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May,               2010




                                                                           Cooperation and
                                                                           Collaboration
                                                                           The discipline of logistics has evolved over time,
                                                                           with several domains coming together to produce
                                                                           a holistic method on managing important
                                                                           operational aspects of each company. From the
                                                                           very beginning transportation was recognized as
                                                                           a key to the development of an industrial region
                                                                           and in the case of the United States, the
                                                                           establishment of the states from territories. The
                                                                           value of warehousing became obvious as
                                                                           companies began to develop plans to produce to
                                                                           a forecast and to locate products based on their
                                                                           economic model.

                                                                           Transportation and warehousing came together
                                                                           and was called physical distribution, with
                                                                           ancillary functions such as forecasting, customer
                                                                           service, order entry, inventory management
                                                                           finding a home within a company, with none
                                                                           being considered to be essential to the success of
                                                                           the company.

                                                                           Thought leaders in academia and business came
                                                                           to realize that by bringing all these disciplines
                                                                           together companies can be more effective and
                                                                           efficient. Subsequently other functions were
                                                                           added, such as forecasting, materials
                                                                           procurement, operations planning, distribution
                                                                           requirements planning and materials
                                                                           requirements under the same management
                                                                           mantel, which they called supply chain
                                                                           management.

                                                                           Change Management
                                                                           Suffice it to say this area of expertise evolved as
                                                                           did other functional areas, while recognizing that
    http://www.ups.com/bussol?loc=en_US&viewID=metaCategoryView&contentI
    D=ct1_solg_met_industry&WT.svl=PNRO_L1                                 it was important to be successful, organizations
                                                                           had to avoid becoming paralyzed in functional
                                                                           silos. Thus collaborative planning forecasting and
                                                                           replenishment roared on the scene in the mid
                                                                           90’s with one major company demonstrating
                                                                           significant value in increased sales, improved
                                                                           customer service and improved inventory
                                                                           management.




                                                                                                                             TM
The Voice of VICS –                                        1 of 9                     Don’t wait to be great… Collaborate!
-
 The VICS Monthly Newsletter
Joe’s Corner (Continued)

The point is that to be successful, companies had to              normal process of establishing organizational,
decide upon the approach they would use to remain                 process and technological strengths and
relevant and successful in turbulent times. They had              weaknesses. Cross functional means that each
to decide upon the metrics they would use to                      entity completes a company self assessment.
measure their performance on one hand and the                     The teams come together to determine
service being provided to their trading partners on               company strengths and weaknesses. The next
the other.                                                        step is to determine which trading partners
                                                                  should be named as strategic accounts.
The sum and substance has to do with speed to                •    After the self assessment, a plan to exploit the
market, visibility and the ability to accurately                  company strengths and to improve upon the
forecast sales at various points along the supply                 weaknesses.
chain. This is no easy task, especially if companies         •    Agreeing on metrics with key trading partners
have become engrained in a silo mentality, internally             is really important to success. By arriving at
or with their trading partners and service providers.             industry acceptable metrics the disputes
                                                                  concerning service levels are mitigated.
What has been learned over the years is that the
major challenge to implementation is change                 It’s of critical importance to understand that a
management. Technology and business processes               foundation that has to be established to provide the
are quite capable of making the necessary                   company with the resources to complete in a
accommodations that must be made to follow a plan           complex market place, from sourcing to
to out distance competition. However the other key          sustainability, as effectively and efficiently as
enablers are trust and transformation.                      possible. This can only be accomplished if the entire
                                                            organization is committed to education and the
If trust does not exist internally, or externally, the      willingness to work toward being the best possible.
prospect of sharing information is practically
impossible. If a company has a strategy of leading          Collaborative Business Model
their competitor set with, i.e. speed to market or          A company who has followed these principles is
increasing customer and consumer satisfaction, they         Lowe’s. Lowe’s is a US based retail company who has
will not be successful by working in a vacuum.              over 1,700 home improvement and appliance stores
                                                            in the United States and Canada and is serving more
Getting the Basics Right                                    than 14 million customers a week. The company is
There is a continuum, a process that has to be              ranked 47 on the FORTUNE 500 list. Lowe’s had a lot
understood for companies to out distance their              of success following the above mentioned principles.
competitors and to exceed their customers’                  Keep in mind that companies will determine what
expectations.                                               works for them and that there is no set formula.
 •   Senior Leadership understanding and support.           Here are some quotes from a recent joint
     Without the support of senior leadership it is         presentation Lowe’s made with Black and Decker, a
     difficult if not impossible to affect change.          major supplier of tools and accessories.
     Based on countless case studies it has been             •    ―We’re working as a team to achieve common
     determined that customarily a mid level                      goals‖.
     manager becomes enamored with a particular              •    ―Data helps us react properly-instead of
     program and develops a constituency that                     guessing‖.
     assists in convincing senior management to              •    ―Data gave us a common language to work
     pick up the baton.                                           together without the emotion‖.
 •   Trust needs to be established by adopting               •    ―This has allowed us to effectively manage their
     guiding principles; for example, every company               business with no roadblocks‖.
     entity is treated like the best customer, every         •    ―We have a better understanding of what
     request for information is immediately                       questions to ask‖.
     responded to by the involved party and that             •    ―We’re planning on based on facts… not
     due dates are met.                                           assumptions‖.
 •   The principles of transformation need to be
     understood, i.e. how to move from a stoic              The results included an improved forecast which,
     organization to one that is responsive and             increased store sales, reduced inventory, avoided out
     trusting, is an art that needs to be understood        of stocks and improved customer satisfaction. One
     and adopted.                                           of the most salient comments made was ―prior to
 •   Every organization has to understand the               moving to a collaborative business model, there was
     barriers that are encountered by the natural           tension in the air each time we met to discuss the
     reaction to change. Regardless of the                  business. Now we are working as a team and the
     magnitude of the change, if individuals feel           tension has evaporated‖.
     their normal routine or secure position is
     threatened, they will be resistant. Therefore          Black & Decker saw additional benefits. They were
     the steps required to effect change must be            able to resolve issues quickly, they could control and
     understood.                                            prevent issues from arising, they drove ownership
 •   Cross functional self assessment needs to be           with each customer team, they gained credibility
     understood and become integrated into the




                                                                                                                           TM
The Voice of VICS –                                      2 of 9                     Don’t wait to be great… Collaborate!
-
 The VICS Monthly Newsletter
Joe’s Corner (Continued)
                                                           Given a relatively short season for sales, there was
with their manufacturing group and they were able          no time to recover and consequently dramatic steps
to support Lowe’s more efficiently.                        had to be taken. The primary step was to organize
                                                           and collaborate internally, obtain the appropriate
It’s easy to see that this was a complete win / win,       software and align with their suppliers. The rest is a
fostered by a thoughtful approach to collaboration.        very successful history of a great turnaround.

