GMA/FPA MERCHANDISING,SALES AND MARKETING CONFERENCE
Downstream Data
Crafting the Business Case for Account Management Analytics
Marc Brown, Del MonteShawn Dolley, Vision ChainSue Simonett, General Mills
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Topics
1. Availability of downstream retailer data
2. How companies use this data for value
3. Dynamics & restrictions working with data
4. Del Monte’s Downstream Initiative
5. General Mills’ Downstream Initiative
6. Vision Chain’s Downstream Solution
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What’s new about ‘downstream data’
Data availability is high, not just Wal-MartChallenge is knowing how to use it
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Value using data in old & new ways
SalesRetailer-mandated reportingCategory & Account mgmt
Supply Chain‘Demand Driven Supply Network’POS-driven Forecasting
OtherProject-specificIntegration with new product marketing, production plants
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The ‘Tree’ of Demand Data to Workstreams
Wal-Mart
Safeway
Food LionTarget
Hannaford
EDI 852
Loblaw’sAC Nielsen
Costco
Pet Retailers
KrogerIRI
Supervalu
The Pinch Point
Supply Chain
Sales & Marketing
Inventory Optimization
Sales & Operations Planning
Vendor Managed Inventory
Handhelds & Store Service
Category Management
Assortment Optimization
Promo Optimization
Trade Promotions
Plant Management
Functional Business Processes
Demand Data
Demand Planning
Deduction Mgmt
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Dynamics of working with retailers
Using downstream data is “Retailers partnering with select suppliers to drive shelf availability and reduce landed cost.”
Focus of a retailer’s initiative is dependent on their internal capabilities.
Retailers have standard templates, and they want you to use them.
The more recommendations and help you give them, the more leadership in the category and flexibility they will give you.
This is not ‘culturally comfortable’ for the retailer. This space used to be off-limits to suppliers.
Data quality remains an issue.
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Restrictions on the Data
Security and/or confidentiality rules applied by retailers:
All retailers have explicit or implicit data restrictions. These differ by retailer.
Some retailers will provide competitor data within a category, for the supplier to provide ‘value-add’ to the category as a whole. No sharing competitor data internally within the supplier.
No sharing data with 3rd parties
No merging data with other retailer data to find opportunities for other retailers
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Del Monte Foods Profile
$3.4B Producer, Distributor & Marketer of premium quality, branded food and pet products for the U.S retail market
4,000+ Products20 Factories9 Distribution Centers
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Del Monte Foods Transformation
Our goal is to create a sourcing and supply chain structure that will provide greater flexibility compared to a more traditional fixed-asset focused business.
Launched a variety of initiatives in 2006 focused on strengthening systems and processes, and streamlining the organization
Supply chain efficiencies to improve order management, supply chain planning, execution and inventory reduction capabilities.Lower delivered costsStreamlined organizationEnhanced and integrated Trade Fund Management capabilities
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Del Monte Foods Transformation
Del Monte Plants Wal-Mart DC’s
Wal-Mart StoresSam’s Club
Del Monte DC’s
Co-packers
Re-packers
Major Grocery Retail VMI/CRP Customer DCs
Major Grocery Retail Customer Store Level
Demand Driven Distribution
Suppliers
1
2
4
5
3
Store LevelDemand SignalsWhen Available
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Targeted Value to Retailers
Lower Safety Stocks at the RDCs resulting in higher turns
Improved GMROI
Increased Sales through higher store in-stock positions
Lower Supply Variability throughReduced Lead time variability
Improved RAD performance
Improved Order fill rates
Improved Visibility to Inbound Deliveries
Improved DC labor planning
Enhanced VMI/CMI capability
Last minute supply/demand match at all levels including to the store
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Targeted Value to Del Monte
Improve Del Monte’s ROIC by:Reducing Finished Goods Inventory and Safety Stock and increasing inventory turnsLowering Raw Material and Packaging InventoriesReducing Demand variabilityEnabling flexibility in the Physical Distribution Network design
Increase Sales and Operating Profits by:Improving Retail store in-stock positions to 99.5%+; reduce lost salesMeet and exceed customer service requirements
Lower Operating Expenses related to Distribution & Logistics costs by:Improving transportation mode selectionsReducing expedite charges and intra-company inventory balancing transfersReducing customer fines for late deliveries and detention chargesEliminating and automating many manual and administrative processes
