CASE STUDY. How a Global Retail Giant Gained Real- time, End- to- End Supply Chain Visibility with Vitria Operational Intelligence AT A GLANCE

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1 How a Global Retail Giant Gained Real- time, End- to- End Supply Chain Visibility with Vitria Operational Intelligence AT A GLANCE INDUSTRY Retail CHALLENGE Poor end- to- end visibility into its supply chain limited this retail giant s ability to continuously track and immediately respond to supply shortages and missed shipments that impacted customer satisfaction and revenue. The retail giant wanted to gain real- time end- to- end supply chain visibility to keep pace with its staggering growth. SOLUTION Vitria OI helps this retailer continuously track orders and shipments as they move across an array of siloed ERP systems and other IT applications, from suppliers to distribution centers to store locations. RESULTS The retailer was able to: Respond to shortages and delays in real- time through automated alerts and processes Tag and continuously track priority orders Decrease costly emergency replenishment processes Wanted: A Supply Chain that Keeps Pace with Growth With operational costs rising and sales declining, this retail giant realized that its supply chain wasn t keeping pace with its staggering success. The company has one of the most complicated supply chains that manages the flow of merchandise sourced from all over the globe and delivered to more than 15,000 retail stores that serve over 50 million customers in 60 countries each week. With new stores opening at a rapid rate across the globe, the company recognized that it needed to get a better grasp on its supply chain to keep up with that expansion. They were determined to measure their success from the outside in rating the performance of their supply chain from the store back to their suppliers. The Reality: Siloed Systems Limit Supply Chain Visibility An initial assessment of how their supply chain was serving their stores revealed that less than half of store deliveries were arriving on time. With so many different products being shipped around the world, getting transportation, distribution and logistics under control presented a huge challenge for their supply chain group. With over 70,000 deliveries a week and thousands of inbound shipments from around the world, it was next to impossible to get a clear picture of all incoming and outgoing goods. The company generally ships ingredients from Latin America, Africa, and Asia to the United States and Europe. These ingredients are trucked to multiple sites where they are processed and the finished product is then trucked to five regional distribution centers (DCs) in the U.S., three of which are operated by third- party logistics companies (3PLs). In addition to their core product, many other products required by their retail outlets including furniture, dairy products, baked goods, and paper items like cups and napkins are delivered to these warehouses. The company also has over 30 smaller warehouses called central distribution centers (CDCs), operated by 3PLs that combine the core product with other products like dairy products, baked goods and paper items to make multiple deliveries via dedicated truck fleets to the company s own retail stores as well as other retail outlets that stock the company s branded products.

2 The challenge lay in being able to track these orders and shipments as they moved across an array of siloed ERP systems and other IT applications, from suppliers to distribution centers to store locations. When dealing with hundreds of fresh ingredients and thousands of order variations, delayed shipments, shortages and even overages can result in significant losses in revenue as well as unhappy customers. Previously, shipment priorities such as stock replenishment and promotional products for the holiday season were communicated using spreadsheets. The planners, distribution center and transportation personnel did not have a single view of the order priorities. The need of the hour was for a solution that would give them real- time, end- to- end visibility across their global supply chain, enabling them to respond to shortages and missed shipments that could impact new product introductions and store rollouts, their customer experience, and in turn, revenue. The Solution: A Highly Responsive Supply Chain with Vitria Operational Intelligence The team evaluated several options including the possibility of leveraging their existing ERP systems as well as developing a solution in- house that would help them track- and- trace orders and shipments across the value chain. However, each of these options required extensive development efforts and the ongoing cost of maintaining and further customizing what was developed made these approaches less attractive. They then evaluated Vitria s Operational Intelligence (OI) solution. They were quickly able to ascertain that the solution would help them continuously monitor the progress of fresh ingredients and other order items through their end- to- end procurement process and immediately respond to issues and delays. Vitria OI lets them establish a process monitoring layer that tracks the progress of every activity in the procurement process. Stakeholders are immediately made aware of delays at any particular step in the process so that they can course correct. The new system tracks the time taken to approve a purchase order (PO), communicate the details with a supplier, get an expected receipt confirmation from a distribution center, receive a shipment notification, confirm receipt at a distribution center, update the corporate system, as well as close the PO. Each line item on the PO is monitored continuously by receiving and correlating events from various systems that are indicative of a line item completing a step in the lifecycle. The system generates notifications and alerts when an event is not received which results in an established service level for that milestone being violated. HOW A GLOBAL RETAIL GIANT GAINED REAL- TIME, END- TO- END SUPPLY CHAIN VISIBILITY WITH VITRIA OPERATIONAL INTELLIGENCE 2