West Marine, the largest supplier of boating               Co-operation and Collaboration
equipment and supplies, with $1B in sales, greater         It is obvious that what has been discussed in this
that 15% market share and growing at a rate of 40          paper has been the essence of bringing together the
stores per year, embarked on a collaborative               benefits derived from effective marketing with
program 4 years ago. It was a thoughtful process,          excellent execution of logistics. Marketing is a very
beginning with 20 suppliers and has since grown to         comprehensive functional area that includes
over 200. Their primary goals going in were to             forecasting, pricing, promotional activities and
achieve 90% on time shipping, greater than 96% in          customer satisfaction. As pointed out several times,
stock in every store and forecast accuracy greater         no functional area and especially marketing can
that 85%.                                                  operate in a silo environment.

The results that West Marine enjoyed included              Logistics is the mission critical functional area that
    •   $23M drop in DC –Logistics expense over 4          requires the cooperation and collaboration of the
        years                                              marketing function to be able to deliver on the
    •   In stock greater that 96%                          company’s commitment to its customers. Marketing
    •   On time shipments improved from 30% to             has to be aware of the benefit the logistics
        80%                                                department can deliver that allows the company to
    •   Inventory reduced $30 million                      meet its goals and objectives.
    •   Supplier focus on customer sales
    •   Cross-functional problem-solving                   Marketing and logistics are inextricably linked in
    •   Holistic solutions take all stakeholders into      delivering on the promises that companies make to
        account                                            their constituents, share holders, stake holders and
                                                           customers. Providing the organizational structure
The move to a collaborative business model played a        and compensation program to incent collaboration is
key role in keeping West Marine from going                 the responsibility of senior management. Companies
bankrupt. Store sales suffered badly after two             with forward thinking management are sure to be
acquisitions, primarily because the company could          successful.◊
not keep products in stock that were in demand.
                                                           All the very best, Joe




 Walmart Requires Supplier Efficiency
                                       In a recent         Li & Fung, must make sure that their merchandise
                                       article from        does not arrive too late, too early, or with the wrong
                                       WalmartHELP         quantity of product, and failure to do so results in
entitled Must Arrive by Date Compliance, Walmart           the supplier paying a fee of 3% of the cost of goods.
delves into its new must arrive by date requirements       As a global leader in supply chain efficiency,
for its suppliers. Innovating, living by, and growing      Walmart’s must arrive by date requirements only
from its notorious save money, live better model           further boost effectiveness in the supply line,
Walmart recognizes that suppliers choose to use the        inventory or overstock costs, and responsiveness to
cheapest transportation to get goods from Point A to       customer demand.
Point B. This poses as a problem concerning
compliance with the new must arrive by date                These requirements were implemented in January,
requirements and introduces the possible need for          but Walmart was found itself late in charging out-of-
change in the transportation model.                        compliance fees for merchandise that arrived at the
                                                           wrong time or with the wrong quantity. Target and
The article from May 13, 2010 explores the new             Home Depot have been using this date compliance
policy that suppliers must get their merchandise to a      policy with its suppliers for some time now, and have
distribution center or store within a pre-determined       seen much success with it.
time frame, or suffer the penalty of paying a fee.
Walmart suppliers, such as Procter and Gamble and          The must arrive by date requirements include:
 •




                                                                                                                           TM
The Voice of VICS –                                     3 of 9                      Don’t wait to be great… Collaborate!
-
 The VICS Monthly Newsletter
Walmart Help (Continued)

 •   A four-day arrival compliance window meaning            items, and small packages and products for Sam’s
     no more than three days prior to the day the            Club are currently exempt from the fees. The article
     merchandise is due to the merchandise center,           shares that Walmart also offers exemptions for
     but not one day later than that due date.               suppliers who pay for their own freight in less than
 •   The merchandise cases received within the               truckload shipments, but that will eventually change.
     must arrive by date delivery must be more               Also, if suppliers cancel purchase orders prior to the
     than 90% of the merchandise ordered.                    must arrive by date, late or early arrivals are not
                                                             held against them.
High Impact Analytics is an example of one company
that works with manufacturing suppliers who                  It is also stated that
transport goods to Walmart and Sam’s Club. This              manufacturers who ship
company helps to improve planning methods of the             goods with truckload carriers,
suppliers and helps them estimate proper lead times          as opposed to less-than-
to provide Walmart with their required products in           truckload carriers have a
the allotted arrival window.                                 much easier time complying
                                                             with the rules because their
The goal of implementing this incentive for suppliers        trucks only deliver to one
to deliver goods on time is to cut costs, and                location. Less-than-truckload carriers combine
therefore provide goods for less to Walmart                  shipments from multiple customers into one trailer
customers. The article expresses that stores are no          and therefore have multiple deliveries. These carriers
longer acting as warehouses, with an overabundance           face the inevitable and inconvenient issue of
of inventory in stock rooms or in trailers behind            inconsistency. This is because their goods go through
stores. Instead, Walmart’s ultimate goal is for just in      freight consolidators, with sometimes large numbers
time arrival of merchandise in stores. This will allow       of variable days. In addition, some goods are
Walmart to restock shelves and serve customers in a          delivered by rail, which can be very inconsistent.
cost-effective, more efficient manner.
                                                             Tracking compliance for suppliers is not a difficult
The arrival date requirements and minimizing of              task, but if there is a problem following the
inventory follows Walmart’s current initiative to            compliance rules, resolving this problem can be a
reduce the number of shelves and clear the center            struggle. As the article states, a supplier may have
aisles of clutter. As part of the Project Impact             to evaluate the entire supply chain if compliance with
initiative, Walmart aims to remodel stores to make           must arrive by dates doesn’t improve after changes
them appear cleaner and create easier to shop traffic        in lead time estimates have been implemented.
patterns within Supercenters nationwide.                     Prepaid suppliers must evaluate their current freight
                                                             carriers and possibly make changes in order to
                                                             ensure that they are shipping on time and with the
                                                             right quantity.

                                                             It is important to realize also that Walmart does not
                                                             penalize each order that is out of compliance with
                                                             the must arrive by date. The compliance average is
                                                             taken for the entire month and if at least 90 percent
                                                             of the merchandise complies with the must arrive by
                                                             window in that month, then the supplier is not
                                                             subject to fees. So, one order in a month might
                                                             arrive late or with only
Neighborhood Market in Bentonville — the first               85% of the ordered
Neighborhood Market and built only 11 years ago —            product for that specific
is getting a makeover. Walmart plans to:                     purchase order, but if
                                                             that is the only out of
                                                             compliance purchase
 •   Spend about $1.2 million to enlarge the deli
                                                             order for the entire
     and fresh meat area
                                                             month, then the supplier
 •   Apply a fresh coat of paint with new gold and
                                                             likely has a 90 percent or
     green colors
                                                             better compliance
 •   Widen aisles to 7.5 feet from the previous 6
                                                             average for that month anyway.
     feet
 •   Add new produce bins that better show off
     Walmart’s merchandising strategy to feature             Suppliers must keep sharp eyes on their must arrive
     fresh categories for shoppers.                          by date compliance reports, available in Retail Link®
                                                             under merchandising. Tracking compliance and
                                                             resolving issues is a great way to cut costs and
The new must arrive by date requirements may
prove to be difficult for suppliers. Some suppliers or       ensure happy relationships.   ◊
items, however, are exempt from the fees right now
as Walmart eases into these new requirements.
Merchandise arriving by air freight, fresh grocery



