RELEX Fresh Lab Webinar 2 30 January 2014

Special situations in fresh replenishment

Agenda

About fresh webinars and RELEX

Special situations in fresh replenishment

Case: JJ Foods

RELEX agile implementation

Q & A

Fresh lab webinar themes

Webinar 2: Special situations in fresh

replenishment

30 January 2014

Reviewing the key elements for automated replenishment• Daily SKU-location level forecasts• Shelf-life management• Optimizations and workflow

Leveraging efficient base process and flexible reporting to control special situations:• Seasons• Campaigns

Webinar 1:Key elements of fresh

replenishment

21 January 2014

RELEX in brief

• RELEX offers solutions for demand forecasting, automated replenishment, inventory optimisation, and supply chain analytics– Built especially to the requirements of grocery

retail: incorporates short life-cycles, seasonality, campaigns, assortment management and chain structure of delivery networks

• RELEX is the fastest growing supplier of SCM solutions in Europe– Highest ranked SCM solutions provider on the

Deloitte Technology Fast 500 EMEA list in 2011, 2012 and 2013

– 70 supply chain professionals working at offices in Finland, Sweden, Germany and the UK

RELEX solutions are used for managing and controling material flows at 50 customers in 12

European countries. These cover millions of SKUs worth billions of euros

RELEX references

Agenda

About RELEX and Fresh webinars

Special situations in fresh replenishment

Case: JJ Foods

RELEX agile implementation

Q & A

The challenge and the potential in a single word – spoilage!

Recap from Webinar 1: Harnessing accurate day level calculations and product shelf-life is the key to masteringspoilage automatically!

In order to get the balance right for the fresh replenishment in the firstplace, one must be clear on availability and service level goals and

priorities!

Day-level forecasts Day level safety stock parameters

Simulated spoilage Expected shelf-life factor in safety stock

FORECAST SAFETY STOCK

Automation of fresh replenishment demands for adequate level of detail and flexibility from the replenishment system!

• Forecasts and other data can be viewed and edited at all levels– By product hierarchy level– By region– By time period (day, week,

month, quarter, year)– Any combination of above

• Easy drill-down from upper categories all the way down to individual product-region level

• Possibility to flexibly and easily create new report views whenever needed

• Flexible visualization to facilitate examination of any time-series data

Basic steps of holiday demand-supply planning process

1. Forecast holiday period’s demand

2. Create a supply plan based on delivery schedules and inventory goals

3. Execute store deliveries based on latest information

1. Forecast holiday period’s demand

• Use automatic references– Fore fresh luckily quite often

possible! • Calculate weekday profiles

automatically or set manually– Note the moving and non-

moving holidays!• Increase the quality of the

forecast by adjusting it manually– Levels:

• Product - store location type• Product group – store• Product-chain

• Experienced forecast analyst canmake a significant difference!Example of setting up an automatic reference

run in RELEX

2. Create a supply plan i.e. “store delivery forecast” based on delivery schedules and inventory goals

Potential stress points:

1. Receiving capacity at individual stores: Usually the amount of total goods / pallets arriving is key

2. DC picking capacity: Usually the number of picked delivery lines is critical

3. DC warehousing space: The number of pallets forecast to be in stock

Example of realized and projected balances and delivery rows for one product group in one

location in RELEX

3. Execute store deliveries based on latest information available!

1. Order goods based on the SKU-chain level

order forecast for the delivery day

2. Allocate the products on stores using the most

recent SKU-store level information once the

products are in the DC

Basic steps in campaign forecasting process1. Manage campaign

information

2. Include logistic information

3. Let the system calculate

4. Review and adjust forecasts

5. Collaborate with suppliers

• Use data from earlier campaigns to estimate sales and margin impact in the future• Estimate sales impact of individual campaign variables: discount, shelf location etc

• Define how many days before campaign start you want goods to arrive• Define a presentation level (% of forecast) that is used for initial fill

• System calculates an SKU-Store –level sales forecast and delivery plan for the goods on promotion

• Review aggregate level forecasts to check accuracy and ensure capacity• Adjusting can be done also on aggregate level – system cascades changes to

lower levels

• Distribute order forecast to guarantee capacity and availability of products in promotion

• Collaboration can be extended to actual campaign data

Execute and review

• Execute replenishment as with normal replenishment• Review campaign success rate with operative and commercial KPIs!

Example: Review information on campaigns and drill-down to particular campaigns and products

15

Agenda

About RELEX and Fresh webinars

Special situations in fresh replenishment

Case: JJ Foods

RELEX agile implementation

Q & A

Case: JJ Food Service

• Goals and challenges– Despite add-on functionality developed in-house, the company’s ERP functionality

for forecasting and requirements was considered insufficient– JJ Food Service sought to increase the level of automation in purchasing while at

the same time attaining higher precision in replenishment– A need for managing campaigns, holidays, seasonal variation, fresh food and

customers’ menu-driven demand more efficiently

• Results attained by JJ Food Service (reported after three-month pilot phase, during which a full roll-out was completed)– Purchase ordering requires 25 % less time– Inventory levels have decreased by 15 %– 10 percentage points improvement in service level of fresh food, without increased

inventory levels– 10 percentage point improvement in service level for slow-movers

JJ Food Service is British multi-channel food service wholesaler. The company's’ turnover in 2012 was approx. 180 m£.

Agenda

About RELEX and Fresh webinars

Special situations in fresh replenishment

Case: JJ Foods

RELEX agile implementation

Q & A

RELEX value promise is enabled by big data technology

RELEX Big Data Technology

• Columnar database• In-memory analytics• SaaS-based

RELEX Agile Projects

• Easy to integrate• Easy to pilot• Easy to scale

RELEX Value Promise

• Risk-free: pay as you go• Flexible: Adjust vision• Rapid and reliable: Quick

results

RELEX Agile project structure

Data model

System architec-

ture

First data model build up

Milestone1: System

specified

Business needs

Data interface finalization

Milestone 2: Ready for business

validation

Milestone 3: Ready for pilot

use

Acceptance testing

PRO

JECT

KIC

KOFF

Business process specifications

Configuration of use processes

Validation of use processes

Milestone 4: Ready for roll

out

Business testing in real life

Iterative technical development

PILOT …

Each milestone cycle typically lasts for 4 weeks – pilot can be startedin three months

Thank you!

Any questions?