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GMA/FPA MERCHANDISING,SALES AND MARKETING CONFERENCE Downstream Data Crafting the Business Case for Account Management Analytics Marc Brown, Del Monte Shawn Dolley, Vision Chain Sue Simonett, General Mills

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GMA/FPA MERCHANDISING,SALES AND MARKETING CONFERENCE

Downstream Data

Crafting the Business Case for Account Management Analytics

Marc Brown, Del MonteShawn Dolley, Vision ChainSue Simonett, General Mills

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Topics

1. Availability of downstream retailer data

2. How companies use this data for value

3. Dynamics & restrictions working with data

4. Del Monte’s Downstream Initiative

5. General Mills’ Downstream Initiative

6. Vision Chain’s Downstream Solution

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What’s new about ‘downstream data’

Data availability is high, not just Wal-MartChallenge is knowing how to use it

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Just a sample of retailers giving data

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Value using data in old & new ways

SalesRetailer-mandated reportingCategory & Account mgmt

Supply Chain‘Demand Driven Supply Network’POS-driven Forecasting

OtherProject-specificIntegration with new product marketing, production plants

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The ‘Tree’ of Demand Data to Workstreams

Wal-Mart

Safeway

Food LionTarget

Hannaford

EDI 852

Loblaw’sAC Nielsen

Costco

Pet Retailers

KrogerIRI

Supervalu

The Pinch Point

Supply Chain

Sales & Marketing

Inventory Optimization

Sales & Operations Planning

Vendor Managed Inventory

Handhelds & Store Service

Category Management

Assortment Optimization

Promo Optimization

Trade Promotions

Plant Management

Functional Business Processes

Demand Data

Demand Planning

Deduction Mgmt

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Dynamics of working with retailers

Using downstream data is “Retailers partnering with select suppliers to drive shelf availability and reduce landed cost.”

Focus of a retailer’s initiative is dependent on their internal capabilities.

Retailers have standard templates, and they want you to use them.

The more recommendations and help you give them, the more leadership in the category and flexibility they will give you.

This is not ‘culturally comfortable’ for the retailer. This space used to be off-limits to suppliers.

Data quality remains an issue.

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Restrictions on the Data

Security and/or confidentiality rules applied by retailers:

All retailers have explicit or implicit data restrictions. These differ by retailer.

Some retailers will provide competitor data within a category, for the supplier to provide ‘value-add’ to the category as a whole. No sharing competitor data internally within the supplier.

No sharing data with 3rd parties

No merging data with other retailer data to find opportunities for other retailers

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Del Monte Foods Profile

$3.4B Producer, Distributor & Marketer of premium quality, branded food and pet products for the U.S retail market

4,000+ Products20 Factories9 Distribution Centers

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Del Monte Foods Transformation

Our goal is to create a sourcing and supply chain structure that will provide greater flexibility compared to a more traditional fixed-asset focused business.

Launched a variety of initiatives in 2006 focused on strengthening systems and processes, and streamlining the organization

Supply chain efficiencies to improve order management, supply chain planning, execution and inventory reduction capabilities.Lower delivered costsStreamlined organizationEnhanced and integrated Trade Fund Management capabilities

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Del Monte Foods Transformation

Del Monte Plants Wal-Mart DC’s

Wal-Mart StoresSam’s Club

Del Monte DC’s

Co-packers

Re-packers

Major Grocery Retail VMI/CRP Customer DCs

Major Grocery Retail Customer Store Level

Demand Driven Distribution

Suppliers

1

2

4

5

3

Store LevelDemand SignalsWhen Available

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Targeted Value to Retailers

Lower Safety Stocks at the RDCs resulting in higher turns

Improved GMROI

Increased Sales through higher store in-stock positions

Lower Supply Variability throughReduced Lead time variability

Improved RAD performance

Improved Order fill rates

Improved Visibility to Inbound Deliveries

Improved DC labor planning

Enhanced VMI/CMI capability

Last minute supply/demand match at all levels including to the store

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Targeted Value to Del Monte

Improve Del Monte’s ROIC by:Reducing Finished Goods Inventory and Safety Stock and increasing inventory turnsLowering Raw Material and Packaging InventoriesReducing Demand variabilityEnabling flexibility in the Physical Distribution Network design

Increase Sales and Operating Profits by:Improving Retail store in-stock positions to 99.5%+; reduce lost salesMeet and exceed customer service requirements

Lower Operating Expenses related to Distribution & Logistics costs by:Improving transportation mode selectionsReducing expedite charges and intra-company inventory balancing transfersReducing customer fines for late deliveries and detention chargesEliminating and automating many manual and administrative processes

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Del Monte Activities Channel