                                                                                                                            TM
The Voice of VICS –                                       4 of 9                     Don’t wait to be great… Collaborate!
-
 The VICS Monthly Newsletter
Go the Extra Mile, Reduce Chargebacks
                       Have chargeback fines                       Display examples of properly prepared boxes
                       become an issue for your                    in your shipping area.
                      success? Is your relationship                Regularly post performance metrics in a
with your retailer suffering? Chargebacks are not                  visible place to reinforce the importance of
only frustrating and unfavorable for you, but also                 continuous improvement on routing guide
for your retailer customer. The article from Kane is               compliance.
Able, Inc. - the CPG logistics specialists-entitled
Want to Reduce Chargeback Fines? Get Personal                The Extra Mile:
with Your Customer explores the need for personal
contact and relationship building. The key to
                                                                      Visit your customer. Be present when the
building a successful relationship is showing you
                                                                      order is received.
care and getting invested. Kane is Able, Inc.’s
                                                                      Observe why specifications are important.
monthly idea for April on efficient supply chain
                                                                      Understand the issues and implications
solutions for CPG products is to go the extra mile
                                                                      regarding a problem with a label
both figuratively and literally. As the article states,
                                                                      placement, BOL requirement, or pack
in order to reduce chargeback fines, there are basic
                                                                      request, through a retail site visit.
practices, principles, and guidelines that you should
                                                                      Send the right people. Warehouse
follow to make certain you are satisfying your retail
                                                                      supervisors or people who touch the
customers through adherence to their pre-
                                                                      product are appropriate and conversant
set requirements. But going the extra mile
                                                                      with the product.
and actually visiting your customer can have
the biggest impact on reducing
chargebacks.                                                       Overall, the article shows that a personal
                                                                   touch and retail site visit allow the
                                                                   opportunity to sit, talk, resolve, and grow.
The Basics:
                                                            The discussion of historical chargebacks, current
                                                            problems, expectation clarification, and
     Keep your eyes on retailer websites for                improvement methods not only strengthens your
     routing guide updates. These documents                 relationship with your customer, but also
     often change without notice.                           establishes a contact to work with concerning
     Train your warehouse staff that each                   future issues. This contact will trust and respect
     customer is special. Help them understand              your professionalism. So do yourself a favor, go the
     the unique requirements of each individual
     customer.
                                                            extra mile. It will be worth it.   ◊


Harnessing the Synergy of CPFR and S&OP
                      Recently, Joe Andraski and Fred       and those that can successfully harness collaboration
                      Baumann, vice president of            with this critical retail channel will gain a strong
                      industry strategies at JDA            competitive advantage in a crowded marketplace.
                      Software, were interviewed by
                      Real Results Magazine about the       Fred Bauman (FB): Leading mass-market retailers
                      value proposition of linking          are adopting time-phased forecasting and multi-level
                      Collaborative Planning,               inventory planning capabilities to generate
                      Forecasting and Replenishment         integrated supply chain plans across an extended
                      (CPFR) initiatives with sales and     period of time. This increased visibility also benefits
                      operations planning (S&OP).           suppliers, with the potential to reduce variability,
                                                            lower expediting costs, improve perfect-order
                                                            metrics, lower safety stock and proactively plan their
Why is there greater interest today around the              supply chain to enhance overall customer service,
linkage between CPFR and S&OP?                              efficiency and margin.

Joe Andraski (JA): Because CPFR and S&OP                    What are some recommendations for
complement each other and can enable stronger               successfully linking CPFR and S&OP?
supply chain links, bringing both processes together
into a cohesive plan can meet and exceed customer           (FB): Manufacturers must find a methodology that
expectations, add greater benefits for organizations,       ties independent best practices into a holistic process
as well as drive collaboration among all stakeholders       that involves all partners in the supply chain process.
to improve overall planning accuracy and optimize           Significant transformations have occurred in the
profits. In some cases, mass-market retailers can
represent nearly half of a manufacturer’s revenue,


                                                                                                                            TM
The Voice of VICS –                                       5 of 9                     Don’t wait to be great… Collaborate!
-
 The VICS Monthly Newsletter
Harnessing Synergy (Continued)

    marketplace that make the connection of CPFR and                    while the typical time horizon to support S&OP is 18
    S&OP more attainable and valuable, including the                    to 24 months into the future and is presented in
    recent deployment of reliable time-phased order                     units and currency. Practitioners have found that
    planning capabilities by several critical mass                      statistical models are only as good as the
    retailers. These new capabilities enable retailers to               environments that they represent and the quality of
    provide a view of what they plan to order beyond a                  the inputs that drive future calculations. Best
    single lead time. Importantly, these order projections              practices in demand management call for multiple
    start with the demand signal at the shelf and are                   views and perspectives with a statistical model being
    translated through the supply chain network,                        one of many inputs to the final plan. CPFR trading
    incorporating all of the logistics constraints of                   partners can provide validation and additional insight
    product flow. Best-practice committees such as VICS                 that can enhance the statistical forecast and add
    realized the importance of this transformation and                  insight that cannot be captured in a statistical model.
    provide an opportunity for manufacturers and their                  Can you summarize a migration path for successful
    trading partners to participate and validate the                    and effective Collaborative S&OP (CS&OP)?
    synergy of connecting CPFR and S&OP processes.
    Manufacturers must also ensure that they have                       (FB): The journey begins in the boardroom. Senior
    technology that is scalable and can support a linked                management must have a clear understanding of
    CPFR and S&OP process. Retro-fitting an emerging                    how this process is executed and how it helps the
    process into an old architecture or application built               organization attain strategic and tactical objectives.
    for a different purpose will cause more headaches                   It’s also important to assess demand planning and
    than positive results. Scalability is critical as an                S&OP processes against best-practice leaders. Utilize
    outdated system simply cannot support the                           industry experts and benchmarking materials to
    integration of data at this level of granularity. By                identify gaps and opportunities related to your
    adopting an advanced enterprise-wide technology                     current approach. Map your processes to best-
    foundation, manufacturers will be                                                       practice models and highlight
    effective at integrating this data into                                                 opportunities and potential ROI to
    a unified CPFR and S&OP process.                                                        senior management to acquire the
                                                                                            resources for the project plan.
    (JA): Manufacturers must take a                                                      Companies should also evaluate their
    proactive approach to successfully link                                       current technology infrastructure. Build a
    CPFR and S&OP. Success or failure in this                             requirements document that begins with the
    integration process hinges on creating a foundation                 formalized business process developed through the
    of support with key trading partners. Without that                  assessment stage of your migration path. It will be
    support and trust, manufacturers will not receive the               important to document the scope of the initiative
    data and visibility generated by time-phased                        that includes the trading partners that will be
    planning. Manufacturers should accurately portray                   involved, the number of product families
    how the data will be used to drive value to their                   incorporated and the planning horizon that will be
    trading partners. This includes committing to such                  utilized.
    benefits as shorter lead times, higher order fill rates,
    improved on-time delivery and lower supply chain                    (JA): I would add that manufacturers must
    costs as a result of sharing this data.                             designate CS&OP team leads for the deployment and
    Cross-functional teams have historically played a                   execution of the planning exercises. Existing
    critical role in the development of a single shared                 business processes will most likely be well-
    forecast and replenishment plan with an assigned                    entrenched and difficult to change. The CS&OP team
    mass-market retail customer. In the past, these                     leads need to have the leadership and empowerment
    teams have not been effective in translating                        to change the status quo.
    consumer-demand data into time-phased order plans
    that are integrated into the supply chain.                          Also, the process should be initiated sooner than
    Manufacturers must ensure that cross-functional                     later. Many companies have accrued great benefits
    teams have proven processes for integrating data                    by working through the process steps even before all
    pulled from time-phased demand planning into a                      data and technology components are fully loaded.
    holistic CPFR and S&OP process.                                     This approach helps companies begin to build the
    Additionally, companies will need executive                         integration and communication points between
    sponsorship to integrate CPFR and S&OP. It is                       functions and customers that will be critical to the
    imperative that C-level executives make the process                 ongoing success of the initiative.
    a priority to drive organizational change and build a
    foundation of trust. Senior leaders will require a
    business case that can support the transition to this
    new working model. Value-analysis models are
    available to assist with quantifying the value to gain              Lastly, companies should create a framework that
    required resources.                                                 fosters continuous improvement. Researching and
                                                                        documenting the baseline performance of the
                                                                        organization prior to the kick-off of the CS&OP
    How can companies effectively link CPFR and                         project and then monitoring the ongoing results will
    S&OP, given that the planning-time horizons                         add momentum and continued buy-in to the process.
    usually differ?

