The document summarizes Vodafone Portugal's express delivery strategy. It started in 2002 with a pilot program for 24-hour deliveries to delight customers. Based on customer feedback, it expanded regionally but faced stock issues. It evolved to centralize warehouses, integrate ordering systems, and allow carriers to schedule deliveries digitally. This reduced costs while improving customer satisfaction, returns, and the delivery rate to nearly 100%. Lessons included prioritizing reliability over speed and how communication and information integration across partners improved the process.

1. Hi Tech & Electronics
Supply Chain Summit 2007
Top Express Deliveries Strategies
September 2007
Amsterdam

2. Agenda
• Vodafone Group
• Vodafone Portugal
• Express Deliveries
– How did it start
– Service Evolution
– Lessons Learned

3. Vodafone Group

4. The Vodafone Group
• The world’s leading mobile telecommunications
company
Presence in 61 countries: equity interests in 25 countries
and partner networks in further 36 markets
232 million Proportionate Customers* as of 30 June 2007
(does not include partner networks’ customers)
Around 66,000 Employees
Group Revenue in 2006** of £31.1 billion
(around 46 billion euros)
*Customer number adjusted by the Vodafone Group’s equity interest in each operator
** 2006 Vodafone fiscal year refers to the 12-month period ended on 31 March 2007

5. Vodafone Portugal

6. Vodafone Portugal
100% owned by Vodafone Group
Portuguese second largest telecommunications operator
(after the incumbent)
Total operating revenue of 1,4 billion euros in 2006 *
Around 1,700 Employees
Around 4.8 million Customers as of 30 June 2007
• Pre-paid customers represent 79% of total customer
base
* 2006 Vodafone fiscal year refers to the 12-month period ended on 31 March 2007

7. Vodafone Portugal
Vodafone has consistently gained market share to its competitors in the mobile
market. In the last 3 year Vodafone Portugal gained almost 5 percentage points
of customers and service revenue market share
Customers Market share Service Revenue Market Share
48.0% 47.1%
44.4% 46.2% 45.1%
43.6% 44.3% 43.0%
35.7% 36.3%
33.2% 39.2%
31.6% 36.2% 37.7%
34.3%
20.4% 19.7% 19.9% 20.1% 19.5% 18.7% 18.0% 17.7%
31 Mar 04 31 Mar 05 de Calendário 06
31 Mar 31 Mar 07 2003/04 2004/05 2005/06 2006/07
Anos
Calculated using the information disclosed by each operator.

8. Vodafone Portugal Supply Chain

9. Vodafone Portugal Supply Chain
Main structure
COMPANY
HANDSET BUSINESS LINE
SUPPLIERS (DIRECT SALES FORCE)
OWN
STORES
CONSUMER VODAFONE
BUSINESS BRANDED CUSTOMERS
LINE STORES
OTHER
REAILERS
SIM CARD DISTANCE
SUPPLIERS SELLING

10. Vodafone Portugal Supply Chain
Network Fulfilment
VMI
Agent Stock
Management Supply
p^mL^ml
Network
Planning
Demand
Planning Forecast
Daily
Web connection from VBS Communication

11. Vodafone Portugal Supply Chain
Loyalty programme
€ 1 = 2 points

12. Loyalty programme
Customer order process workflow - initial
Stock
Customer Order Sales Capture Picking & Delivery Payment
Places creation & Order Invoice Collection
To Packing By mail Received
order validation Creation
order
• Points deduction
coupon
• Permanency The physical process was done in warehouse
contract Warehouses are outsourced
But working on VF-PT SAP system
The signed coupon worked as a signed contract
For the permanency period
Siebel SAP R/3 Carrier execution

13. Express Deliveries
How everything started

14. How everything started
• In 2002 we decided to delight our customers
– By making express deliveries
–24 hours max. Since their request into their homes!
• What would you say?
– EXPENSIVE!
–Right! We thought so too… so implemented it only for our best
customers

15. Customer Order Process Workflow - 2003
Stock
Customer Order Shipping Sales Delivery
Capture
Places creation & Centre Order By mail
Creation To
order validation selection
order
Picking & Payment
Invoice Collection
Televiva: Packing Received
For Lisbon Stock
coupon Sales Capture
or Order
Porto Creation To Customer
Delivery
order delivey
schedule By carrier
Based on postal code If no stock,
manual switch
to standard expedition
The physical process for mail was still done in warehouse
Televiva process was done in house warehouse
Siebel SAP R/3 Carrier execution

16. Customers Voice
• 2003 was the analysis year of the project
• Our customers said:
– Satisfaction with delivery time: 3,3 in a 4 level scale
30%
25%
20%
15%
10%
5%
0%
1 day 1-5 6 - 10 11 -15 16 - 30 + 30 N.a.

