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CorporateOverview
• NewEngland’sLeadingDistributorofWine&Spirits-Nations7th largest
• PrivatelyownedbyCarmine&CarlMartignetti
• Establishedin1908- 3rdgenerationownershipbytheMartignettiFamily
• OperationsinMassachusetts,RhodeIsland,NewHampshire,Vermont&Maine
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CorporateOffices&Operations–Taunton,Massachusetts
• Salesof10.5millioncasesannually
• 1150+TotalEmployees-525+SalesPositions
• DistributionCenters-1.2millionsquarefeet
• Servicing11,000+restaurants,hotelandretailers
CompanyHistory
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2016
1908 1933 1986 1991 1992
EstablishedGroceryBusinessinNorthEndofBoston
RepealofProhibitionandformationoftheMartignetti(Carolina)distribution/wholesalecompany
Carmine&CarlMartignettipurchasecompany
AcquireddistributorChas.Gilman&Sons
AcquiredPastene WineCompany
2004 2005 2006 2007 2008
AppointedexclusivespiritsdistributorinMaine-10yearcontract
ExpandedNorwoodwarehouseandconsolidatedClassicWineImports
AcquiredUnitedLiquors,greatlyexpandingthecompany’soverallspiritsandwinesalesandportfolioofferings
ConsummatedsuppliertradethatresultedinMartignettiexclusivitywithDiageoandPernodRicardandHorizonexclusivitywithBacardi
FormedpartnershipwiththeMancinifamily- RhodeIslandDistributing
1993 1994 1998 1999 2000
AcquiredJetWine&Spirits,establishingMartignetti CompaniesofNewHampshire,MaineandVermont
AcquiredSilenus WineCompany
FormedMartignettiCompaniesofRI,whichcreateda5-state,regionalNewEnglandSalesOrganization
ConstructednewcompanyheadquartersinNorwood,consolidatingallexistingMAwarehouseoperations
AcquiredClassicWineImports
2009 2013
AcquiredCommonwealthWine&Spirits,bringingtheE&JGalloportfolioandotherselectfinewinesandspiritstothecompany
SecuredProximoappointment.CompletedstrategicsuppliertradebringingAbsolutandentireTreasuryWineEstatesportfoliotothecompany
NewCorporateHeadquartersandDistributionFacility–TauntonMASummer2016
2014
MaineSpiritscontractexpires,re-establishedthreestatebrokeragebusinessinNorthernNewEngland
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KeySuppliers
NewCorporateHeadquarters&DistributionCenter
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NewCorporateHeadquarters&DistributionCenter
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Industry’sMostTechnicallyAdvancedDistributionCenter&SalesOperation
• ConsolidatedTwoDistributionCenters
• AdvancedWarehouseRoboticsandMaterialHandlingSystems
• SolarPowered
• LEEDSCertified
• HydrogenPoweredVehicles
$150MMProject– CompletedSummer2016
• ConsolidatedTwoDistributionCenters
• 130Acres– 700,000+sf
• SolarPowered
• LEEDCertified
• HydrogenPoweredVehicles
KeyFeaturesofNewCorporateFacility
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CentralLocation–State’sLargestBusinessPark
OpenFloorPlan–toFacilitateCollaboration
Video- ConferencingCapabilities
WebEnabled“SmartBoards”
MultipleProductEducation&TrainingRooms
Customer/SupplierHospitalityCenter
Sales&TechnologyTrainingCenters
DedicatedSalesMeetingRoomforeachDivision
AdvancedRobotics&MaterialsHandlingSystem
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SUPPLYCHAINPROFILEShippingjustunder9Mcasesperyearto8,500customersinMA• Delivering7.5Mcaseson12,500trucksperyear(3rd partydeliversinWesternMA)
InBoundLogistics:• OceanFreight/Rail/OvertheRoad
– PointofOriginfreight: 3.4Mcases– Gallocases: 1.8Mcases– Pier/drayagecases: 1.8Mcases
Pricingdepartment9
PURCHASINGPROFILE
• 500vendors– Top100vendors=85%ofinventory
• 12,000skus• $120MaverageinventoryinMA• 6turnsperyear
– Gallo:16daysonhand– FineWine:someonlyturn1-2timesperyear
**WealsobuyforNH(controlstate)andVisionWine&Spirits,anationwideimportcompany
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MartignettiCompanies
InventoryPlanning&ReplenishmentTeam
MartignettiCompaniesInventoryPlanning/StaffProfile:• SeniorVicePresidentreportstoOwnership
• 2Directors
• 10InventoryManagers/25PortfolioManagers>>6SalesVP’s
• InventoryManagersRangeinExperiencefrom3-38Years
• Rangeinagefrom32-63
Howwedecided
• JDA– E3wastheincumbent;13YearsExperience
• BlueRidge
• Localvendor/E3creator
TheBLUERIDGEAdvantageBusinessProcess/Integration• Gainedin-depthknowledgeofourbusinessandprocesses• Ledtostrongintegrationanddetailedprojectplanning• GoodcollaborationwithbothteamsTrainingandSupport• Indepthtrainingonsitefortwoweeks• WeeklyLifelinecalls• ResponsivesupportFunctionality• EventsandForwardBuyingareeasytoinputandunderstand• SlowmoveralgorithmhelpstokeepproductinstockReports• SupplyChainAnalytics(SCA)• ReportscanbesetuponautomaticemailscheduleInterface• Easytounderstand/simplelayout• Abilitytoseehistory&forecastdatainbothgraphicalandnumericalformat
