CPFR Case Study: Liquor Control Board of Ontario. Craig Miller, Team Leader Supply Chain LCBO

Transcription

1 CPFR Case Study: Liquor Control Board of Ontario Craig Miller, Team Leader Supply Chain LCBO

2 Improving Product Flow

3 Agenda Business Environment The Challenge The Solution Barriers to Collaboration CPFR Results Questions 3

4 Business Environment New Retail Strategy Renovated stores More dynamic product assortments Innovative merchandising programs and displays Enhanced shopping experience Positive consumer response 4

5 LCBO Sales Revenue / / 00 00/ 01 01/ 02 02/ Year Plan Actual Sales 5

6 Business Challenge Success of retail strategy strained the supply chain Uncertainty of demand Unreliability of supply Warehouses pushed to capacity Inventory turns declined to 8.5X On-Time Delivery Rates fell In-Stock Position weakened 6

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8 Business Challenge Increasingly complex supply chain Consumer tastes were changing Product portfolio expanded Procurement from 68 countries on five continents Long lead-times High number of touch points 8

9 Supplier Freight Forwarder/Consolidator Port Ship Retail Port Durham Warehouse Pickup & Delivery Terminal Rail 9

10 Business Solution Supply Chain Project Team Reports to Steering Committee Mission Statement To build Supply Chain innovative solutions that improve product flow across a network of partners collaborating efficiently and effectively Role Build workable solutions Turnover to end users 10

11 Communicate everything you can to your partners. The more you communicate, the more they will understand. The more they understand, the more they will care. ~ Sam Walton 11

12 Business Solution Research Industry Best Practices Modeled our solution after VICS CPFR process standardized scalable repeatable 12

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14 Business Solution Developed and implemented a Collaborative Planning, Forecasting and Replenishment Solution Fully integrated and automated Customized for LCBO Suppliers were an integral source of input throughout the development phase piloted with 6 suppliers 2005 expanded to 21 suppliers representing 34% of the business 14

15 Business Solution Information Sharing with Trading Partners Automated, weekly transmissions Provides suppliers with visibility to sales, inventory and open purchase orders 15

16 Business Solution Promotion Planning Develop an 18 month promotional plan Themes, dates, and promotional details Benefits Suppliers develop more impactful promotional plans Share more market / channel information 16

17 Business Solution Sales Forecast Create two forecasts Document assumptions (forecasts will always be inaccurate) Identify and resolve exceptions Consensus forecast Benefits More accurate forecast of promotional lift Understanding of assumptions facilitates resolution Improved understanding of the impact of promotions 17

18 Business Solution Order Replenishment Visibility to a rolling 52 week order forecast Benefits Improved operating efficiency Asset utilization 18

19 Business Solution Benefits ( continued ) Supplier Production planning Material requirements planning Reduction in raw material and finished goods inventory LCBO Shorter lead-times Reduced safety stock levels Improved on time delivery, order fill rates 19

20 Business Solution Performance Assessment Supplier Scorecard Quarterly Reviews Supplier Performance Reports Sales & Order Forecast Templates 20

21 Business Solution Forecast Metrics WMAPE (Weighted Mean Absolute Percentage Error) Value Added Forecast Indicator Tracking Signal Inventory Metrics Week s Supply On-Time Delivery Order Fill Rate Lead-Time 21

22 Business Solution Supplier Communication & Review Receive quarterly update on key performance metrics Suppliers supported regular feedback and was viewed as beneficial Sets benchmark and provides incentive for improvement Identifies problems 22

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24 Barriers to Collaboration Trust Open to share key information Commitment Dedicated supply chain resource Get beyond the Account Manager Operational level Cost Complexity 24

25 LCBO Results WMAPE 95% 90% 85% 80% 75% 70% 65% 60% Forecast Accuracy 25

26 LCBO Results Increased Inventory Turns Pre-CPFR

27 LCBO Results Improved In Stock Position Improved Order Fill Rate Improved On-Time Delivery Improved GMROII Improved Customer Satisfaction 27

28 Questions 28

29 Contact details GS1 Canada 1500 Don Mills Road, Suite 800 Toronto, Ontario M3C 1V9 Education Centre Help Desk: ext