Scan Based Trading a Case Study Wholesale Distribution Industry Anir Bhattacharyya Industry Thought Leader Agenda Wholesale Distribution Market Challenges & Trends Scan Based Trading Challenges What is SBT? Solution Approach and Design Case Study Benefits Q&A Appendix 1
Wholesale Distribution Trends & Challenges Trends 1 2 Distributor Consolidation Grow Geographically Additional Demands for Services Differentiate from Competition Challenges 1 2 Procure to Pay Efficiencies Financial Visibility and Control Order to Cash Effectiveness Kitting/Assembly/Configuration Non Stock Order Management Online Line Transaction Enablement Manage Inventory for Customers 3 Contract Price Growth Optimize Cost Recovery 3 Rebate and Chargeback Management Detailed Profitability Analysis Contract/ Agreement Management! HIGH LOW C U R R E N T P A T H Not Responding Equals: Loss of Revenue Increase in COGS Increase in Operating Expenses Lower Margins Scan based Trading Business Challenges Multiple Sales Channels, Increasing Customer Power and the Need for Instantaneous Information are shaping the Wholesale Distribution Sales Landscape. Increasing pressure from larger retailer customers to move to a Scan Based Trading model of doing business Each SBT retailer had unique, customer specific requirements Store conversion between scan based and traditional Syndicated data requirements Store rollout schedules EDI exchange frequency and schedules Client/Organization needed to maintain the standard order processing, shipping and inventory management for non SBT customers Same Truck will carry Invoice Orders to End Customers and Non Invoice Orders to SBT Customer Stores 2
What is Scan Based Trading? What is Scan Based Trading? Scan Based Trading (SBT) is defined as the process where suppliers maintain ownership of inventory within retailers' warehouses or stores until items are scanned at the point of sale. Typically, Scan Based Trading programs use EDI solutions as the key component to synchronize information between a retailer and its Scan Based Trading suppliers.» 832 Catalogs» 852 Product Activity Data (POS)» 810 Invoice» 820 Payment Advice Understanding SBT Selling Organization Inventory View Inventory Organization Inventory Transfers Sub Inventories Product ships from warehouse to customer store 3
Scan Based Trading Solution Approach Leverage Oracle Applications Products Design business processes for Demand Planning, Supply Planning, Order Fulfillment, Warehousing, Shipping and Logistics, EDI, etc. Developed Technical Objects and made them sit on top of Oracle ERP Product lines Template Solution Sets Easily fits on top of any Enterprise Resource Planning Business Accelerator package Integrates Distribution and Retail Industry SBT Solution Scope Retail store to store transfer Process to perform GL write offs for spoilage Auto receipt at customer stores or RDCs from warehouses Standard UOM Eaches Pi Private labeling lbli Average costing for inventory valuation Demand planning for forward buying Pricing and invoice dates processing Floor planning for retail stores and letdowns 852 product activity transactions Cycle counts Returns from stores back to distribution stores Returns from consumers Process corrections Period close process 4
Client Distribution Plus, Inc DPI is a billion dollar specialty food distribution company that distributes over 55,000 different gourmet, organic and ethic line items from five continents. Their combined facilities offer in excess of 43 million cubic feet of warehouse space across the country, almost half of which in climate controlled. DPI is an integral part of the worldwide holdings of the Irish Dairy Board Co Op Ltd. Based in Dublin, Ireland. Industry Location CPG / Distribution North America 9 DPI s Challenge Business Perspective Increasing pressure from larger retailer customers to move to a Scan Based Trading model of doing business Each hsbt retailer til hd had unique, customer specific requirements Store Conversion along side new store openings Data requirements Rollout schedules EDI exchange frequency and schedules DPI needed to maintain the standard order processing, shipping and inventory management for non SBT customers Trade Management VMI EDI 10 5
Copyright 2011 Fujitsu 8/28/2012 Store Operations Stock Movement Distribution Center Stock Transfer Orders Store / Franchisee Ordered Merchandise Copyright 2011 Fujitsu Physical Inventory Counting (Cycle Count) counting articles Store inventory result Head Office inventory xxx xxx =? book inventory physical inventory count PDC inventory count 6
High Level Solution 13 Benefits : Scan Based Trading Increased Sales Improved Retailer Relationships Improved visibility of product sales Reduced Order Processing Costs Reduced cost of stock overages Lowered Cost of Inventory Improved Time to Market Improved Financial Metrics 7
Q&A and Next Steps Thank you! 8