The Nexus of Forces in Action – Use-Case 4: Supply Chain Store Brand Integration
Summary
The ability to plan merchandise across multiple supply chain online markets, with paired store ordering, enhanced VMI, and enhanced shared transport planning and fleet usage.
Primary Industry Sectors
Consumer brand retail
Business Value
Improved availability of products and services on-demand, forecast on-demand delivery performance, profit and cost optimization. Physical stores and online stores catalog synchronization. Advanced user experience services; e.g., promotions and customer services. Minimize costs of delivery, optimize pricing (dynamic pricing) for competitive advantage, consumer choice, and pricing value. Improved carbon footprint and CSR. Improved multi-sourcing and service integration.
Key Business Functions
Collaborative business supply-chain planning, integrated merchandise, store and assortment planning, advanced planning, allocation. Manage multi-brands, multi-country, cross-chain, cross-channel visibility of retail and wholesale. Multiple ERP integration to B2B hub.
Primary Actors
Supply chain planner, social network online consumer, offline consumer, market data aggregator services, data bureau
Secondary Actors
Product portfolio marketing manager, brand category manager, marketing campaign manager
Machine Actors
Online marketplace, social networks, stock RFIDs, supply chain planning app, big data aggregation and analysis, adapters, ERP
Key Technologies
Hand-held work instruction ruggedized device, B2B marketplace management platform, stock monitoring system/ERP, remote distribution management, RFID tracking, transport planning, ESB enterprise integration and messaging system
Main Scenarios
- Mechanize sales and stock data collection
- Analysis of sourcing and buying demand and supply
- VMI planning replenishment
Key Data
Master Data
Inventory-level data, notification event triggers, purchase orders, forecast
Current Observations Data
Point-of-sale events, competition price data, market availability data
Historical Data
Seasonal events, channels and suppliers network, social network trends preferences, financial exchange rates
Query Data
Actual observations and planned/historical analysis comparison
Action Taken Data
Thresholds of stock, change of supplier, target different customer groups/profiles
Real Business Examples
Booker and Coca Cola Enterprises (CCE) VMI
Booker and CCE have worked together on VMI projects for a number of years. The latest initiative, which is the third phase of the program, aims to identify the correct route to market proposition, that within cost delivers the right CCE SKU footprint through the Booker regional distribution center network. Using a paired store ordering solution, CCE can more effectively manage the volatility that is a common feature of the soft drinks supply chain. (Source: Booker and CCE – Supply Chain Analysis.)
UPS Logistics Cloud
Dave Barnes, UPS Chief Information Officer, spoke about the power of technology to drive logistics at the ConnectShip Technology Conference in Tulsa, Oklahoma. He said:
“In the UPS logistics cloud, customers don't have to waste precious resources on creating their own global network. They tap into ours. UPS has a long history of innovation and commitment to technology. In fact, we invest about $1 billion a year in technology – that's more than $100,000 an hour, 24/7, 365. Why? In our trucks and planes, UPS moves 5.5% of US GDP and 2% of global GDP. And what powers all of this around-the-clock movement is – you guessed it – technology. Logistics cloud.”
“Please indulge me as I take the data cloud concept familiar to all of you and turn it into a logistics cloud. This is a useful metaphor to describe our global capabilities and the trends reshaping logistics technology. Those trends are: mobility, visibility, scalability, and globalization. The logistics cloud provides customers with a way to tap into – anywhere, anytime – the power needed to more efficiently run their businesses. The logistics cloud lets customers streamline their global supply chains. The cloud makes it much easier and faster to share information about shipments with suppliers, transportation providers, and end users. Of course, costs are shared too, reducing the financial commitment of storing and accessing relevant data on-demand.”
“Who benefits from the logistics cloud? Certainly, global companies can more easily export and manage supply chains that often extend thousands of miles across oceans and continents. But the logistics cloud also empowers smaller firms. They gain the power to collaborate with suppliers, make more accurate delivery forecasts, minimize excess inventory, and avoid last-minute surprises.”
“In fact, one of the greatest advantages of the logistics cloud is that it serves as a business equalizer. It gives all companies access to the same powerful business resources and expertise. In the UPS logistics cloud, customers don't have to waste precious resources on creating their own global network. They tap into ours. For customers, UPS mobile solutions provide anytime-access to information through almost any mobile device. These tools provide immediate insight into the status of a shipment, making operations run faster and smoother.”
“It's only natural that people associate mobile technology with UPS. Why? They've seen the ubiquitous hand-held computers – what we call the Delivery Information Acquisition Devices (DIAD) – our drivers carry. What began 20 years ago as a bulky brown box with a monochrome screen has grown into a Windows-based sleek, lightweight hand-held device with a speaker, a microphone, an Intel processor, and multiple wireless communications options. You could call it the forefather of the smart phone. Our DIADs are instrumental in making it possible for UPS to track more than 15 million deliveries a day in more than 220 countries. With this one device, we eliminate 59 million sheets of paper a year.”
(See the UPS Logistics Cloud speech by Dave Barnes’ speech and the Logistics Management website.)
Nestlé and Tesco
Nestlé switches to vendor-managed inventory with Tesco. (See the Elaine Watson article.)
Additional Considerations
Existing Interoperability Standards
- RFID standards
- GPS tracking standards
- Mobile tracking device APIs (vendor standards)
- Master data content schema for specific industry transactions; e.g., chemicals industry, oil industry
- EDI transaction exchange standards (see the EDI Basics website)
Comments on Context
None.
Preconditions
- Partner relations with distributor, manufacturer, and outlet consumer is defined (VMI)
- RFID stock tracking
- Transport fleet tracking