RESHAPING MERCHANDISE STRATEGY AND PLANNING. Eduardo Smaniotto Senior Buying & Logistics Director
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1 RESHAPING MERCHANDISE STRATEGY AND PLANNING Eduardo Smaniotto Senior Buying & Logistics Director
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3 SUMMARY Company and Market Overview The Importance of Planning in the Industry Catalyst for Change Technology as an Essential Component The Implementation Before and After Warehouse Management System Key Recommendations / Lessons Learned Next Steps and Expectations
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5 MERCHANDISE STRATEGY & PLANNING IN FOOTWEAR RETAIL IN BRAZIL
6 MERCHANDISE STRATEGY & PLANNING IN FOOTWEAR RETAIL IN BRAZIL
7 MERCHANDISE STRATEGY & PLANNING IN FOOTWEAR RETAIL IN BRAZIL
8 MERCHANDISE STRATEGY & PLANNING IN FOOTWEAR RETAIL AS IT SHOULD BE
9 MERCHANDISE STRATEGY & PLANNING IN FOOTWEAR RETAIL AS IT SHOULD BE
10 MERCHANDISE STRATEGY & PLANNING IN FOOTWEAR RETAIL AS IT SHOULD BE
11 THE IMPORTANCE OF PLANNING IN THE INDUSTRY Sourcing Domestic Imported Product Available Needs to develop Volume Small orders possible Need big orders Weeks Supply OH 18 wks average, targeting wks average
12 WHAT IS MERCHANDISE PLANNING?
13 Merchandise Planning is a systematic approach aimed at maximizing return on investment, through planning sales and inventory. It does this by maximizing sales potential and minimizing losses from markdowns and out of stocks. Tech Trader Magazine, June, 2010
14 CATALYST FOR CHANGE Structure to support growth - lack of visibility Need one number of the truth to drive the business Logistics, buying and financials- wasted time debating the number, miss efficiencies No standard on reporting People driven process personified style Create stability in the business with planning
15 TECHNOLOGY AS AN ESSENTIAL COMPONENT Information intensive industry Low margins Optimization of time, space and product Release capital investment- holding more stock than you can afford for fear of out of stock Analytical approach to promotions to take the discount at the right time to maximize the margins
16 TECHNOLOGY AS AN ESSENTIAL COMPONENT Complexity: 4 different store brands 7 departments 52 categories 132 sub-categories 89,000 SKUs Why Oracle?
17 WHY ORACLE? Source: Gartner (August 2015)
18 THE IMPLEMENTATION IT Project Manager Business Project Manager Top Executive Sponsor Logic - Oracle Partner HR Figure: Evolution Project Team Structure
19 DO NOT CUSTOMIZE!!
20 PROCESS MAPPING AS IS SHIPPING AS IS CANOAS
21 PROCESS MAPPING TO BE SHIPPING TO BE - ORWMS
22 BEFORE & AFTER MERCHANDISE FINANCIAL PLANNING (MFP) Before No ONE NUMBER Individual Spreadsheets Endless meetings High Inventory levels - no future vision No weekly control on purchases Buyers holding merchandise power After ONE NUMBER Standard on reporting and planning Weekly meetings by departments 25% inventory reduction with weekly projected inventory levels Weekly OTB management Planners on structure equivalent as
23 Warehouse Management System Replaced solution homemade Too much customization in existing tool Move toward integrated solutions for Warehouse and Planning Project connects 2 warehouses in different locations Stock levels in WH have not changed much Inventory accuracy achieved Reduced losses in warehouses by 1/3 Last warehouse implementation done by Paqueta Now 100% vanilla Well trained team by the partner
24 KEY RECOMMENDATIONS Process: map out the right processes completely before you start technology implementation Vanilla: do not customize, trust the best practices build into the solution Mission: align all lines of business toward a common goal Communication: involve your HR department to ensure consistent and constant communication Talent: hire a partner who will transfer information and set you up for future success, align the right talent with help from HR
25 SO... Merchandise Financial Planning fully implemented and integrated within the company process Warehouse Management System implemented in two warehouses. NEXT STEPS... Assortment Planning and Clearance Optimization Engine just implemented and being adjusted Looking into other modules (2-3 year horizon)
26 2016 target improve margin and sell through. No further reduction on inventory. Sell thru: % % %
27
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