Collaboration in supply chain Time to focus on the customer
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1 Collaboration in supply chain Time to focus on the customer Anne-Mari Paapio, Suomen Lähikauppa Tuomas Brunou, Tuko Logistics
2 Suomen Lähikauppa The only major grocery store operator in Finland with focus on local stores 626 stores, two nationwide chains: 502 Siwas 124 Valintatalos Turnover 999,2 million Personnel 3900 Owned by private equity investment firm Triton 39 % ownership stake of Tuko Logistics
3 We want to be the best neighborhood store in Finland 626 stores Nationwide store network Strong presence in larger cities 30% market share in segment
4 Tuko Logistics in a nutshell Turnover 760 million Personnel 540 Cooperative owned by Wihuri Aarnio Suomen Lähikauppa Stockmann Heinon Tukku Growing Total assortment of SKUs Strong brands Fruits & vegetables, dry food, non-food, tobacco, alcohol Key mission is to be a strategic supply chain partner for grocery trade
5 Operating environment in key figures 626 stores Total of 3900 employees SKUs per store 150+ stores are open 365 days a year order rows On average 3,5 delivery days per week 7 days a week 325 trucks per day 5000 POS 1600 suppliers
6 WHY WOULD A GROCERY RETAILER OUTSOURCE replenishment planning?
7 Relex has shifted the focus of Lähikauppa's store managers from replenishment to customer service 7
8 Tuko built a forecasting cluster creating added value for owners, suppliers and in-house operations
9 Collaborative planning for visibility & focus Stores Suomen Lähikauppa Tuko Logistics Suppliers Collaborative planning throught the whole value chain Focus on customer Improving product availability Fresh items with better best before dates Effective assortment management Improved customer experience Centralized management and quality of execution Improved support for campaign planning and execution Focused working hours at stores Transparency throughout network Stabilizing availability 360 visibility Cost efffective purchasing and handling process Optimizing stock values Overall planning, e.g. Capacity Workforce Synergy benefits Purchasing forecast on a daily level Effective assortment management Improved campaign volume planning Production planning Scheduling Finetuning Better ability to react to changes
10 SO HOW IS THIS DONE in practice?
11 Process overview of how replenishment collaboration works Supporting S&OP Process Demand Trends Item classifications Store network details Sales negotion results All item categories Masterdata Picking and Delivery Demand Forecasting and MRP The planning process is running 6 days a week Order Proposal Calculation Exception Mgmt POS Intelligence Product Shelf Life Assortment decisions Opening hours Daily sales profiles Delivery schedules E-S&OP Weather forecasts Ordering Feedback from Category mgr.
12 Roles and responsibilities Stores Suomen Lähikauppa Tuko Logistics Suppliers Open communication and trust Serving customers Monitoring stock balances Informing about exceptions, like local events Offering feedback Define guidelines and limitations Assortment decisions Campaign definitions Quality evaluation Operational execution Calculate forecasts Monitor order proposal quality Exceptions management Replenishment quality Customer negotiations Provide their views regarding limitations and expectations Capacity planning and production Freshness and availability
13 Factors affecting successful replenishment Key success factors Trust Focus on exceptions & changes Utilizing synergy benefits Open discussion between parties Clear vision and goals Limitations to be removed Highly complex supply chain Understanding the entity Planning horizon Planning versus reaction Comparison of total costs Hierarchy differences
14 Collaboration roadmap Integration Between Co- Op Members Supplier Integration Examples Waste -10,8% Avarage addition to BBD +2 Discounts -6,8% Stock value -5% Sales out +42,6% Replesnishment Process All levels of collaboration are aiming towards the target of happier and more committed customers
15 Thank you! 15
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