Access Method Time Location Product

POS Sales POS Qty

Avg Price

Unit Cost

On Hand Inventory

On Order Inventory

In Stock %

Mark up / Mark Down amt

DC Ships

FCST Qty

Assort Ind

Retailer A Club Portal / AS2 Day Club SKU

Retailer B Drug Portal Day Store SKURetailer C Drug Portal Week Store SKU

Retailer D Grocery EDI Day Store SKURetailer E Grocery FTP Week Store SKURetailer F Grocery Manual Day Store SKURetailer G Grocery EDI Day Store SKURetailer H Grocery EDI Week Store SKURetailer I Grocery FTP Day Store SKURetailer J Grocery EDI Week Store SKU

Retailer K Mass Merch Custom Week Store SKURetailer L Mass Merch Portal Day Store SKURetailer M Mass Merch Portal / AS2 Day Store SKURetailer N Mass Merch EDI Week Store SKURetailer O Mass Merch Portal / AS2 Day Store SKU

Retailer P Specialty EDI Week Store SKURetailer Q Specialty EDI Week Store SKU

In DialogIntegrated

Data Granularity Key MeasuresTrading Partner Sampling

Trading Partner Sampling

• Retailers continue to expand coverage of “shared” information. • Granularity continues to penetrate deeper within Retailer’s supply chain• Latency of information continues to shrink

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General Mills Overview

$13.4 billion FY07 net sales*6th largest food companyMarket in over 100 countries25+ categories - 3 temperature states Typical US grocery = 650+ SKUs

*Includes Proportionate share of JV sales

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Trends Leading To a Demand Signal Repository

Last 10 years:• Consolidation in Industry suppliers & retailers

• Retailers pulling out of syndicated data sources

• Growing trust and partnership between suppliers / retailers

• Increase in retailer capabilities & willingness to share data

• Increase in supplier capabilities & willingness to receive data

• Significant decline in data storage expense

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Utilization of DSR

2002 2007 2009 +Sales and category analytics

Demand sensing inputs into supply chain decisions/systems

2005

Weekly/daily, historical analysis, minimal integration, complex metrics, analytical focus

Daily / intra-day, highly integrated, basic measures, execution focus

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Strategy – “Customer Direct Data” / DSR

General Mills Strategy:• Invest to Learn / Leverage

• Push where benefits are clear

• Focus on key customers

• Prioritize by willingness and capabilities to share data

• Immediately leverage in downstream - design to leveraged upstream

• Sales owns repository and relationship with retailers

• IT is primary support for repository and reporting application

• Collaboration across multiple organizations

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Multiple Organizations, Strategies, Requirements

Consumer Food

Sales

Customer

ServiceRegion Sales Teams

Supply Chain

Consumer

InsightsMarketing

Leads to duplicative storage and processes

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Achieve Balance With DSR Strategy

Customer data brought into single repository with output delivered to various organizations

Consumer Food Sales

Customer

ServiceRegion Sales Teams

Supply Chain

Consumer

Insights

Marketing

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Customers Identified in DSR Strategy

• Targeting >60% of US business, 45% of Canada business

• Measured / steady approach

Customer Status Customer Involvement

Customer Capabilities

Acquisition Method

Scalable Process Time Frequency Geographies

A Live High High Portal/AS2 Yes Day Daily / Weekly Store / Warehouse

B Live High High Portal/AS2 Yes Week Weekly Store / Warehouse

C Live High High Portal/AS2 Yes Day Weekly Store / Warehouse

D Live High High AS2 Yes Day Day Store / Warehouse

E Partial / Not Leveraging Low Low Portal/AS2 No Week Weekly Chain / Store

F In Discussions High Medium Portal/FTP Yes Day Daily/Weekly Store / Warehouse

G In Discussions High Medium AS2/FTP Yes Week Weekly Store / Warehouse

H Pending - - - - - -I Pending - - - - - -J Pending - - - - - -K Pending - - - - - -L Pending - - - - - -M Pending - - - - - -N Pending - - - - - -O Pending - - - - - -

Data GranularityCustomer Profile

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Learnings To-Date

Data acquisition process is time consuming

• Managing receipt, loading and validation of data is difficult

• Large data volumes, No set time for data transmission, etc…

Requires significant flexibility across various retailers

• Varying hierarchies, metrics, etc…

• No standards

• Internal requirements vary by organization

Need dedicated resource commitment with specialized skills

• Requires intimate knowledge of data by customer

• Business and technical skills required

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Vision Chain Blue Chip Customers

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Who is Vision Chain?

The Industry Standard for DSRSAP’s Chosen VendorSoftware company, founded 1999Based in Washington DCConsumer Product, High TechHarmonizes transactions from retailersEnterprise on-premise software using retailer-provided demand data

#1 in market share in our space