    (JA): The planning horizon for CPFR is usually short
    term and is typically completed in weeks or months,
                                                                                                                                  TM
The Voice of VICS –                                            6 of 9                      Don’t wait to be great… Collaborate!
-
 The VICS Monthly Newsletter
Harnessing Synergy (Continued)

What is the business value for companies                    for future demand shifts. There’s a tremendous
harnessing the synergy of CPFR and S&OP?                    opportunity to be seized by strategically planning
                                                            sales and supply through this integrated process.
(FB): Many retailers and manufacturers are still            Progressive manufacturers that unify the S&OP and
struggling with excess inventory as a result of the         CPFR models into a single process will gain a
economic downturn. As the economy starts to                 competitive advantage.    ◊
improve, however, there is risk that companies
operating too lean will be unable to fulfill orders and
will lose sales by not having a proactive plan in place




Take the Lead on the Road to Recovery
The recent article Realizing the Rewards of Recovery,              refining the message if necessary. Overall,
from eTrigue Corp., examines the necessity for a                   knowing which campaigns are delivering is
recovery plan. With the economic turmoil that this                 essential to optimizing your marketing spend.
country has seen in the past years many                     2.     Set Your Target: Defining your target market
organizations have entered what the article calls                  helps reduce costs and increase sales making
survival mode. The implementation of lean                          your CFO and sales team happy. By utilizing new
procedures has allowed organizations to preserve                   automation tools, B2B companies can segment
cash, making it possible for companies to ride out                 on virtually any criteria and optimize both the
uncertain times. There has however been talk of the                level of relevant audience personalization and
beginning of recovery in 2010, and with this                       campaign effectiveness to generate more sales
potential recovery comes potential opportunity to                  faster.
improve, grow, and soar.                                    3.     Nurture Your Relationships: Maintaining
                                                                   timely contact with prospects by reading and
The following trends demonstrate that recently                     responding to their activity can be a huge
business opportunities are opening up:                             competitive edge. Using automation tools,
    Cisco Systems saw a 23% jump in quarterly                      companies can automatically deliver messages
    profit and 8% gain in revenue. This is                                 and content specifically designed for the
    due to the increased spending by                                       information needs of prospects, assuring
    consumers on technological goods                                       that messaging is relevant and timely.
    and services‖                                                          4.        Prioritize the Real Prospects:
    The Commerce Department reported                                       Having sales focus on the right prospects
    a rise of 13.3% in business spending                                   will not only maximize revenue, but also
    on equipment and software in the                                       minimize the overall cost of sales. The
    fourth quarter of 2009                                                 weaning out of unqualified leads allows
    There has been 25% more imported                                       for the ability to optimize high-value
    cargo volume at major retailer ports                                   personnel. Automated Three Dimensional
    A recent online survey study polled                                    Lead Scoring highlights the potential
    over 600 B2B marketers showing                                         buyers that have the right demographic
    that over 60% of them believe their                                    background, web activity, and timing to
    business will start to recover in the                                  signal buyer behavior.
    second or third quarter of 2010                                        5.        Respond in Time: Companies
                                                                   cannot be last to respond when a prospect gets
Businesses need to realize that though they have                   the green light to move forward on a purchase.
been so concentrated on surviving the recession,                   Real-time lead alerts are received when a
there is an important opportunity at large; by                     potential customer visits your website and these
aggressively innovating and planning to lead their                 alerts provide the sales rep with enough
market sector out of the recession companies have                  information to assure a timely and appropriate
the ability to come out on top.                                    follow-up.

5 steps to help your organization leverage existing         The article notes that the recovery of the economy
resources to benefit from renewed spending in 2010:         this year is an uncertainty, therefore companies
                                                            need the ability to quickly adapt and respond to both
1.   Monitor your Marketing Spend: Truly                    short-term blips and V-shaped spikes. This still
     understanding the effectiveness of your                means doing more with less. Sales and marketing
     marketing campaign requires detailed web               automation can help companies increase
     activity tracking through to sale to determine         productivity, even if they aren’t in a position to
     the true ROI. This tracking allows for                 commit to added headcount. Many marketers plan to
     appropriate investing of marketing dollars and


                                                                                                                             TM
The Voice of VICS –                                       7 of 9                      Don’t wait to be great… Collaborate!
-
 The VICS Monthly Newsletter
boost their budgets in 2010, and the ability to ensure        that those dollars are spent intelligently and
    Road to Recovery (Continued)

    efficiently will be essential to emerging as one of the       spending seen in the first quarter will continue to
    winners from this recession.                                  increase throughout the year.   ◊
    The article encourages you to put these five steps to
    use for your business, and hopefully the renewed




The Buzz is Building for U Connect 2010




People are talking!!! For the first time ever, ―word of       high-energy performance by Grammy award-winning
mouth‖ ranks first as the #1 means by which                   recording artists, Rhonda Vincent and the Rage.
attendees first heard of U Connect 2010. People are
excited, fully engaged and can’t wait to be in San            Track Spotlight: Executive Sessions
Antonio this year. And why shouldn’t they be…U                Business leaders want to be the first to know about
Connect 2010 has it all…compelling topics…leading             new initiatives that can help them build more visible,
companies speaking on best practices, case studies,           secure and sustainable value chains. Don't miss key
and industry initiatives…robust networking                    sessions such as our Sustainability Panel and The
opportunities….AND a little fun thrown in to balance          Future of B2B2C.
it all out!
                                                              Learn more about the Executive Sessions at U
Networking Opportunities and Entertainment                    Connect
U Connect 2010 provides many opportunities to
connect all points of the value chain. If you want to         GS1 US and VICS hopes to see everyone in San
meet with key trading partners, VICS or GS1 US                Antonio◊
experts and cross-industry peers, U Connect
provides the setting for those connections to happen.
Join us Wednesday evening at the Knibbe Ranch for
great networking and a taste of the Old West with a




