Best Buy Change to Succeed. Making Technology Work for You

Transcription

1 Best Buy Change to Succeed Making Technology Work for You

2 We offer a Unique Customer Promise The latest devices and services Impartial & knowledge advice Competitive prices The ability to shop when and where you want Support for the life of your products

3 Best Buy has a Promising Multi-Channel Platform U.S. Digital Channel in FY12 Traffic:1 Billion U.S. Physical Stores in FY12 Traffic: 600 Million 70% of customers do research on bestbuy.com before buying in our stores 40% of bestbuy.com orders are picked up in stores 15% of pick-up orders result in additional purchase

4 Need for Change Multi channel design Stores are getting older, need for updates in various markets Concentrating on highest selling SKUs Evaluating space utilization

5 Current System Ship direct to store via TL, LTL, and airfreight Able to do some TL consolidation Contact with fixture vendors to discuss packaging and expected quantities If we have the opportunity, our team works with fixture design team on how items will be packaged.

6 Prior Experience Had some prior experience with various warehouses and models Franklin, IN warehouse Various Warehouse Management Systems Customer Centricity Project in California Smaller special projects

7 The Why Four large Markets were in the scope Rolling start date for stores within a Market Stores not able to handle 15 plus truckloads of fixtures Containers, cumbersome to utilize in project Multiple week implementations per store, anywhere from 6 to 10 weeks

8 The Challenge BBY Properties challenged the Transportation team with coming up with a solution. Their parameters: All fixtures in market Flexibility Quick turn-around Ease the strain on the stores being remodeled Reduce number of damages to fixtures

9 How We Started A great deal of analytics Three initial scenarios presented to Properties team Recommended a fourth, a Hybrid model, combination of the three proposed ideas Motivators Cost Capabilities Timeframe

10 What we needed-putting it all together RFP for carriers Warehousing capabilities Simple method for tracking Visibility for all cross functional partners - Field - Corporate - Carrier partners Flexibility

11 Putting the Pieces Together Selection of carrier(s) Warehouse locations in market areas Determine quantity from each Vendor by store and market Define reports we needed Putting the rules together for use of warehouse

12 Warehouses Vendors Stores

13 Building the Team BBY Transportation BBY Properties BBY GBS BBY Design Carriers, Koch Logistics, AGS, Logistics International Vendors, Fixtures and Graphics

14 Internal Processes and Systems Develop spreadsheet for Field and Corporate to use to track where shipments are in relation to their store No cross functional system available for use by all No funds to develop a system No time to develop a more complex solution Vendor coordination Order system flow

15 Challenges Multi-channel challenges Date changes at the stores, late notification Construction delays Permitting issues Inability to change the delivery date on orders Systemically Too many people trying to be in the warehouse

16 Challenges (continued) Communication Across multiple business channels Field to Corporate to third party warehouse Corporate to vendor Inventory, coming from CA for stores in TX that were running behind Fixture Vendor managed freight

17 What We Learned What we set out to do versus what actually happened Need for a Dedicated Field Deployment Manager coordinating with the warehouse facility Flexibility Need to put more controls on airfreight spend, both service level and quantity Need line of sight to vendor-provided items

18 Richfield, MN

19 Benefits (Hard and Soft) Truckload quantity shipping into warehouse Financial savings Overall freight cost reductions and better trailer utilization. Fewer damages of fixtures, if damaged identified earlier

20 Benefits, hard and soft cont. Quick view of inventory in warehouses Field Deployment Managers monitor inventory as projects were being implemented Allowed for Flexibility Field teams able to pull fixtures and parts as they were needed Changing time frames in implementation schedule Allowed for cleaner stores, no extra fixtures, no crowding, no moving items multiple times.

21 Benefits, hard and soft cont. Safety stock, bringing in extra parts for the most commonly used items Overrun parts Being sent to next market at the end of the project Eliminate waste and additional reorders and transportation costs. Some fixtures saved in market for additional projects. Reduces overall mileage, disposal of extra parts which helps BBY meet its sustainability initiatives.

22 Question & Answer Submit questions via Q&A Chat box on the lower right-hand side of your computer screen.