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Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
"I Get What I Want" "I Get What I Want" ––Collaboration Towards Efficient OnCollaboration Towards Efficient On--Shelf Shelf Availability To Drive Shopper Loyalty Availability To Drive Shopper Loyalty
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Participants DetailsParticipants Details
Mr Tim Edwards
Ordering Director
Tesco Stores (Malaysia) Sdn Bhd
Mr Nakulan T
Customer Service & Logistics Director
Colgate-Palmolive Marketing Sdn Bhd
Mr Ivan Chong
Customer Development Manager
Colgate-Palmolive Marketing Sdn Bhd
Ms Tan Seow Wei
Customer Service Manager
Colgate-Palmolive Marketing Sdn Bhd
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
ContentsContents
• Why we needed to do this
• What we set out to do
• How we did it
• Our results so far
• The conclusions we reached
• What next
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Colgate Palmolive Brief IntroductionColgate Palmolive Brief Introduction
Colgate is a $15.3 billion consumer products company
Truly global in scope, Colgate sells its
products in over 200 countries and territories.
Approximately 75% of sales come from
international operations.
Colgate enhances consumers’ lives through
it’s quality products in Oral Care, Personal Care, Home Care and Pet Nutrition.
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Tesco Brief IntroductionTesco Brief Introduction
Staff 472,000
Stores 4,811
Markets 14
Profit £3,176m
Sales ex.UK
£19.4bn
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
ContentsContents
• Why we needed to do this
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Shopper Smart : “50% of the shopper’s final choiseis made in front of SHELF!!!”
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Importance of ON SHELF AVAILABILITYImportance of ON SHELF AVAILABILITY
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Optimize SupplyImprove service level – Target 95% (Shipment CP Warehouse – Tesco DC)
Improve On-Shelf Availability – Prevent Loss Sales Opportunity(Tesco Backroom (Tesco Backroom (Tesco Backroom (Tesco Backroom –––– Selling Floor 50m distance)Selling Floor 50m distance)Selling Floor 50m distance)Selling Floor 50m distance)
OOS? Identify root causes and jointly formulate improvement plans.
50m
Opportunities Along The Value ChainOpportunities Along The Value Chain……
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Colgate Customer ServiceColgate Customer ServiceColgate Customer ServiceColgate Customer Service
Tesco Supply ChainTesco Supply ChainTesco Supply ChainTesco Supply Chain
Tesco Store PersonnelTesco Store PersonnelTesco Store PersonnelTesco Store Personnel
OSA Resource/OSA Resource/OSA Resource/OSA Resource/Customer DevelopmentCustomer DevelopmentCustomer DevelopmentCustomer Development
Cross Functional Team ie CDT Supply Chain, Customer Development Manager & The Field Sales Team working together driving the on-going supply chain collaboration initiatives in building engagement.
Supply Chain Collaboration for OSASupply Chain Collaboration for OSA
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Colgate Supply Chain Engagement Colgate Supply Chain Engagement
SchematicSchematic……
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
ContentsContents
• What we set out to do
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Objective : Strategic AlignmentObjective : Strategic Alignment
Mutual goals of Tesco & Colgate in driving shopper loyalty to
Colgate brands in Tesco stores
Focus on end to end supply chain to improve in-stock position with
optimum inventory coverage
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
ContentsContents
• How we did it
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
How we did itHow we did it
Understand the processes involved
Define what is an out of stock
Select trial stores
Resource the project
Run the trial
Collect the data and root cause analysis
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
1. Understand the Processes1. Understand the Processes
Step 5 -Forward Actions
Step 3 - OSA Trending
Step 1- CP Physical On
Shelf Tracking in the
Store
Step 2 - Tesco Store Data
(SOH, Order)
Step 4 -Root Cause Analysis
Step 6 -Renewal
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
2. Define What Is An Out Of Stock2. Define What Is An Out Of Stock
OSA Definition :
"At least one unit of undamaged stock has to be visibly accessible on shelf by consumers and acceptable for purchase. Otherwise it is counted as an OOS."
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
3. Select Trial Stores3. Select Trial Stores
Pilot/Selected stores :
Stores was selected based on different format, performance and proximity to facilitate effective coverage
Pilot stores : • Tesco Mutiara
• Tesco Puchong
• Tesco Hyper Shah Alam
• Tesco Extra Shah Alam
Product List :
Tracked both Home shelf Active and 2nd Site Promo SKU’s
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
4. Resource The Project4. Resource The Project
People resource
Dedicated OSA project resource
Actions at store :� Check and record stock on-shelf, shelf tag info
� Cross checking Store Inventory movement report
� Discussion with Store Replenishment Personnel
� Taking photograph for reporting
Back in Colgate office :
� Data entry and Root Cause Analysis for Reporting
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
5. Run The Trial5. Run The TrialProject Time Frame
6 Months
Tracking Schedule
Daily Tracking including weekends
Root cause Analysis and Reporting
Weekly results sharing
Monthly summary
Review at Monthly SCE meeting
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
ContentsContents
• Our Results So Far
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Store Replenishment Team – Does not place an order. Why? Book stock accuracy?