                                                                                                                                 TM
    The Voice of VICS –                                        8 of 9                     Don’t wait to be great… Collaborate!
     -
      The VICS Monthly Newsletter
VICS Meetings & Events



       Date             2010 Meetings/Events                                                    Location


                        Item-Level RFID Meeting
       Jun 7                                                                                    San Antonio, TX
                        Details & Registrations


                        U Connect 2010
       Jun 7-10                                                                                 San Antonio, TX
                        Annual Conference


                        Applying Lean Principles Across the Supply Chain
       Jun 7-11                                                                                 University Park, PA
                        Details


       Jun 8            VICS Board of Directors' Meeting                                        San Antonio, TX


                        VICS Annual Achievement Awards Ceremony & Dinner
       Jun 8                                                                                    San Antonio, TX
                        Sponsored by Hewlett-Packard


                        VICS Website Tutorial
       Jun 17                                                                                   Webcast
                        Details & Registrations

                        VICS Logistics Sub-Committee Meetings
       July 12-13                                                                               Lombard, IL
                        Hosted by CSCMP

                        PSU: Supply Chain Collaboration Program
       Aug 23-25                                                                                State College, PA
                        Details & Registrations


       Sept 26-29       CSCMP Annual Global Conference 2010                                     San Diego, CA

                        VICS Board of Directors’ Meeting
       Oct 20-21                                                                                Chicago, IL
                        Hosted by Accenture

                        VICS CPFR® Certification Program
       Nov 9-11                                                                                 Lawrenceville,NJ
                        Details



                                               www.cpgmatters.com/vics.html




                                           http://www.bernardsands.com/rpm.asp.




                                                     www.vics.org
VICS
Princeton Pike Corporate          Tel: 609-620-4590             Websites       Joe Andraski             Jo Ann Fiordland
Center                            Fax : 609-620-1201            www.vics.org   President & CEO, VICS    jfiordland@vics.org
1009 Lenox Dr., Suite 202         Email: admin@lists.vics.org   www.emptymil   jandraski@vics.org
Lawrenceville, NJ 08648                                         es.org




                                                                                                                              TM
  The Voice of VICS –                                           9 of 9                 Don’t wait to be great… Collaborate!
   -
    The VICS Monthly Newsletter

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Bill Stankiewicz Copy Of Vics Newsletter May Final