3 Gaining End- to- End Supply Chain Visibility with Vitria OI Using Vitria OI, the company s corporate procurement personnel now have real- time insight into bottlenecks and delays and they are immediately alerted to issues related to specific orders so they can take appropriate action to remedy the situation. In addition to monitoring orders related to replenishing supplies, the company s procurement team tracks and traces all the orders related to building out new stores from fresh ingredients to light fixtures! The procurement team has been able to easily define and track service level agreements (SLAs) with each of their suppliers and get alerted when established thresholds are in jeopardy or exceeded. Key Benefits from Vitria Operational Intelligence for Supply Chain Visibility Easily track purchase orders across multiple siloed ERP and other IT systems from suppliers to distribution centers to store locations Continuously monitor the progress of orders and reroute shipments to prevent stock- outs Easily track shortages and overages in received quantities Get immediate alerts on delays to high priority, seasonal products Get alerts if receipt of goods are scheduled on non- work days for a specific distribution center and immediately take action Decrease costly emergency replenishment processes HOW A GLOBAL RETAIL GIANT GAINED REAL- TIME, END- TO- END SUPPLY CHAIN VISIBILITY WITH VITRIA OPERATIONAL INTELLIGENCE 3

4 The procurement planner s dashboard includes a visual process map of the end- to- end PO lifecycle with traffic light indicators for each monitored step in the process, along with a panel that lists the exceptions that warrant the planner s immediate attention. A planner can immediately drill down into specific line items in the PO that are putting an SLA in jeopardy. Planners can drill into the specific line items that put an SLA in jeopardy Procurement planners can easily interact with the system and mark specific orders as high priority - for instance, for stock replenishment or promotional products for the holiday season. They can tag items as Never Out or Hot items so they get prioritized and get moved to the top of the dashboard. These orders are flagged as priority within the dashboards used by the distribution center and transportation personnel as well so that they know they must offload these items first. Subsequent orders can also be automatically flagged as part of the same promotion or with the same level of priority. Planners can mark specific orders or line items as high priority HOW A GLOBAL RETAIL GIANT GAINED REAL- TIME, END- TO- END SUPPLY CHAIN VISIBILITY WITH VITRIA OPERATIONAL INTELLIGENCE 4

5 Subsequent orders are also flagged as high priority Planners now have better visibility into supplier performance by timeliness and accuracy of delivery. The company s supply chain group has established clear productivity metrics with its partners, primarily based on on- time delivery and order fill rates. For instance, if a 3PL managing a distribution center picks up a product accurately it earns points; if they miss a pallet in a shipment, they lose points. A metrics- driven approach increases transparency and results in greater focus on the end goal improving the experience for their customers. Suppliers and partner performance can be continuously monitored Supplier performance on high priority orders can be continuously monitored HOW A GLOBAL RETAIL GIANT GAINED REAL- TIME, END- TO- END SUPPLY CHAIN VISIBILITY WITH VITRIA OPERATIONAL INTELLIGENCE 5

6 In addition, using Vitria OI, the company was able to uncover actual supply chain patterns, analyze these processes and arrive at an optimal path. The uncovered insight is helping them further refine their service level targets for every step in the procurement process so that they can eliminate bottlenecks and curtail costs worldwide without compromising service delivery. Summary Vitria OI provides this retail giant with a unified platform that delivers continuous insight into their supply chain processes. It continuously monitors the progress of purchase orders across multiple ERP and other IT systems from suppliers to distribution centers to store locations and immediately alerts key stakeholders to shortages, overages, and delays in shipment to take corrective action so that it does not impact their customer s experience in stores. Planners, distribution center staff and transportation personnel have a single view of high priority orders and no longer have to rely on spread sheets to communicate priorities. They now have a system that gives them visibility into supplier performance by timeliness and accuracy of delivery. About Vitria Vitria Technology, Inc. provides the industry s leading Operational Intelligence platform, empowering partners and customers alike to develop innovative operational intelligence solutions to analyze streaming big data, complex events, and business processes in the proper context and take real- time action. The result is faster, better decision- making. With a rich heritage as a BPM technology pioneer, Vitria s award- winning process integration solutions provide the backbone for many Global 2000 companies mission- critical business processes. Vitria has customers in North America, South America, Europe, Asia and Australia. To learn more about Vitria, please HOW A GLOBAL RETAIL GIANT GAINED REAL- TIME, END- TO- END SUPPLY CHAIN VISIBILITY WITH VITRIA OPERATIONAL INTELLIGENCE 6