When your stores are this busy... Efficient replenishment is vital!
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- Shanna Greene
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1 When your stores are this busy... Efficient replenishment is vital!
2 Jula A fast growing DIY (Multimarket) chain offering an attractive assortment of products for DIY enthusiasts and professionals at low cost articles stores between to square meters 73 stores across Sweden (41), Norway (21) and Poland (11) Founded in 1979, in 2013 we turned over 430M and employed 2200 people Jula has grown rapidly, turning over almost 10 times more in 2013 compared to 2003
3 Jula s history 1979 Founded on a Swedish farm as Jula Industri Ab 1995 Jula has 100 employees, 3 stores and 17.4m turnover 2004 Central Warehouse construction begins in Skara 2008 Jula has 1000 employees, 28 stores, 170M turnover 2008 Jula launches into Norway 2011 Jula opens in Poland 2012 Jula has 2000 employees, 59 stores, 370M turnover 2013 Jula has 2200 employees, 67 stores, 430M turnover
4 Central warehouse in Skara 2014 One of the biggest in Sweden 108,000 square meters 13,500 active products 120,000 storage locations 50 loading bays Approx. 130 employees and 130 fork-lift trucks 6,000 containers handled each year 20,000 order lines picked every day Approx. 250,000 units / 1,000 pallets per day
5 Central warehouse in Skara 2015 The biggest in Sweden 150,000 square meters 200,000 storage locations 70 loading bays Approx. 170 employees and 150 fork-lift trucks
6 Jula manages a challenging equation A strong expansion with entry into new markets Long lead times in purchasing (from days) Ever-changing assortment and demand (around 3000 new) More than 3500 promotional article each year. 26 Leaflet each year, with a majority of sales in the first 3 4 campaign days. Significant amount of seasonal products. Constant assortment, allocation & replenishment challenge
7 Project Smart-replenishment = pro-active, consumer-driven, forecast-based replenishment The project s visions and goals: 1. Better control over the whole supply chain from supplier to consumer with a common process and system support 2. Create a supply chain that can accommodate and respond to our high growth rate 3. High service level, Right amount of the right product in the right place at the right time. Manufacturer Transport Storage Transport Store Consumer
8 Project organisation Jula wanted as broad a representation as possible to reflect the complexity and breadth of the project s impact Project participants came from: store management, store development, logistics, IT and purchasing. Project leader from the purchasing team The steering group consisted largely of Jula management Project owner Magnus Sigurd, Purchasing Director
9 Replenishment: a key process Efficient replenishment supports our value proposition Minimise empty shelves Optimise inventory levels Cost efficient supply chain Challenges in the previous way of working Stores min-max order parameters did not reflect actual demand and parameter maintenance required a great deal of administrative work in the stores Stores ordered too much from our warehouse Difficulties in managing seasonal products to ensure having them in the stores at the right time Insufficient integration between the flow of goods to stores and purchasing to the central warehouse
10 Re-organisation of Purchasing As a part of the project, all our replenishment and purchasing related resources were organized within one supply chain team Supply chain team Business team Purchasing management team Ensures efficient replenishment from the supplier to the store shelf. Owns the product and has complete responsibility of the business. Leads the department Evaluates, develops and supports the business and replenishment processes. The guiding principle is to streamline tasks to ensure focus
11 Project plan Project start March 2013 Preparations for go-live May 2013 Pilot in stores August 2013 Central warehouse go-live Dec Roll-out to stores starts January 2014 End of project September 2014 Start of project Technical integration Data analysis Training Training Master data validation Acceptance tests Car&Garage in four pilot stores Purchasing the whole Jula assortment to our central warehouse Gradual roll-out: one category per month In May, 6 of 8 categories active in RELEX Break during the holidays Category 7 & 8 roll/out Evaluation Additional optimisation of inventory levels in the warehouse and stores After extensive discussions we decided to roll-out one category at a time to all stores (total 8 category) The benefit was that we had time to learn how to manage each category in a controlled way The disadvantage was that some system features could not be used until the roll-out was completed (e.g. the use of capacity limits) Looking back we remain confident we chose the right roll-out strategy!
12 Promotional campaigns 1(2) Jula is a very campaign-driven company with direct mailshots two times per month in three countries with, on average, 150 products per mailing. We have high saving effect for the costumer. Sales peak fast and the majority of sales happen during the first 3-4 campaign days The challenge is to allocate campaign volumes optimally between stores and to replenish large volumes quickly
13 Promotional campaigns 2(2) We have, with the help of RELEX, reached a high degree of automation in replenishment before and during campaigns To optimise our sales, we send out ~80% of products before a campaign starts and use the remaining 20% to replenish those stores with the strongest sales As campaigns are frequent and involve a variety of products with different campaign effects it is still a challenge to get the volumes right This is an area that we are further developing in cooperation with RELEX
14 Lessons learned Information and training is extremely important! Key messages have to be repeated At the heart of both our challenges and our successes is the cooperation between teams and departments. It s a tricky operation that we are running! The quality of master data is extremely important. Work on processes and rules is needed in order to not to get lost in micro-management Another challenge has been to ensure that our stores look good and sell well and don t just concentrate on the logistics and numbers
15 We have had challenges and enjoyed successes and there is still huge room for further development! By using RELEX we have a powerful and effective tool for the ongoing optimisation and integration of our whole supply chain Thank you!
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