Plan Ready: The power of knowing What if

Transcription

1 Plan Ready: The power of knowing What if

2 SUPPLY CHAIN PLANNING at By Anders Gjerde 2

3 Who is Blackhawk Network Blackhawk was founded in 2000 and started as a division inside Safeway We are a leading prepaid payment network that is a program manager and distributor of prepaid products: Gift Cards Telecom Top Up and Handsets Visa, Amex and MasterCard Gift General Purpose Reloadable Visa Incentive - B2B & B2C Loyalty & Rewards Proprietary integrated technology supports over 300M transactions yearly In 2013 Blackhawk Network went Public and is trading under the NASDAQ ticker symbol HAWK 3

4 We grew a Company & Industry at the same time! Convenience Access Selection Variety Over 180,000 active global retail distribution locations Connected with top digital retailers Over 650 leading brands Fashion, dining, travel, debit, telecom, digital content, entertainment and more Physical & Digital 4

5 Our Prepaid Journey 3 rd Party Gift Card Malls in Brick & Mortar Expanded Gift Card mall Internationally Created GiftCard Mall.com egifts Offered Online & Mobile Expanded European Offering Paperless Rebate & Incentives Launch of new incentives division rd Party Prepaid Visa Gift Card in Retail Prepaid Telecom & Prepaid Handsets Entered the Secondary Market for Gift Cards Created a Wallet for Gift Cards B2B corporate incentives and consumer promotions Customized Consumer & Employee Incentives Employee engagement & recognition Platform 5

6 Leading Global Retail Presence in 22 countries Canada UK Sweden China U.S. France Japan Netherlands Mexico Germany South Korea Brazil 47K Australia South Africa 6

7 Our Supply Chain Planning Journey Work as hard as you can and hope it all works out! Islands of Analysis X-Functional Process Manual Forecasting & Planning Some Metrics & Reporting Engaged Steelwedge More Systematic Metrics & Reporting + Digital/Online Planning (Manual) First Full Year w/steelwedge More Process Improvements + International & New Business in Steelwedge Collaboration in Steelwedge Communication Reports & Metrics Exception- Driven More Proactive 7

8 Why Steelwedge? We needed scale Limited by Excel & Outlook hell Each planning cycle a herculean effort Stale Data Reduce need for additional headcount Business was growing fast More proactive Inventory Management Enable faster time-to-market More accurate allocation We needed flexibility We are different We needed Experience We needed someone who appreciates different 8

9 What makes us Different? What to Sell What Business Are We In? Where & How Relationship Management Budgets & Goals Performance Content Partners Planning Distribution Partners Stores, POGs & Allocations Performance Warehouse Inventory Fulfillment Card Activations 9

10 Scope of Steelwedge System What to Sell What Business Are We In? Where & How Budgets & Goals Performance Content Partners Planning Distribution Partners Stores, POGs & Allocations Performance Warehouse Inventory Fulfillment Card Activations 10

11 New Forecasting System SUPPLY EXECUTION DEMAND Products Offered Annual Plan Channels & Markets Goals & Plans Performance to Plan CP Sales Recommendation CP Feedback Fixtures Prod Mix Recommendation DP Feedback DP Sales CP AM Assumptions SOQ Approvals Card Orders Performance Metrics Forecast Demand Approvals DP AM, Mktg Inbound Qty s Predictive OOS Inventory Allocations Available Supply POG Promo Allocation Consumption Replen Warehouse Inventory Store Inventory Adjustments Available Inv Demand DSD, Bulk & B2C Orders Shipments Sales & Store Inventory Store Execution Shipments, Whse Inventory Deplete Inv Drive Sales Shipment Store Sales Content Activity Metrics Customer Support

12 Winning in a Relationship Business Trust Partners must trust us to run the business with their interests in mind With VMI we still need to account for: Maximize Each Partner s Revenue while controlling costs Plan-o-Gram resets twice a year fall and spring Frequent changes in artwork, branding, denominations & legal language Promotional activities Fewer print-runs to minimize cost Competence Partners must believe we have the skills and technology to do a superior job Transparency Continuously convince partners the above is true 12

