From Strategy to Implementation in Logistics Optimization Sonae MC
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1 From Strategy to Implementation in Logistics Optimization Sonae MC 19th June 2017
2 Sonae MC belongs to Sonae group SONAE MC SONAE SR SONAE RP SONAE IM SONAE SIERRA NOS Food Retail Specialized Retail Retail properties Investment management Shopping Centers Telecommunications 100% 100% 100% 16% % 50% 24.4% Core Businesses Related Businesses Core Partnerships 2
3 Is the market leader in Portugal with it s 3 major brands for food retail 252 stores Hipermarkets Supermarkets Proximity Supermarkets 42 stores in privileged locations 130 stores in medium size population centers 80 stores in urban centers and high growth locations 3
4 But is also present in other retail areas Mini-markets Stationery, Bookstore, Gifts Parapharmacies Cafetarias 250 stores all over the country 33 stores all over the country 200 stores all over the country 118 independent locations or together with Continente stores...and much more Smaller or new formats (e.g., ZU) Online format of the presented Brands New markets like B2B with Continente Negócios 4
5 Sonae MC network is built in 2 logistics zones 1 Food and DIY 2 Food 1 3 Non Food 4 Codfish Fresh fish Meu Super Frozen Wells 9 Food and Non Food 5
6 We are more than people in logistics General Characterization per
7 That work hard every day to fulfil our customers Productivity Indicators (*) per per per Deliveries/ 10 TON per 17 per 7
8 From Strategy to Implementation in Logistics Optimization Innovation Trends New technologies Don t forget to do the basic well 8
9 Implementing using two different methods Projects & Continuous Improvement project C.I. 9
10 Our strategic process finishes in assuring that benefits appear in the P&L Objetivos Strategic Pillars Projects Prioritizaton Execution plan Execution Benefits control Requisitos de Negócio 10
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12 A home for our strategy obeya room!
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18 An example - Improving a Supply-Chain Otimização da Supply-Chain do DIY 18
19 We worked in 3 supply-chain areas A Stocks Stock position model B Distribution center Layouts Picking process C Transports Transport model 19
20 Due to high leadtimes our stock level was high A Stock management model* Before After LT = X LT = X 3d LT = 3d 3 PBS 7 sup PBL 281 sup PBS 103 sup PBL 173 sup * European suppliers 20
21 In order to reduce these high leadtimes to fulfil the stores, we centralised stock in DC A Main Actions Change from PBS to PBL for 62 fornecedores (763 Stock 100 = before project % 75 SKUs) according to TCO (total cost of ownership); Before After Changes in storepacks, with focus in increasing PBU according TCO SL to stores (%) +24% Before After 21
22 We redesign our warehouse layout in order to receive the new SKU s centralized B Macro Layout Before After Main changes +20% area increase +50% stocking capacity 22
23 Each area and SKU was assigned to the best positon in order to facilitate the picking process B Macro layout Layout Antes Depois PBL area after PBL area before Offices eliminated New racks area 23
24 Due to the non standard dimensions of some SKU s we re-invented some racks structures in order to free floor B Micro layout Micro Layout Extra large post pallets Double racking Farming tools containers Large pallets support Non standard SKU s Floor space free 24
25 And implemented voice picking to speed up picking process B Main Actions Changes in microlayout: voice picking implementation Productivity 100 = before project % 125 automatic stock down process Before After 25
26 We identified waste in our transport model C Transport Model Before After Dedicated trucks x trucks Cost = y /km Dedicated Trucks Price per Trip Waste: returns in empty. Low flexibility for peak periods Low hourly occupation z trucks Y /km 1,4Y /km 26
27 And implemented actions to reduce it C Main actions 66% reduction in dedicated trucks. Change transport model for one-away trips outside DC region Transport Cost 100 = Before project % 82 Before After 27
28 We worked in 3 supply-chain areas bringing benefits for customer A Stocks -25% in stock* +25% in SL B Distribution center +25% in productivity C Transports -18% in costs * Final stock level better than international benchmark 28
29 Don t forget to do the basic well Innovation Trends New technologies Don t forget to do the basic well 29
30 Thank You! 30
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