“product design to delivery”

V.2.2200809

operational excellence through integration

retail & sales planningmethodology overview

team composition

a team of industry professional with relevant hands-on experiences on the market

marketsMade in Italy Luxury Goods Automotive

lines

Customer eXperience Mgmt

Supply Chain Mgmt

Business Intelligence

Retail Management

our mission

increase our client’s performances

implementing

tools, methodologies,

services, and expertise

to increase customer loyalty and

to streamline sales & logistic activities.

productdesign

supplychainmgmt

retailoperation

CRMbusiness

intelligence

what we doncrease efficiency and streamline activities of

“design to deliver”

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

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

our methodology

supply chain managemento

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business objectives

maximise shopping

eXperience

service / volume

• increase POS sales forecastingdemand and a better execution ofassortment/castegorymanagement

• increase new products sales duringlaunch and post-launch period

• increase sales orders fill-rate and respect of promised delivery date

• make a more reliable forecast ofdemand through the usage ofadvanced BI toolsi

organizaton / operations

• increase flexibility and readiness of entiredesign to delivery process

• roles and responsiblities re-alignement

• re-fucus each resource on its corecompetences

inventory / financials

• reduce new products stock-out during early months of sales

• increase stock turnover controllingand optimize inventory over the entire supply chain

• sustain company growth with no or minimum increase of inventory

• obsolete management

lines of action

As Is

organizationrealignment

POS segmentation

productassortment

budgeting & forecasting

streamlineoperations

negative signals

productassortment

weak control ofassortment

• brand,

• area / country,

• shop / pos

no product stock-out analysis

loosely definedprocesses & procedures

• no periodic assessment ofassortment,

• new shops opening,

• new products launch

purchasing

purchase orders drivenby personal taste / gutt

feeling

• little or no usage of BI info,

• stock turnover objectivesset at category level

stock turnover set byfinancial objectives notby customer experience

expectations

low POs’ fill-rate and respect of delivery dates

production

sales forecast by sku

• no unfullfilled demandanalysis at POS

• unsctrucured awereness ofnew opening plans and seasonality at POS

new products

• little or no alignment withsales & mktg

• understimation of productneeds to sustaindistribuition network growth

• production capacity limitssales forecast

sales & marketing

sales forecast bybusiness unit

• country / sales channell

• breakdown by productcategory using past salesdata only

inventory level forecast

• by product category only

• underestimate seasonalityand new products launch

new products salesforecast

• underestimatecannibalization

indicated actions

production

procurement plan

• strategic raw materials

• components and WIP management

engineering of newproducts

• increase reusability ofexisting components

actual production

• keep promised quantities & delivery dates

• increase flexibility

• postponement

• control product quality

sales & marketing

(corp.)

segmentation & assortment

• products

• pos

new products

• creative briefing

• launch strategies

• distribution strategies on different sales channels

sales forecastconsolidation

sales & marketing

(local)

sales data quality

• correctdness

• timeliness

project management

• promotion

• new shop / pos opening

demand forecast

• capture unfilfilled demandat shop / pos

• BI tools

• sales forecast at macro level

logistics

safety level definitions

• central warehouse

• area warehouse

• shop warehouse

global and localdistribution plan

BI competence center

sustain and championchange

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”

segment product assortment

product assortment grid

Bracelets / Retail price: 1,000 – 5,000€

Steel Steel-Gold Gold-Steel Gold

Plain Sku1Sku5Sku6

Sku2Sku7

Sku3Sku8Sku9

Sku4Sku10

Semiprecious Sku11 Sku12Sku13

Sku14Sku15

Sku17Sku18

Semiprec.-Prec. Sku20 Sku22Sku23

Sku24Sku25Sku26

Preciuos Sku27Sku28Sku29

Sku30Sku31Sku32

Diamonds Sku33 Sku34 Sku35 Sku36Sku37Sku38

Rubies Sku39Sku40

Emeralds Sku41

Zaffires Sku42

4. sales meetings and sell-in orders– first update to purchasing and

replenishment plan

5. merchandise delivery to shopsand POS

6. early sales analisys

7. second update to purchasing and replenishment plan

1. product brief– agreed with sales / mktg / production

– expected retail price band

2. collaborative forecasting– consensus based

• corporate• areas / sales channels managers• marketing corporate & local• production• logistics

– impact on existing products

3. distribution plan– expected service levels safety stocks levels– purchasing and replenishment plans

new products launch process

stand-alone shared

unstructured structured

reactive / late proactive / planned

As Is To Be

BU # 1 on street shop in shop shopping mall airport

flagship full

level 1 full high1

level 2 full high2 high2

level 3 high2 full

BU # 2 on street shop in shop shopping mall airport

flagship full

level 1 full high1

level 2 high1 high2 high2

level 3 high2 high1

shop and POS segmentation

shop segmentation

strategic & brand image building

flagship

level 1

level 2

level 3

location

on street

shop in shop

shopping mall

travel retail outlet

BU # 3 on street shop in shop shopping mall airport

flagship full

level 1 high1 high2

level 2 high2 low1 low2

level 3 low3 low3

marketing

forecasting cycle (top down approach)

distribution plandelivery plan by warehouse by sku by month

acquistipurchase plan by month by sku

sales forecast approvalgroup-wide sales forecast

definition of inventory levelssafety stock levels by area / shop by month by sku

agreement on sales forecastupdates/changes at assortment cell level

sales forecast by skumonthly forecast by shop / sales channel by sku

sales forecastby quarter by product category

sales /

mktg

CEO

logistics

responsible

anticipate customer demandsafety stock levels defined taking into consideration producttypology 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

month 1 month 3 month 4 month 11month 10month 5 month 7 month 9month 6 month 8 month 12month2

delivery plan

0% 20% 50% trendflexibility band

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 entiresupply chain if needed

• anticipate shop and product seasonality

delivery plansales

forecast

safety stock levels

definition

purchasingplan

product on shekves

saleinventory

gaps

changes todelivery

plan

replenishment frequency: based on sales forecast and distribution network

key performance indicators

re-orders

budget

forecast update

sales

Production

inventory levels

central

area

shop / POS

re-routing

central warehouse

area warehouse

area warehouse

shop

delays

production

central warehouse

area warehouse

new productlaunches

obsolete

outlet

auctions

e-commerce

reverse logistic

intraarea

interarea

sales forecast variances vs. actual sales

expected vs. actual operation activities and costs

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.

thank you

Ing. Fabio O. BernardiniManaging Partner

mobile +39 3383497750

office +39 0683398345

email: fabio.bernardini@e-xperience.it

founder of “Made in Italy & Luxury Goods” social network