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Scott Craig - Delhaize America Mark Lyktey and Jason Gintert - PepsiCo Warehouse Delivered January 2012 Improve Store In-Stock Rates Reduce Supply Chain.

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Presentation on theme: "Scott Craig - Delhaize America Mark Lyktey and Jason Gintert - PepsiCo Warehouse Delivered January 2012 Improve Store In-Stock Rates Reduce Supply Chain."— Presentation transcript:

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2 Scott Craig - Delhaize America Mark Lyktey and Jason Gintert - PepsiCo Warehouse Delivered January 2012 Improve Store In-Stock Rates Reduce Supply Chain Costs Reduce Overall Inventory Customer Demand Driven Replenishment

3 Agenda Supply Chain Big Bets Case Study Defined POS Impact Store Inventory Impact Customer Demand Driven Replenishment Q2 Inventory Tracking Year on Year Inventory Tracking What’s Next

4 4 Supply Chain Big Bets Customer Demand Driven Replenishment  Business Benefits (Source: Retail Solutions, Inc)  12% To 27% Lower DC Inventory  21% To 77% Decrease In DC Out Of Stocks  20% Decrease In Store Level Out Of Stocks  Delhaize Piloted Program With Another CPG Vendor  Forecast Accuracy Improved By 30%  Met Or Exceeded All Goals  Estimated Inventory Reduction 30%  Predecessor - Rapid Replenishment  Upside Includes Increases In Stock, Reduces Reclaim, Etc.

5 Agenda Supply Chain Big Bets Case Study Defined POS Impact Store Inventory Impact Customer Demand Driven Replenishment Q2 Inventory Tracking Year on Year Inventory Tracking

6 Case Study Defined Pepsi Plant Pepsi DC Food Lion Store Vendor Managed Inventory (VMI) Food Lion Warehouse What is standard VMI: Reduce Supply Chain Costs by 0.5% Increase Store In- Stock Rates by 0.75% Decrease Food Lion overall Inventory by 5% VMI Pilot Goals - Penetrate to Store Pilot Upstream Supply Chain

7 Agenda Supply Chain Big Bets Case Study Defined POS Impact Store Inventory Impact Customer Demand Driven Replenishment Q2 Inventory Tracking Year on Year Inventory Tracking What’s Next

8 POS Impact Pepsi DC Food Lion Store Customer Replenishment Planning Food Lion Warehouse POS identifies trends 3 days faster Pilot POS accelerates customer demand visibility to the manufacturer Able to react within the promotional period Provides a better more accurate demand signal that can be leveraged through the Supply Chain Store to DC every 2 to 4 daysDC to DC 1 day Headlines:

9 POS Promotional Sales Growth Day 1 50% Day: Planned Delivery Actual Delivery Day 4 Day 7 Day 10 Day 13 Day 16 Day 19 Total 30% 20% In Stock Efficiency Event POS Overselling Headlines: Sales Growth through higher in-stock Customer Demand Driven Replenishment based of POS POS data yields information to support decisions 100% 110% 111% +10% Net Gain: Promotional Event Oversell

10 POS Inventory Efficiency Inventory Efficiency Promotional Event Undersell Headlines: POS data yields information to support decisions Inventory Efficiency Fewer Returns/Expired Day 1 50% Day: Planned Delivery Actual Delivery Day 4 Day 7 Day 10 Day 13 Day 16 Day 19 Total 30%20% 15% Event POS Undersell 100% 70% 57% 5%

11 Agenda Supply Chain Big Bets Case Study Defined POS Impact Store Inventory Impact Customer Demand Driven Replenishment Q2 Inventory Tracking Year on Year Inventory Tracking What’s Next

12 Store Inventory Effect Pepsi DC Food Lion Store Customer Replenishment Planning Food Lion Warehouse Pilot X Days total network Y Days Warehouse Goal X - 2 days Y - 2 days VMI Traditional VMI shipped promo + 2 Ship X + 2 daysY - 2 daysZ + 4 days Pilot

13 Agenda Supply Chain Big Bets Case Study Defined POS Impact Store Inventory Impact Customer Demand Driven Replenishment Q2 Inventory Tracking Year on Year Inventory Tracking What’s Next

14 Customer Demand Driven Replenishment Pre-Pilot Conventional VMI Pilot Data Enhanced VMI DC Inventory Forecast Safety Stock Headlines : DC Inventory Forecast Safety Stock POS Store Inventory DC Warehouse Withdrawals DC Warehouse Withdrawals Customer Demand Driven Replenishment (CDDR) DC Customer Replenishment Sales Growth Inventory Efficiency Enhance replenishment Enhance promo forecast Pilot Goals

15 Agenda Supply Chain Big Bets Case Study Defined POS Impact Store Inventory Impact Customer Demand Driven Replenishment Q2 Inventory Tracking Year on Year Inventory Tracking What’s Next

16 Q2 Inventory Tracking Q2 Distribution Center Inventory Reduction 32.24% April May June

17 Agenda Supply Chain Big Bets Case Study Defined POS Impact Store Inventory Impact Customer Demand Driven Replenishment Q2 Inventory Tracking Year on Year Inventory Tracking What’s Next

18 2010 vs. 2011 Results by Period Store In Stock Point of Sale 2.05% 20.9%

19 2010 vs. 2011 Results by Period Reclaim DC on Hand 15.5% 0.5%

20 Agenda Supply Chain Big Bets Case Study Defined POS Impact Store Inventory Impact Customer Demand Driven Replenishment Q2 Inventory Tracking Year on Year Inventory Tracking What’s Next

21 Collaboration Blue Printing Proof of Concept Automation Expansion Q1 2011 Brainstorm VMI Enhancements Manufacturer/Retailer jointly devise strategy Q1 2012 Apply automation & enable EDI 830 Enhance Processes Perfect on Food Lion Gatorade lanes Q2, Q3 & Q4 2011 Manually perform Customer Demand Driven Replenishment Enhance Processes Measure & Publish Results Q2 2012 Expand automated processes Roll Out to all Delhaize lanes Measure & Publish Results Demand Intelligence Jointly Grow Sales Improve Inventory Utilization Increase Collaboration Anticipate Customer Demand Build Efficiencies Goals


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