BlueRidge-MartignettiCompaniesProjectScope:• BusinessProcessAnalysis(4daysonfrontend)
• ForecastingandReplenishmentSolution(SupplyChainPlanning-SCP)
• PlatinumLifelineService
• Education(3-4daysessions):Breakthrough/Guidepost/Advanced
• SupplyChainAnalytics(SCA)
BlueRidge– Earlydays• October1golivedate• 23YearVeteranInventoryManagerretiredinAugust/positionfilleddayafterLaborDay• Someinconsistentsaleshistory/companymoveoneyearearlier• Aggressivetimetableforitemsetups,linking;ledtomistakes• Noexpectedoutofstockreport• Gallomovedtoanew,localDC• Californiawildfires• Sales:Lackofcommunicationonprograms• ServiceLevels(i.e.,safetystock)tooaggressive• Leadtimeadjustments• Culture/TrustingtheProcess• Holidayseason• Political&OpportunityBuysareheavyinthe4th Quarter/$8Mthisyear/early2018
SevenEssentialElements• DemandForecast• LeadTimeForecast• OrderCycleOptimization• SafetyStock&ServiceLevelManagement
• DemandPlanning&Replenishment• SpecialOrders• OrderConstraintsValidation
HistoricOnHand$OnOrder$MA
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Out of stock comparison
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BlueRidge– Earlydays
• Learningcurve• Trustingthesystem/Interruptions• Training• Lifeline
• SupplyChainAnalytics
• BlueRidgeTipoftheWeek
SupplyChainAnalytics
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TIPOFTHEWEEKYoushouldperiodicallyrunanOCOonyourvendorstokeepupwithanychangestothevendorsvolume.
• Sincewe’vebeenonthesystemforabout6months,nowisagoodtimetoreviewyourvendorsandruntheOCO’s.
OtherreasonstorunanOCO:• NewBrandsoritemshavebeenaddedtothevendor• BrandsorItemshavebeenlostorremovedfromthevendor• Newactivityorchangesinforecastsonseveralitems
22TIPOFTHEWEEK
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When entering a Forward Buy that is specifically for a Price Increase, make sure to choose Price Increase as the Deal Type. If you leave it at the default of Off Invoice, the cost of the item will be changed when it comes over to AX – to whatever you entered as the discount.
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In most cases, when forecasting a slow mover (less than 5 or 10 cases per week), it’s best to not use a seasonal profile.Something that is truly not seasonal should be on a flat line profile. This will allow a greater deviation and keep enough safety stock to cover those occasional spikes.
The example below shows an item that does not have true seasonal activity, and has an average of less than 1 case per week.You will get better results from a flat line forecast:
Whatgetsmeasuredgetsdone….APROCESSTOCREATEMOREMEANINGFULMETRICS
• Overstocks• ForecastAccuracy• WeightedAverageInStock/ServiceLevel• DaysofSupplyByBuyer• SKUCount• AgedInventory• FreightCPC
HistoricOverstock$MAwithOverstock%GOAL=20%
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Overstocks
• CurrentAverageInventoryLevelis$115M/1,100,000cases• Inventoryoveroneyearold,$4M/27,000cases
• Political/ForwardBuys,$8M/50,000cases
• ‘Other’overstocks,$18M/135,000cases
• Current,overstockdollars,$30M/212,000cases 26%dollars/19%cases
• OverstockGoal/ToleranceLevel:$23Mtotal/162,000cases=20%/15%respectively• Reduce‘other’overstocksby$7M
Overstocks
• Salesbehindplanby$11MFYTD/COGS,$8.5M• DemandForecast
• Componentsofsafetystock:• Leadtime,Quoted,Total,Deviation• ServiceLevel• OrderCycleOptimization:AcquisitionCost/CarryingCost
• BuyerstrustingtheSOQ
• Buyersorderingearlierthanneeded/orderingtomeetshippingconstraints
• ManagingPainPoints:OutofStockvs.Over-Stock
Overstock$byBuyer
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OverstockUnitsbyBuyer
Overstock%byBuyer
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Overstock$byTop10Vendors
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Overstock$byTop10Items
OverstockUnitsbyTop10Items
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ForecastAccuracy:Comparestheforecastforlastperiod(oneweek)totheactualdemand.
Wewanttosmoothouttheanalysisbylookingat4and8weekperformanceasatruemeasureofourforecastingaccuracy.Wearestillworkingonareporttouseatleast4weeksofhistoryandaveragethatforForecastAccuracy. Workinprocess—3weeksofdatasofar.
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ForecastingAccuracybyBuyer- FA
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Historic1WeekForecastAccuracy
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Historic4WeekAvg ForecastAccuracy
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Historic8WeekAvg ForecastAccuracy
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OUT OF STOCK COMPARISON
40• WeightedAverageServiceLevel—ComingSoon!
DOScomparisonYTDthroughMarch2018
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DOScomparisonwithinventoryandsales
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