  • 1. May, 2010 Cooperation and Collaboration The discipline of logistics has evolved over time, with several domains coming together to produce a holistic method on managing important operational aspects of each company. From the very beginning transportation was recognized as a key to the development of an industrial region and in the case of the United States, the establishment of the states from territories. The value of warehousing became obvious as companies began to develop plans to produce to a forecast and to locate products based on their economic model. Transportation and warehousing came together and was called physical distribution, with ancillary functions such as forecasting, customer service, order entry, inventory management finding a home within a company, with none being considered to be essential to the success of the company. Thought leaders in academia and business came to realize that by bringing all these disciplines together companies can be more effective and efficient. Subsequently other functions were added, such as forecasting, materials procurement, operations planning, distribution requirements planning and materials requirements under the same management mantel, which they called supply chain management. Change Management Suffice it to say this area of expertise evolved as did other functional areas, while recognizing that http://www.ups.com/bussol?loc=en_US&viewID=metaCategoryView&contentI D=ct1_solg_met_industry&WT.svl=PNRO_L1 it was important to be successful, organizations had to avoid becoming paralyzed in functional silos. Thus collaborative planning forecasting and replenishment roared on the scene in the mid 90’s with one major company demonstrating significant value in increased sales, improved customer service and improved inventory management. TM The Voice of VICS – 1 of 9 Don’t wait to be great… Collaborate! - The VICS Monthly Newsletter
  • 2. Joe’s Corner (Continued) The point is that to be successful, companies had to normal process of establishing organizational, decide upon the approach they would use to remain process and technological strengths and relevant and successful in turbulent times. They had weaknesses. Cross functional means that each to decide upon the metrics they would use to entity completes a company self assessment. measure their performance on one hand and the The teams come together to determine service being provided to their trading partners on company strengths and weaknesses. The next the other. step is to determine which trading partners should be named as strategic accounts. The sum and substance has to do with speed to • After the self assessment, a plan to exploit the market, visibility and the ability to accurately company strengths and to improve upon the forecast sales at various points along the supply weaknesses. chain. This is no easy task, especially if companies • Agreeing on metrics with key trading partners have become engrained in a silo mentality, internally is really important to success. By arriving at or with their trading partners and service providers. industry acceptable metrics the disputes concerning service levels are mitigated. What has been learned over the years is that the major challenge to implementation is change It’s of critical importance to understand that a management. Technology and business processes foundation that has to be established to provide the are quite capable of making the necessary company with the resources to complete in a accommodations that must be made to follow a plan complex market place, from sourcing to to out distance competition. However the other key sustainability, as effectively and efficiently as enablers are trust and transformation. possible. This can only be accomplished if the entire organization is committed to education and the If trust does not exist internally, or externally, the willingness to work toward being the best possible. prospect of sharing information is practically impossible. If a company has a strategy of leading Collaborative Business Model their competitor set with, i.e. speed to market or A company who has followed these principles is increasing customer and consumer satisfaction, they Lowe’s. Lowe’s is a US based retail company who has will not be successful by working in a vacuum. over 1,700 home improvement and appliance stores in the United States and Canada and is serving more Getting the Basics Right than 14 million customers a week. The company is There is a continuum, a process that has to be ranked 47 on the FORTUNE 500 list. Lowe’s had a lot understood for companies to out distance their of success following the above mentioned principles. competitors and to exceed their customers’ Keep in mind that companies will determine what expectations. works for them and that there is no set formula. • Senior Leadership understanding and support. Here are some quotes from a recent joint Without the support of senior leadership it is presentation Lowe’s made with Black and Decker, a difficult if not impossible to affect change. major supplier of tools and accessories. Based on countless case studies it has been • ―We’re working as a team to achieve common determined that customarily a mid level goals‖. manager becomes enamored with a particular • ―Data helps us react properly-instead of program and develops a constituency that guessing‖. assists in convincing senior management to • ―Data gave us a common language to work pick up the baton. together without the emotion‖. • Trust needs to be established by adopting • ―This has allowed us to effectively manage their guiding principles; for example, every company business with no roadblocks‖. entity is treated like the best customer, every • ―We have a better understanding of what request for information is immediately questions to ask‖. responded to by the involved party and that • ―We’re planning on based on facts… not due dates are met. assumptions‖. • The principles of transformation need to be understood, i.e. how to move from a stoic The results included an improved forecast which, organization to one that is responsive and increased store sales, reduced inventory, avoided out trusting, is an art that needs to be understood of stocks and improved customer satisfaction. One and adopted. of the most salient comments made was ―prior to • Every organization has to understand the moving to a collaborative business model, there was barriers that are encountered by the natural tension in the air each time we met to discuss the reaction to change. Regardless of the business. Now we are working as a team and the magnitude of the change, if individuals feel tension has evaporated‖. their normal routine or secure position is threatened, they will be resistant. Therefore Black & Decker saw additional benefits. They were the steps required to effect change must be able to resolve issues quickly, they could control and understood. prevent issues from arising, they drove ownership • Cross functional self assessment needs to be with each customer team, they gained credibility understood and become integrated into the TM The Voice of VICS – 2 of 9 Don’t wait to be great… Collaborate! - The VICS Monthly Newsletter
  • 3. Joe’s Corner (Continued) Given a relatively short season for sales, there was with their manufacturing group and they were able no time to recover and consequently dramatic steps to support Lowe’s more efficiently. had to be taken. The primary step was to organize and collaborate internally, obtain the appropriate It’s easy to see that this was a complete win / win, software and align with their suppliers. The rest is a fostered by a thoughtful approach to collaboration. very successful history of a great turnaround. West Marine, the largest supplier of boating Co-operation and Collaboration equipment and supplies, with $1B in sales, greater It is obvious that what has been discussed in this that 15% market share and growing at a rate of 40 paper has been the essence of bringing together the stores per year, embarked on a collaborative benefits derived from effective marketing with program 4 years ago. It was a thoughtful process, excellent execution of logistics. Marketing is a very beginning with 20 suppliers and has since grown to comprehensive functional area that includes over 200. Their primary goals going in were to forecasting, pricing, promotional activities and achieve 90% on time shipping, greater than 96% in customer satisfaction. As pointed out several times, stock in every store and forecast accuracy greater no functional area and especially marketing can that 85%. operate in a silo environment. The results that West Marine enjoyed included Logistics is the mission critical functional area that • $23M drop in DC –Logistics expense over 4 requires the cooperation and collaboration of the years marketing function to be able to deliver on the • In stock greater that 96% company’s commitment to its customers. Marketing • On time shipments improved from 30% to has to be aware of the benefit the logistics 80% department can deliver that allows the company to • Inventory reduced $30 million meet its goals and objectives. • Supplier focus on customer sales • Cross-functional problem-solving Marketing and logistics are inextricably linked in • Holistic solutions take all stakeholders into delivering on the promises that companies make to account their constituents, share holders, stake holders and customers. Providing the organizational structure The move to a collaborative business model played a and compensation program to incent collaboration is key role in keeping West Marine from going the responsibility of senior management. Companies bankrupt. Store sales suffered badly after two with forward thinking management are sure to be acquisitions, primarily because the company could successful.◊ not keep products in stock that were in demand. All the very best, Joe Walmart Requires Supplier Efficiency In a recent Li & Fung, must make sure that their merchandise article from does not arrive too late, too early, or with the wrong WalmartHELP quantity of product, and failure to do so results in entitled Must Arrive by Date Compliance, Walmart the supplier paying a fee of 3% of the cost of goods. delves into its new must arrive by date requirements As a global leader in supply chain efficiency, for its suppliers. Innovating, living by, and growing Walmart’s must arrive by date requirements only from its notorious save money, live better model further boost effectiveness in the supply line, Walmart recognizes that suppliers choose to use the inventory or overstock costs, and responsiveness to cheapest transportation to get goods from Point A to customer demand. Point B. This poses as a problem concerning compliance with the new must arrive by date These requirements were implemented in January, requirements and introduces the possible need for but Walmart was found itself late in charging out-of- change in the transportation model. compliance fees for merchandise that arrived at the wrong time or with the wrong quantity. Target and The article from May 13, 2010 explores the new Home Depot have been using this date compliance policy that suppliers must get their merchandise to a policy with its suppliers for some time now, and have distribution center or store within a pre-determined seen much success with it. time frame, or suffer the penalty of paying a fee. Walmart suppliers, such as Procter and Gamble and The must arrive by date requirements include: • TM The Voice of VICS – 3 of 9 Don’t wait to be great… Collaborate! - The VICS Monthly Newsletter