13 Detail Forecast Shared with Partners US has 40,000 forecast details that Partners review line-by-line 13

14 More Blackhawk Differences - Forecasting Detail Level Forecast & Frequent Changes = Many Forecasts with Short Data History Statistical Forecasting didn t work for us! Stat Fcst Good Forecast 15,000 Zero Forecast (No Forecast) 22,000 Non-Zero Bad Forecast 3,000 Total Forecast Records 40,000 14

15 Developed Our Own Forecast Method How can we mass-generate NPI Forecasts? How can we leverage key knowledge of our Business? How can we leverage even just a little data? Can we do it in Steelwedge? Basic Forecast Construct: Seasonality is very consistent YOY Given this, we don t need much history to create an Annual Forecast And so.. Monthly Forecast = Annual Forecast * Monthly Seasonality % 15

16 Forecast Logic 12 Months Sales History? No 4+ Months Sales History? LAST RESORT Yes No NEXT Seasonality & Forecast Qty from Index Seasonality from Index; Forecast Qty from own history FIRST CHOICE Yes Forecast & Seasonality from own history Product Index Product Index Value Product 1 Product 3 80% Product 2 Product 3 40% Customer Index Customer Index Value Customer 1 Customer 3 60% Customer 2 Customer 3 120%

17 Index Forecast Example Forecast New Product EJ s Café $25 in New Distribution Partner USPS (United States Postal Service) EJ s Café $25 is indexed to Applebees $25 USPS is indexed to Safeway Safeway sold 2,500 units of Applebees $25 last 12 months Index Forecast Qty: 2,500 * 80% * 60% = 1,200 Seasonality calculated as % sales for Applebees $25 in Safeway last 12 months: Monthly Forecast Qty: May=1,200*8% = 96 Dec=1,200*37%= 444 Seasonality Applebees $25 in Safeway Product Index Product Index Value EJ s Café $25 Applebees $25 80% Customer Index Customer Index Value USPS Safeway 60% 17

18 New Forecast Logic Results Stat Fcst New Method Good Forecast 15,000 37,000 Zero Forecast (No Forecast) 22,000 1,500 Non-Zero Bad Forecast 3,000 1,500 Total Forecast Records 40,000 40,000 18

19 Steelwedge Benefits.....So we will be more thinkers and less doers.. Eliminate time spent aligning disparate data Faster turn-around and more dynamic Planning and Card Order Process E.g., we can trigger new card orders when inventory goes below certain thresholds or future demand increases between cycles Better engage functional areas outside our operations organization in the Demand Forecasting process Automate push/pull of data between functional areas (to drive the process) Create and publish Reports and Dashboards

20 Secondary Benefits New Opportunities What else can we re-evaluate now? Global Partners like Google and Apple can leverage a comprehensive plan vs. a country-by-country plan Load-Balance bottlenecks created by two card order & reset cycles a year work: Product Development Manufacturing turn times Supply Chain and Warehouse Distribution Fixture Reset Plans Merchandising Schedules 20

21 Dynamic Planning enables Load Balancing Before Steelwedge Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec SOQ R2 R1 DP Resets R1 R2 After Steelwedge Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec SOQ R2 R1 DP Resets Each DP 1 or 2 Resets/Year

22 Challenges Post Steewledge Distributed Process in a Matrix organization Need to maintain clear roles and responsibilities Data Automation Easy to overlook need for on-going data quality monitoring Deploy New System while running the business Make transition smooth for business partners Keep team work-load manageable Maybe we should have opted for Not-So-Rapid Implementation? 22

23 Where do we go from here? Build a solid Roadmap and Plan Collaborate & Communication via Alerts and Reports Allocations and Proactive OOS Focus on other revenue opportunities Digital & Handset International Expansion 23

24 Thank YOU!