishment
Food & Beverage
Drugs
Health & Beauty
Grocery/
Liquor
Apparel
Shoes
Accessories
Fashion/
Softlines
Home Furnishings
Consumer Electronics
Furniture/Appliances
Building Materials
Hardlines
Auto Parts
SILKROUTE
Office Supplies
Books,Music,Software
23 2/18/2014
Handleman
Company
Enabling a Demand Driven Supply Chain (DDSC)

24. Case 2: On Shelf Availability (OSA)
Objective
Analysis & Actions
•
•
Needed to
understand the
causes of OOS
24 2/18/2014
•
•
Analysis root causes
On Shelf Availability(OSA) report
for top 2000 SKUs
to identify both operational and
supply chain issues
predicts on shelf out of stocks in
order to prevent them
Enabling a Demand Driven Supply Chain (DDSC)
Real Time Insight
Result
•
•
•
Reduction OOS
resulting in 1%
increase in sales
Improved in-store
procedures
Improved stock
accuracy

25. Case 3: Shipment Tracking
Objective
Letting
Business
customers
check their
shipment
status online,
and get rid of
separate
datamart
25 2/18/2014
Real Time Insight
Analysis & Actions
•
•
Data loads into Data Warehouse to
meet service level agreements,
and for route optimization and
profitability analytics
Transaction data now loads within
15 minutes to Teradata with direct
access via the web.
Enabling a Demand Driven Supply Chain (DDSC)
Result
•
•
•
36,000 self-service
queries per day
35% reduction in
calls to Customer
Care center
Eliminated ODS

26. Case 4: Tesco Link
Objective
Leverage
Suppliers
knowledge on
categories
26 2/18/2014
Analysis & Actions
•
•
•
Give Suppliers entrance to Tesco
data
Sharing detailed information on
sales data
Not only viewing but also
Downloading data
Enabling a Demand Driven Supply Chain (DDSC)
Real Time Insight
Result
• Lean backoffice
• One consistent way of
working

27. Case 5: Transportation Optimization
Objective
optimize
Freight loads
over the
different
Grocery retail
chains in order
to have a
profitable own
Fleet
27 2/18/2014
Analysis & Actions
•
•
•
Started with defining best KPI‟s
Making right choice between
internal fleet and Contractors
Create best route based on costs,
and service levels
Enabling a Demand Driven Supply Chain (DDSC)
Detailed Cost
Analysis
Result
•
Own Application
gives insight in break
even point and when
to choose which
transport

28. AGENDA
Supply Chain
Management
28 2/18/2014
SCM Solutions
Category Management supported by Detailed(DDSC)
Enabling a Demand Driven Supply Chain data
Customer
Cases

29. QUESTIONS?
29 2/18/2014
Category Management supported by Detailed(DDSC)
Enabling a Demand Driven Supply Chain data

30. THANKS YOU FOR
QUESTIONS?
ATTENTION
Frank Vullers
Senior Industry Consultant Retail
Teradata EMEA
Frank.Vullers@Teradata.com
https://twitter.com/FrankVullers
30 2/18/2014
Category Management supported by Detailed(DDSC)
Enabling a Demand Driven Supply Chain data