1. ECR Forum 2011 OSA Case
Danone Viktoria Central Store
Ordering
Connecting Supplier and Retailer Supply Chains to improve
Shopper Satisfaction
2. Shopper Behavior
in case of Out-of-Shelf
Buys other 36% Buys product
brand 17%
later
Doesn’t buy at
8%
all
Buys in other
19% store
Buys another
20%
flavor
+ = Retailer sales loss
+ = Supplier sales loss
3. Ordering quality is the main reason of
shelf out of stock in Russian Retail
Out of Stock due
to in Store
execution issues
Out of : Service level,
Merchandising
Stock 2%
ordering
quality
16%
Product
on Shelf
82%
* according to ECR Russia FMCG 2010 Benchmark and
Measurement by Danone
4. Fresh Dairy product category
peculiarities
Almost daily order /
Fast moving goods
delivery to the store
Every minute counts
Short shelf life
from Supplier to shopper
Complexity of Management of fresh dairy in-store stock and shelve is
complex
5. What is Value proposal of
Danone for Viktoria ?
… to delegate to DANONE the
management of store replenishment
6. VMI to improve OSA
Key principles of VMI:
- Stock is managed by Supplier
- Open data
STORE
- Orders are made by Supplier
WAREHOUSE OF SUPPLIER
Benefits:
- Stock reduction in total SC
FMCG
- Reducing Bullwhip effect
Plant - Better service level
8. We implemented a new sales force
organization focused on service and
excellence of in store execution
Traditional pre-sell New Model ‘Central Ordering’
model
Sales Rep. Merchandiser KA Executive Order Creator
(50 stores) (1-3 stores) (20 stores) (40 stores)
Order taking Stock taking Price Stock control
Stock FIFO control Shelf FIFO control Fridge POSM Order Taking
Price Promo Assortment
Fridge POSM
Promo materials Promo
Promo
Promo materials SALES SC
management
OOS
OSA, PPED 4P VOLUME
CONTROL
OSA, PPED
CONTROL AND CONTROL AND CONTROL AND CONTROL AND
FOLLOW UP FOLLOW UP FOLLOW UP FOLLOW UP
Focus? Focus Focus Focus
9. Store Order creation process
In store Danone Supply
Chain
Order-fax Order
Count stock and loss
Send stock and loss Enter stock and loss to the system
information to OC Check stock count accuracy
Create order based on history and
Enter order to the promo
customer’s system
- Merchandizer
- Order creator (OC)
- ERP
10. Danone order proposal is integrated
automatically to retailer system by EDI
1. Order proposal
Store ordering 2. Order response
system
Lineacom
ERP DANONE EDI provider ERP Viktoria
11. VMI Central Ordering helped dramatically to
increase Sales by increasing OSA
in Victoria with
2%
Central Ordering
15% OSA 98%
Out of stock 2%
98%
85%
Store without Central Ordering VMI Central ordering
in Victoria without
OSA Shelf OOS
Central Ordering
OSA 85%
OOS 15%
OSA of Danone products in Victoria YTD2011
12. While reducing costs by improving by
Execution of in Store Operations thanks
to system integration
Order proposal
Order response
ERP DANONE ERP Viktoria
Main Operational
Improvements achieved Danone Victoria
through VMI
In store and back office order entry time decrease
X X
-50%
Human mistakes due to manual order entry
X X
-100%
Elimination of returns caused by discrepancies in order
between Danone & Viktoria ERP from X X
-100%
Reduction of manual rework of delivery X X
documents from 60% to 10%
13. a Supplier-Retailer Win- Win through
Collaboration
Collaboration
VMI + System Integration
Higher OSA + Better in Store
Execution
Better Business together