17. Overall Satisfaction
40%
Delivery Service 10
34% 9
Média
8,47
8,47
8
30%
28%
7
1- Poor 10- Very Good
6
20%
20%
5
4
10%
3
7%
5%
4%
2
1% 0% 0% 1%
0% 1
1 2 3 4 5 6 7 8 9 10
Base: 1294 interviews

18. Express Deliveries
The evolution

19. Actual Clube VIVA Workflow
Customer Delivery Schedule
Customer
• Coupons were abandoned
Places
order
• The whole process has gone digital
WEB
Call
Center
• Web offer was introduced on
Vodafone.pt with on line catalogue
• Customers can easily make the order
themselves
Siebel SAP R/3 Transporter’s Information Systems Web

20. Actual Clube VIVA Workflow
Customer Delivery Schedule
Phase 1 Phase 2
Customer Order Shipping
Places creation & Centre • Centralize all Televiva warehouses in
• A regional expansion was done
order validation selection based on in house warehouses the main operation
proliferation
• Points deduction
• Actual structure:
• Permanency • The warehouses localization was •2 outsourced warehouses for
Call contract based on regional decisions to get the entire VF operation
Center
closer to customer and reduce
delivery time
WEB •No dedicated warehouse
• Stock ruptures problems arose
•Divided by brand
• Cost duplication
• 2 small warehouses in the
islands: Madeira & Azores
• Customer added value was not quick
delivery
Siebel SAP R/3 Transporter’s Information Systems Web

21. Actual Clube VIVA Workflow
Customer Delivery Schedule
• Done previously to invoicing
•Instead of sending handsets to
carrier we are sending orders
Stock Orders information
Customer Order Shipping Sales Capture placed
Places creation & Centre Order
Creation To Informed
order validation selection • On a daily basis system pulls out all
order to carrier
the orders created in that day
• Points deduction
• Permanency • Creates a web table and sends it to
Call contract carrier via xml
Center
Televiva:
• Carriers incorporates information into
WEB 4 warehouses: their routing system
outsourced (2)
Islands (2)
• Some orders will already have
delivery date agreed with customer
Siebel SAP R/3 Transporter’s Information Systems Web

22. Actual Clube VIVA Workflow
Customer Delivery Schedule
• Possible to be done in VF call centre
Done by carrier
Stock Orders
Customer Order Shipping Sales Customer • Carrier time schedule is incorporated
Capture placed
Places creation & Centre Order delivey in Siebel
Creation To Informed
order validation selection schedule •Assistant can choose on line
order to carrier
with customer time and place of
• Points deduction delivery
• Permanency
Call contract • No scheduling to:
Center
No scheduled deliveries •Weekend and holidays
WEB •If is an island postal code
•If no stock available
•In these cases delivery date is
left blank
Siebel SAP R/3 Transporter’s Information Systems Web

23. Actual Clube VIVA Workflow
Customer Delivery Schedule
Stock Orders
Customer Order Shipping Sales Customer
Capture placed Deliveries
Places creation & Centre Order delivey
To Informed
order validation selection Creation schedule scheduled
order to carrier
• Points deduction
• On a daily basis carrier pulls from its
• Permanency
system sheduled deliveries for the
Call contract
Center day after the following day
WEB • Sends information directly to
outsourced warehouses via WEB
• Warehouse stores information on
local database in dispatch area
Siebel SAP R/3 Transporter’s Information Systems Web

24. Actual Clube VIVA Workflow
Customer Delivery Schedule
Stock Orders
Shipping Sales Customer
… Centre Order
Capture placed
delivey
Deliveries Picking &
Invoice
Delivery Delivery
To Informed Packing By carrier confirmation
selection Creation schedule scheduled
order to carrier
• By the end of the day carrier picks up stock for the deliveries
• During the night makes their internal transfers
• Delivery confirmation is uploaded by palm on the moment of delivery into carrier
system
• Carrier uploads information into web for on line research
•By VF back office
•By VF call centre
•By the end customer himself
Siebel SAP R/3 Transporter’s Information Systems Web

25. Actual Clube VIVA Workflow
Customer Delivery Schedule
Cash
delivery
… Deliveries Picking & Delivery Delivery Payment
Invoice Collection
scheduled Packing By carrier confirmation Received
ATM
payment
• The carriers along with the palms started using portable ATM
• ATM supported on GPRS supplied by VF
• Payment is done directly into our bank account with no need of cash transportation or
bank transfers
Siebel SAP R/3 Transporter’s Information Systems Web

26. To amend
Evolution Summary of Express Deliveries
Initial
2002 2004 2005 2006
Stage
Centralization
Mail Pilot in Lisbon Regional Informations
delivery And Porto expansion to and
entire country Systems
integration

27. Express Deliveries
Lessons Learned

28. KPI´s evolution
Initial 2004 2005 2006
Mail delivery rate 100% 75% 99% 99%
% Returns 10% 9% 6,50% 6%
Cost evolution initial -6% -16% -12%

29. Lessons Learned
• For customers is more important to be trustworthy than to be quick
– Ex : 8% of deliveries were asked for the following 2 days
• Integration really works
– By scheduling directly with customer on order moment
–Reduction of outbound calls by carrier – cost reduction
–Single contact to customer
• Communication is needed
– Everybody accessing the same information and giving the same inputs to
customers makes life really easier for everybody
And easy is cheap…

30. Lessons Learned
• Replacing inventory by information integration allowed us to:
– Reduce unnecessary billing
– Unnecessary shipping
• Replacing mail delivery by a premium delivery system
– Reduction of returns
– Customer satisfaction increase
Operational Costs Reduction

31. Future developments
• 6 Sigma analysis of the process focusing on:
– Impossible to schedule delivery with customer
– Although is scheduled final delivery fails
• Express Deliveries will be applicable to:
– Web Sales
– Telemarketing Sales
–…

32. Not Always better service means
higher costs!
THANK YOU!
Mafalda Alves Dias
Logistics Manager – Vodafone Portugal
Mafalda.dias@vodafone.com
+ 351 919 406 565