Backroom congested – Stock On Hand positive, cannot locate stocks
Stocks are not reachable – stack to high, too deep inside, in the yard
Stock take, store personnel not allowed merchandiser to take stock
Many more……still yet to identify
Different stores have different issuesDifferent stores have different issues
We need to be flexible and customize We need to be flexible and customize
our solutions and tacticour solutions and tactic
There are lots of reason for Out Of StocksThere are lots of reason for Out Of Stocks
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Some Root Causes We FoundSome Root Causes We Found
Root Cause Description
Shelf Replenishment Discipline
Positive SOH. Can’t locate stock in back room.
Stocks is available again 1 or 2 days later and the
shelf is filled again.
Master Data (SPI, pricing)
Discrepancy or dispute in pricing causing no
shipment
Book Stock Accuracy Shelf normally empty for a prolonged period before
inventory is zerorised and replenishment order
placed
Supplier OOS Supplier OOS because of manufacturing capability
or demand error.
Shelf space/Replenishment frequency
Constantly OOS as not sufficient shelf space to cater
for product off take. Shelf filled in the morning but
empty in the evening
Stock in transit Shelf is empty before replenishment could arrive
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Systematical approach in WHY diagnosisSystematical approach in WHY diagnosis
Low Lines
Supplier OOS.
System Inventory Accuracy
1
2
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
1. CDC RED 175G FCM.� Long period of OOS.� Order was placed on 25th Jan 2010.
2, Colgate Triple Action.� SOH=0.� Delivery on 7th 8th 9th and 12th was not fulfilled.
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Root Cause AnalysisRoot Cause Analysis-- ResultsResults
Different stores have different issuesDifferent stores have different issues
We need to be flexible and customize our solutions and tacticWe need to be flexible and customize our solutions and tactic
0%
10%
20%
30%
40%
50%
60%
Sh
elf
Rep
len
ish
men
t
Dis
cip
lin
e
Maste
r D
ata
Syste
m In
ven
tory
Accu
racy
Su
pp
lier
OO
S
Sh
elf
Sp
ace/R
ep
len
ish
men
t
Fre
qu
en
cy
Sto
ck in
Tra
nsit
Reasons Code
Root Causes Contribution to Non-OSA
Store A
Store B
Store C
Store D
Average
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
OSA Results by CategoryOSA Results by Category
Fabric Care
80%
85%
90%
95%
100%
Oct'09
Nov'09
Dec'09
Jan'10
Feb'10
Mac'10
Apr'10
Month
OS
A %
Home Care
80%
85%
90%
95%
100%
Oct'09
Nov'09
Dec'09
Jan'10
Feb'10
Mac'10
Apr'10
Month
OS
A %
Oral Care
80%
85%
90%
95%
100%
Oct'09
Nov'09
Dec'09
Jan'10
Feb'10
Mac'10
Apr'10
Month
OO
S %
Personal Care
80%
85%
90%
95%
100%
Oct'09
Nov'09
Dec'09
Jan'10
Feb'10
Mac'10
Apr'10
Month
OO
S %
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
3 Major 3 Major KPIKPI‘‘ss
Tesco inventory optimization has taken place and seen vast improvement from 21days to 14 days.
86
90
70
80
90
100
KPI's Pre-OSA
Case Fill %
OSA %96
94
70
80
90
100
KPI's Post-OSA
Case Fill %
OSA %
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Steps TakenSteps TakenPlanogram change for Fabric Care
Delivery from 3x to 4x per week
Tesco Reviewing push factor for Promo Planning
Tesco SC sharing findings with Store operation
Sharing of insights from Dunhumby to improve promo forecasting
Convert Fast Moving SKU’s from cross-docking to DC
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
ContentsContents
• The conclusions we reached
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Effective OSA ManagementEffective OSA Management
Involves many processes :
1. Understanding On Shelf Availability
2. Replenishment and Ordering Processes
3. Inventory Management Processes
4. Merchandising Standards and Processes
5. Back of Store Processes
Last 50m Backroom to Shelf replenishment efficiency=
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
OSA tracking project alone will not improve OSAOSA tracking project alone will not improve OSA
Dropped Orders Root
Cause Analysis
Merchandisers feedback on
store execution gap
On Shelf AvailabilityMonthly SCE
Meeting
Joint Promo Planning
OSA Tracking
Master Data
Alignment
High Service Level
Efficient Store Replenishment
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
ContentsContents
• What Next
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Key Success FactorsKey Success FactorsSenior management involvement – Joint Business Planning
Dedicated resource availability
Cross Functional Team involvement
Insights – Root Cause was supported by multi source information to provide confidence in action
Good working relationship with store, timely in addressing non-OSA vs other priorities
Managing conflicting KPIStore Book Stock accuracy vs Daily Write-off value
Regular performance review
Transparent, Honest and Non-defensive
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
What NextWhat NextContinue regular OSA Review meeting
Fortnightly
Involvement from SC, Merchandizing & Store Manager level
Encourage greater participation on OSA Issues & Corrective actions with Store involvement
CP Implant in Tesco
Joint Promo Planning
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
THANK YOUTHANK YOU