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Del Monte Activities Channel
Access Method Time Location Product
POS Sales POS Qty
Avg Price
Unit Cost
On Hand Inventory
On Order Inventory
In Stock %
Mark up / Mark Down amt
DC Ships
FCST Qty
Assort Ind
Retailer A Club Portal / AS2 Day Club SKU
Retailer B Drug Portal Day Store SKURetailer C Drug Portal Week Store SKU
Retailer D Grocery EDI Day Store SKURetailer E Grocery FTP Week Store SKURetailer F Grocery Manual Day Store SKURetailer G Grocery EDI Day Store SKURetailer H Grocery EDI Week Store SKURetailer I Grocery FTP Day Store SKURetailer J Grocery EDI Week Store SKU
Retailer K Mass Merch Custom Week Store SKURetailer L Mass Merch Portal Day Store SKURetailer M Mass Merch Portal / AS2 Day Store SKURetailer N Mass Merch EDI Week Store SKURetailer O Mass Merch Portal / AS2 Day Store SKU
Retailer P Specialty EDI Week Store SKURetailer Q Specialty EDI Week Store SKU
In DialogIntegrated
Data Granularity Key MeasuresTrading Partner Sampling
Trading Partner Sampling
• Retailers continue to expand coverage of “shared” information. • Granularity continues to penetrate deeper within Retailer’s supply chain• Latency of information continues to shrink
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General Mills Overview
$13.4 billion FY07 net sales*6th largest food companyMarket in over 100 countries25+ categories - 3 temperature states Typical US grocery = 650+ SKUs
*Includes Proportionate share of JV sales
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Trends Leading To a Demand Signal Repository
Last 10 years:• Consolidation in Industry suppliers & retailers
• Retailers pulling out of syndicated data sources
• Growing trust and partnership between suppliers / retailers
• Increase in retailer capabilities & willingness to share data
• Increase in supplier capabilities & willingness to receive data
• Significant decline in data storage expense
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Utilization of DSR
2002 2007 2009 +Sales and category analytics
Demand sensing inputs into supply chain decisions/systems
2005
Weekly/daily, historical analysis, minimal integration, complex metrics, analytical focus
Daily / intra-day, highly integrated, basic measures, execution focus
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Strategy – “Customer Direct Data” / DSR
General Mills Strategy:• Invest to Learn / Leverage
• Push where benefits are clear
• Focus on key customers
• Prioritize by willingness and capabilities to share data
• Immediately leverage in downstream - design to leveraged upstream
• Sales owns repository and relationship with retailers
• IT is primary support for repository and reporting application
• Collaboration across multiple organizations
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Multiple Organizations, Strategies, Requirements
Consumer Food
Sales
Customer
ServiceRegion Sales Teams
Supply Chain
Consumer
InsightsMarketing
Leads to duplicative storage and processes
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Achieve Balance With DSR Strategy
Customer data brought into single repository with output delivered to various organizations
Consumer Food Sales
Customer
ServiceRegion Sales Teams
Supply Chain
Consumer
Insights
Marketing
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Customers Identified in DSR Strategy
• Targeting >60% of US business, 45% of Canada business
• Measured / steady approach
Customer Status Customer Involvement
Customer Capabilities
Acquisition Method
Scalable Process Time Frequency Geographies
A Live High High Portal/AS2 Yes Day Daily / Weekly Store / Warehouse
B Live High High Portal/AS2 Yes Week Weekly Store / Warehouse
C Live High High Portal/AS2 Yes Day Weekly Store / Warehouse
D Live High High AS2 Yes Day Day Store / Warehouse
E Partial / Not Leveraging Low Low Portal/AS2 No Week Weekly Chain / Store
F In Discussions High Medium Portal/FTP Yes Day Daily/Weekly Store / Warehouse
G In Discussions High Medium AS2/FTP Yes Week Weekly Store / Warehouse
H Pending - - - - - -I Pending - - - - - -J Pending - - - - - -K Pending - - - - - -L Pending - - - - - -M Pending - - - - - -N Pending - - - - - -O Pending - - - - - -
Data GranularityCustomer Profile
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Learnings To-Date
Data acquisition process is time consuming
• Managing receipt, loading and validation of data is difficult
• Large data volumes, No set time for data transmission, etc…
Requires significant flexibility across various retailers
• Varying hierarchies, metrics, etc…
• No standards
• Internal requirements vary by organization
Need dedicated resource commitment with specialized skills
• Requires intimate knowledge of data by customer
• Business and technical skills required
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Who is Vision Chain?
The Industry Standard for DSRSAP’s Chosen VendorSoftware company, founded 1999Based in Washington DCConsumer Product, High TechHarmonizes transactions from retailersEnterprise on-premise software using retailer-provided demand data
#1 in market share in our space