  • 4. Walmart Help (Continued) • A four-day arrival compliance window meaning items, and small packages and products for Sam’s no more than three days prior to the day the Club are currently exempt from the fees. The article merchandise is due to the merchandise center, shares that Walmart also offers exemptions for but not one day later than that due date. suppliers who pay for their own freight in less than • The merchandise cases received within the truckload shipments, but that will eventually change. must arrive by date delivery must be more Also, if suppliers cancel purchase orders prior to the than 90% of the merchandise ordered. must arrive by date, late or early arrivals are not held against them. High Impact Analytics is an example of one company that works with manufacturing suppliers who It is also stated that transport goods to Walmart and Sam’s Club. This manufacturers who ship company helps to improve planning methods of the goods with truckload carriers, suppliers and helps them estimate proper lead times as opposed to less-than- to provide Walmart with their required products in truckload carriers have a the allotted arrival window. much easier time complying with the rules because their The goal of implementing this incentive for suppliers trucks only deliver to one to deliver goods on time is to cut costs, and location. Less-than-truckload carriers combine therefore provide goods for less to Walmart shipments from multiple customers into one trailer customers. The article expresses that stores are no and therefore have multiple deliveries. These carriers longer acting as warehouses, with an overabundance face the inevitable and inconvenient issue of of inventory in stock rooms or in trailers behind inconsistency. This is because their goods go through stores. Instead, Walmart’s ultimate goal is for just in freight consolidators, with sometimes large numbers time arrival of merchandise in stores. This will allow of variable days. In addition, some goods are Walmart to restock shelves and serve customers in a delivered by rail, which can be very inconsistent. cost-effective, more efficient manner. Tracking compliance for suppliers is not a difficult The arrival date requirements and minimizing of task, but if there is a problem following the inventory follows Walmart’s current initiative to compliance rules, resolving this problem can be a reduce the number of shelves and clear the center struggle. As the article states, a supplier may have aisles of clutter. As part of the Project Impact to evaluate the entire supply chain if compliance with initiative, Walmart aims to remodel stores to make must arrive by dates doesn’t improve after changes them appear cleaner and create easier to shop traffic in lead time estimates have been implemented. patterns within Supercenters nationwide. Prepaid suppliers must evaluate their current freight carriers and possibly make changes in order to ensure that they are shipping on time and with the right quantity. It is important to realize also that Walmart does not penalize each order that is out of compliance with the must arrive by date. The compliance average is taken for the entire month and if at least 90 percent of the merchandise complies with the must arrive by window in that month, then the supplier is not subject to fees. So, one order in a month might arrive late or with only Neighborhood Market in Bentonville — the first 85% of the ordered Neighborhood Market and built only 11 years ago — product for that specific is getting a makeover. Walmart plans to: purchase order, but if that is the only out of compliance purchase • Spend about $1.2 million to enlarge the deli order for the entire and fresh meat area month, then the supplier • Apply a fresh coat of paint with new gold and likely has a 90 percent or green colors better compliance • Widen aisles to 7.5 feet from the previous 6 average for that month anyway. feet • Add new produce bins that better show off Walmart’s merchandising strategy to feature Suppliers must keep sharp eyes on their must arrive fresh categories for shoppers. by date compliance reports, available in Retail Link® under merchandising. Tracking compliance and resolving issues is a great way to cut costs and The new must arrive by date requirements may prove to be difficult for suppliers. Some suppliers or ensure happy relationships. ◊ items, however, are exempt from the fees right now as Walmart eases into these new requirements. Merchandise arriving by air freight, fresh grocery TM The Voice of VICS – 4 of 9 Don’t wait to be great… Collaborate! - The VICS Monthly Newsletter
  • 5. Go the Extra Mile, Reduce Chargebacks Have chargeback fines Display examples of properly prepared boxes become an issue for your in your shipping area. success? Is your relationship Regularly post performance metrics in a with your retailer suffering? Chargebacks are not visible place to reinforce the importance of only frustrating and unfavorable for you, but also continuous improvement on routing guide for your retailer customer. The article from Kane is compliance. Able, Inc. - the CPG logistics specialists-entitled Want to Reduce Chargeback Fines? Get Personal The Extra Mile: with Your Customer explores the need for personal contact and relationship building. The key to Visit your customer. Be present when the building a successful relationship is showing you order is received. care and getting invested. Kane is Able, Inc.’s Observe why specifications are important. monthly idea for April on efficient supply chain Understand the issues and implications solutions for CPG products is to go the extra mile regarding a problem with a label both figuratively and literally. As the article states, placement, BOL requirement, or pack in order to reduce chargeback fines, there are basic request, through a retail site visit. practices, principles, and guidelines that you should Send the right people. Warehouse follow to make certain you are satisfying your retail supervisors or people who touch the customers through adherence to their pre- product are appropriate and conversant set requirements. But going the extra mile with the product. and actually visiting your customer can have the biggest impact on reducing chargebacks. Overall, the article shows that a personal touch and retail site visit allow the opportunity to sit, talk, resolve, and grow. The Basics: The discussion of historical chargebacks, current problems, expectation clarification, and Keep your eyes on retailer websites for improvement methods not only strengthens your routing guide updates. These documents relationship with your customer, but also often change without notice. establishes a contact to work with concerning Train your warehouse staff that each future issues. This contact will trust and respect customer is special. Help them understand your professionalism. So do yourself a favor, go the the unique requirements of each individual customer. extra mile. It will be worth it. ◊ Harnessing the Synergy of CPFR and S&OP Recently, Joe Andraski and Fred and those that can successfully harness collaboration Baumann, vice president of with this critical retail channel will gain a strong industry strategies at JDA competitive advantage in a crowded marketplace. Software, were interviewed by Real Results Magazine about the Fred Bauman (FB): Leading mass-market retailers value proposition of linking are adopting time-phased forecasting and multi-level Collaborative Planning, inventory planning capabilities to generate Forecasting and Replenishment integrated supply chain plans across an extended (CPFR) initiatives with sales and period of time. This increased visibility also benefits operations planning (S&OP). suppliers, with the potential to reduce variability, lower expediting costs, improve perfect-order metrics, lower safety stock and proactively plan their Why is there greater interest today around the supply chain to enhance overall customer service, linkage between CPFR and S&OP? efficiency and margin. Joe Andraski (JA): Because CPFR and S&OP What are some recommendations for complement each other and can enable stronger successfully linking CPFR and S&OP? supply chain links, bringing both processes together into a cohesive plan can meet and exceed customer (FB): Manufacturers must find a methodology that expectations, add greater benefits for organizations, ties independent best practices into a holistic process as well as drive collaboration among all stakeholders that involves all partners in the supply chain process. to improve overall planning accuracy and optimize Significant transformations have occurred in the profits. In some cases, mass-market retailers can represent nearly half of a manufacturer’s revenue, TM The Voice of VICS – 5 of 9 Don’t wait to be great… Collaborate! - The VICS Monthly Newsletter
  • 6. Harnessing Synergy (Continued) marketplace that make the connection of CPFR and while the typical time horizon to support S&OP is 18 S&OP more attainable and valuable, including the to 24 months into the future and is presented in recent deployment of reliable time-phased order units and currency. Practitioners have found that planning capabilities by several critical mass statistical models are only as good as the retailers. These new capabilities enable retailers to environments that they represent and the quality of provide a view of what they plan to order beyond a the inputs that drive future calculations. Best single lead time. Importantly, these order projections practices in demand management call for multiple start with the demand signal at the shelf and are views and perspectives with a statistical model being translated through the supply chain network, one of many inputs to the final plan. CPFR trading incorporating all of the logistics constraints of partners can provide validation and additional insight product flow. Best-practice committees such as VICS that can enhance the statistical forecast and add realized the importance of this transformation and insight that cannot be captured in a statistical model. provide an opportunity for manufacturers and their Can you summarize a migration path for successful trading partners to participate and validate the and effective Collaborative S&OP (CS&OP)? synergy of connecting CPFR and S&OP processes. Manufacturers must also ensure that they have (FB): The journey begins in the boardroom. Senior technology that is scalable and can support a linked management must have a clear understanding of CPFR and S&OP process. Retro-fitting an emerging how this process is executed and how it helps the process into an old architecture or application built organization attain strategic and tactical objectives. for a different purpose will cause more headaches It’s also important to assess demand planning and than positive results. Scalability is critical as an S&OP processes against best-practice leaders. Utilize outdated system simply cannot support the industry experts and benchmarking materials to integration of data at this level of