Unleash the Full Poten.al of DSD: Providing Visibility, Measuring Outcomes, and Aligning Key Performance Indicators Through Data Collabora.on Tal J. Zlotnitsky Chairman & CEO iControl Systems Mike L. Jackson Former President & COO SUPERVALU How Impac+ul is DSD in the Grocery Channel?1 •  In addi?on to the above, DSD also “contributes 25 percent of total store labor in the North American market.” “Effec?ve collabora?on is the key to unlocking the next genera?on of improvements in DSD produc?vity and in-­‐store execu?on.” -­‐ John Phillips, vice president, customer supply chain & logis?cs at PepsiCo 1 Powering Growth through Direct Store Delivery (GMA, 2008) Along with its vast upside, DSD comes with important challenges: ¤  Millions of hours and billions of dollars spent on non-­‐value-­‐add ac?vi?es, like wai?ng for check-­‐in, that only reinforce distrust between the trade partners ¤  Non-­‐existent or inaccurate perpetual inventory ¤  Higher shrink (as a % of sale) than warehouse inventory ¤  Administra?ve challenge maintaining item file, allowance and promo pricing in synch between partners. Direct result: Invoice reconcilia?on conflicts ¤  Retailers have virtually no influence over item-­‐level inventory ¤  Inefficient ordering processes based on “gut” result in OOS, opportunity gaps ¤  Both sides lack transparency and tools to reduce wasteful expenditure, properly evaluate ROI on trade spend, or respond to opportuni?es in real-­‐?me Misalignment Isn’t Just a Shame… It’s Expensive
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Fact: 72% of Out of Stock is caused by a combinaIon of forecasIng inaccurately and failing to replenish on Ime1 1
Shopper Tech Lead Marketing Conference 2011
Today’s Under-­‐CollaboraIve Reality: What is the Impact? q  A 2010 FMI study asserts that the “typical retailer loses about 4 percent of sales due to having items out-­‐of-­‐stock” and that for “faster selling and/or promoted products, the OOS rate regularly exceeds 10 percent” q  A 2011 Booz & Co study1 found that “Approximately 40% of study respondents do not know whether they are achieving ROI targets on their in-­‐store programs, and another 20% know that the results fall short of the targets.” What has historically slowed the embrace of collaboraIon?1 67% of suppliers are concerned that the data from the retailer is not ?mely enough 58% are concerned about lack of standardiza?on/confusion in how data is analyzed 50% feel they have “inadequate tools to work with the data” 42% are concerned that their system can’t “talk” to the retailer’s system 33% don’t trust the retailer to deploy sufficient resources to ensure accuracy1 1
“The Promotion Collaboration: Five Steps to Success” (Booz Allen Hamilton, DemandTec) August 2011
iControl’s Mission iControl provides a fully integrated, CollaboraIve Business Intelligence plaform and the human resources to support it. Our mission is to help retailers and suppliers share cri?cal trading informa?on in a central, standardized Master Data Portal. Our plaform enables fact-­‐based, ?mely, data-­‐driven decisions that boost sales, reduce waste, promote efficiency, reward transparency, and align KPIs. iControl’s Retail Client List Some of the Brands iControl Collaborates With: How iControl Solves the CollaboraIon Challenge Retailer DataTrue® • One-­‐to-­‐Many Pla+orm Outcome: Oversight & CollaboraIon • Custom Interfacing • Data SynchronizaIon • Custom ReporIng • Process AutomaIon • Outcome-­‐Driven InteracIon • Error MiIgaIon • Scan Based Trading FacilitaIon • Mutual Transparency DSD Vendors iControl Provides Retailers and their Suppliers with a One-­‐to-­‐Many Pla+orm Which Facilitates Timely, Informed, CollaboraIve Decision-­‐Making Flexibility: Disparate Data Streams, Any File Format V E N D O R S Retailer Unlimited VariaIons of File Formats: iControl has total flexibility in accommoda?ng all manner of delimited, fixed width, Excel®, and XML formats, including manual entry, X12 Sets: ANSI iControl possess a mastery of the Electronic Data Interchange (EDI) X12 format. Most common files used are 810, 820, 852, 879, 889 Proven Flexibility: iControl currently supports hundreds of unique formats of proprietary and X12 source data f rom thousands of partners iControl Synchronizes Data and Enables AcIon Taking q Synchronized data includes: ü
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Supplier delivery records Physical inventory counts Pricebook, item file, new product, new costs By store, by item, by day/hour T-­‐logs (POS) Promo?onal ac?vi?es (allowances, effec?ve date, etc.) q Ac?onable informa?on derived out of the data sets include: ü
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Item and cost change approval automa?on Perpetual inventory calcula?ons and analysis Inventory forecas?ng (store/SKU level) Out of stock analysis Shrink analysis and senlement SKU ra?onaliza?on analysis Supplier/category performance analysis q “Set-­‐it and Forget-­‐it” user/system interac?on Automated Subscrip?ons Ensure Relevant Data is Pushed rather than Pulled User chooses reports relevant to her job func?on Select “zoom” criteria such as banner, store, UPC User selects how open the report generates, what ?me, and which format Report is automaIcally emailed by iControl ü  Promo?ons requests are loaded automa?cally ü  Automated Merchandising approval “gate” ü  Automated no?fica?on by email in real ?me ü  Approved items immediately flow to retailer pricebook and accoun?ng ü  Complete visibility to both trade partners ü  Automated synch to retailer’s perpetual inventory ü  Data constantly updates: Real ?me forecas?ng opportunity ü  Anomalies tracked in real ?me An extremely robust, highly interacIve and user friendly Business Intelligence Component PromoIonal EvaluaIon and OpImizaIon Inventory Management & Product AllocaIon Centralized Sales ReporIng Macro to Micro ReporIng Filters and Drill Downs Does it Work? Demonstrably, emphaIcally -­‐ YES! q  Client A, a grocery chain, grew sales 1.4% in a very mature, declining category in 2011 – while increasing margin by 20 basis points q  Client B, a drug store chain, more than doubled same-­‐store average daily sales in a par?cipa?ng category in under 2 years q  Client C, a na?onal manufacturer, reduced OOS levels in program-­‐
par?cipa?ng stores by 2% within a year by using iControl’s “push” repor?ng q  Client D, a grocery chain, has reduced shrink in par?cipa?ng categories by 95.6% from program incep?on in 2007 through Q3 2011 q  Client E, a regional wholesaler, requested a customiza?on that enabled it to track allowances in a way that saved it thousands of administra?ve hours of labor per year Q & A Tal J. Zlotnitsky Tal.Zlot@icontroldsd.com 727-­‐565-­‐1795 Mike L. Jackson mljackson2@comcast.net www.icontrolDSD.com