granularity. By identify gaps and opportunities related to your adopting an advanced enterprise-wide technology current approach. Map your processes to best- foundation, manufacturers will be practice models and highlight effective at integrating this data into opportunities and potential ROI to a unified CPFR and S&OP process. senior management to acquire the resources for the project plan. (JA): Manufacturers must take a Companies should also evaluate their proactive approach to successfully link current technology infrastructure. Build a CPFR and S&OP. Success or failure in this requirements document that begins with the integration process hinges on creating a foundation formalized business process developed through the of support with key trading partners. Without that assessment stage of your migration path. It will be support and trust, manufacturers will not receive the important to document the scope of the initiative data and visibility generated by time-phased that includes the trading partners that will be planning. Manufacturers should accurately portray involved, the number of product families how the data will be used to drive value to their incorporated and the planning horizon that will be trading partners. This includes committing to such utilized. benefits as shorter lead times, higher order fill rates, improved on-time delivery and lower supply chain (JA): I would add that manufacturers must costs as a result of sharing this data. designate CS&OP team leads for the deployment and Cross-functional teams have historically played a execution of the planning exercises. Existing critical role in the development of a single shared business processes will most likely be well- forecast and replenishment plan with an assigned entrenched and difficult to change. The CS&OP team mass-market retail customer. In the past, these leads need to have the leadership and empowerment teams have not been effective in translating to change the status quo. consumer-demand data into time-phased order plans that are integrated into the supply chain. Also, the process should be initiated sooner than Manufacturers must ensure that cross-functional later. Many companies have accrued great benefits teams have proven processes for integrating data by working through the process steps even before all pulled from time-phased demand planning into a data and technology components are fully loaded. holistic CPFR and S&OP process. This approach helps companies begin to build the Additionally, companies will need executive integration and communication points between sponsorship to integrate CPFR and S&OP. It is functions and customers that will be critical to the imperative that C-level executives make the process ongoing success of the initiative. a priority to drive organizational change and build a foundation of trust. Senior leaders will require a business case that can support the transition to this new working model. Value-analysis models are available to assist with quantifying the value to gain Lastly, companies should create a framework that required resources. fosters continuous improvement. Researching and documenting the baseline performance of the organization prior to the kick-off of the CS&OP How can companies effectively link CPFR and project and then monitoring the ongoing results will S&OP, given that the planning-time horizons add momentum and continued buy-in to the process. usually differ? (JA): The planning horizon for CPFR is usually short term and is typically completed in weeks or months, TM The Voice of VICS – 6 of 9 Don’t wait to be great… Collaborate! - The VICS Monthly Newsletter
  • 7. Harnessing Synergy (Continued) What is the business value for companies for future demand shifts. There’s a tremendous harnessing the synergy of CPFR and S&OP? opportunity to be seized by strategically planning sales and supply through this integrated process. (FB): Many retailers and manufacturers are still Progressive manufacturers that unify the S&OP and struggling with excess inventory as a result of the CPFR models into a single process will gain a economic downturn. As the economy starts to competitive advantage. ◊ improve, however, there is risk that companies operating too lean will be unable to fulfill orders and will lose sales by not having a proactive plan in place Take the Lead on the Road to Recovery The recent article Realizing the Rewards of Recovery, refining the message if necessary. Overall, from eTrigue Corp., examines the necessity for a knowing which campaigns are delivering is recovery plan. With the economic turmoil that this essential to optimizing your marketing spend. country has seen in the past years many 2. Set Your Target: Defining your target market organizations have entered what the article calls helps reduce costs and increase sales making survival mode. The implementation of lean your CFO and sales team happy. By utilizing new procedures has allowed organizations to preserve automation tools, B2B companies can segment cash, making it possible for companies to ride out on virtually any criteria and optimize both the uncertain times. There has however been talk of the level of relevant audience personalization and beginning of recovery in 2010, and with this campaign effectiveness to generate more sales potential recovery comes potential opportunity to faster. improve, grow, and soar. 3. Nurture Your Relationships: Maintaining timely contact with prospects by reading and The following trends demonstrate that recently responding to their activity can be a huge business opportunities are opening up: competitive edge. Using automation tools, Cisco Systems saw a 23% jump in quarterly companies can automatically deliver messages profit and 8% gain in revenue. This is and content specifically designed for the due to the increased spending by information needs of prospects, assuring consumers on technological goods that messaging is relevant and timely. and services‖ 4. Prioritize the Real Prospects: The Commerce Department reported Having sales focus on the right prospects a rise of 13.3% in business spending will not only maximize revenue, but also on equipment and software in the minimize the overall cost of sales. The fourth quarter of 2009 weaning out of unqualified leads allows There has been 25% more imported for the ability to optimize high-value cargo volume at major retailer ports personnel. Automated Three Dimensional A recent online survey study polled Lead Scoring highlights the potential over 600 B2B marketers showing buyers that have the right demographic that over 60% of them believe their background, web activity, and timing to business will start to recover in the signal buyer behavior. second or third quarter of 2010 5. Respond in Time: Companies cannot be last to respond when a prospect gets Businesses need to realize that though they have the green light to move forward on a purchase. been so concentrated on surviving the recession, Real-time lead alerts are received when a there is an important opportunity at large; by potential customer visits your website and these aggressively innovating and planning to lead their alerts provide the sales rep with enough market sector out of the recession companies have information to assure a timely and appropriate the ability to come out on top. follow-up. 5 steps to help your organization leverage existing The article notes that the recovery of the economy resources to benefit from renewed spending in 2010: this year is an uncertainty, therefore companies need the ability to quickly adapt and respond to both 1. Monitor your Marketing Spend: Truly short-term blips and V-shaped spikes. This still understanding the effectiveness of your means doing more with less. Sales and marketing marketing campaign requires detailed web automation can help companies increase activity tracking through to sale to determine productivity, even if they aren’t in a position to the true ROI. This tracking allows for commit to added headcount. Many marketers plan to appropriate investing of marketing dollars and TM The Voice of VICS – 7 of 9 Don’t wait to be great… Collaborate! - The VICS Monthly Newsletter
  • 8. boost their budgets in 2010, and the ability to ensure that those dollars are spent intelligently and Road to Recovery (Continued) efficiently will be essential to emerging as one of the spending seen in the first quarter will continue to winners from this recession. increase throughout the year. ◊ The article encourages you to put these five steps to use for your business, and hopefully the renewed The Buzz is Building for U Connect 2010 People are talking!!! For the first time ever, ―word of high-energy performance by Grammy award-winning mouth‖ ranks first as the #1 means by which recording artists, Rhonda Vincent and the Rage. attendees first heard of U Connect 2010. People are excited, fully engaged and can’t wait to be in San Track Spotlight: Executive Sessions Antonio this year. And why shouldn’t they be…U Business leaders want to be the first to know about Connect 2010 has it all…compelling topics…leading new initiatives that can help them build more visible, companies speaking on best practices, case studies, secure and sustainable value chains. Don't miss key and industry initiatives…robust networking sessions such as our Sustainability Panel and The opportunities….AND a little fun thrown in to balance Future of B2B2C. it all out! Learn more about the Executive Sessions at U Networking Opportunities and Entertainment Connect U Connect 2010 provides many opportunities to connect all points of the value chain. If you want to GS1 US and VICS hopes to see everyone in San meet with key trading partners, VICS or GS1 US Antonio◊ experts and cross-industry peers, U Connect provides the setting for those connections to happen. Join us Wednesday evening at the Knibbe Ranch for great networking and a taste of the Old West with a TM The Voice of VICS – 8 of 9 Don’t wait to be great… Collaborate! - The VICS Monthly Newsletter
  • 9. VICS Meetings & Events Date 2010 Meetings/Events Location Item-Level RFID Meeting Jun 7 San Antonio, TX Details & Registrations U Connect 2010 Jun 7-10 San Antonio, TX Annual Conference Applying Lean Principles Across the Supply Chain Jun 7-11 University Park, PA Details Jun 8 VICS Board of Directors' Meeting San Antonio, TX VICS Annual Achievement Awards Ceremony & Dinner Jun 8 San Antonio, TX Sponsored by Hewlett-Packard VICS Website Tutorial Jun 17 Webcast Details & Registrations VICS Logistics Sub-Committee Meetings July 12-13 Lombard, IL Hosted by CSCMP PSU: Supply Chain Collaboration Program Aug 23-25 State College, PA Details & Registrations Sept 26-29 CSCMP Annual Global Conference 2010 San Diego, CA VICS Board of Directors’ Meeting Oct 20-21 Chicago, IL Hosted by Accenture VICS CPFR® Certification Program Nov 9-11 Lawrenceville,NJ Details www.cpgmatters.com/vics.html http://www.bernardsands.com/rpm.asp. www.vics.org VICS Princeton Pike Corporate Tel: 609-620-4590 Websites Joe Andraski Jo Ann Fiordland Center Fax : 609-620-1201 www.vics.org President & CEO, VICS jfiordland@vics.org 1009 Lenox Dr., Suite 202 Email: admin@lists.vics.org www.emptymil jandraski@vics.org Lawrenceville, NJ 08648 es.org TM The Voice of VICS – 9 of 9 Don’t wait to be great… Collaborate! - The VICS Monthly Newsletter