1. 12th ECR Asia Pacific Conference
New Ways to Deliver Availability to Add Value For Consumers
Tim Edwards – Tesco Stores Malaysia
Tesco in Malaysia
Background
• Joint venture set up in 2001 between (30%) and Tesco PLC (70%)
Investment
• Over RM3.0 billion in Malaysia since 2002
• 36 hypermarkets across Peninsular Malaysia. 6 stores will open in 2010/11
Employment
• Local talent for key Management positions
• Over 13,000 Malaysians serve 3 million customers every month
Tesco – bringing low prices, quality & choice to consumers in Malaysia
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2. Tesco Malaysia Milestones
2001 Tesco UK PLC signs JV with Sime Darby Berhad to form Tesco Malaysia Stores Sdn Bhd
2002 Tesco Malaysia’s first hypermarket opens in Puchong, Selangor Darul Ehsan
2007 Acquired Makro Malaysia Cash & Carry & converted 8 Makro Cash & Carry stores to
Tesco Extra, a pioneer in Tesco Group, catering to needs of small businesses, families & individuals
First to build & operate a state-of-the-art Fresh Food Distribution Centre in Simpang Pulai, Perak
2008 Launched an innovative in-house ‘Clubcard’ loyalty program as a way to thank customers
2009 29 branches throughout Malaysia with over RM3.0 billion investment and created 10,000 new jobs
Tesco to open Asia’s largest Ambient Distribution Centre, valued at RM 210 million
A world class retailer for Malaysians, by Malaysians
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On Shelf Availability is an issue that affects all of
us and can only be resolved by working together
• Consumers are increasingly short of time and in many cases money
• They want to get what they want when they shop
• They are more loyal to the store that has what they want
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3. There are many root causes for out of stocks
Root Cause Description
Shelf Replenishment Positive SOH. Can’t locate stock in back room.
Discipline 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 Constantly OOS as not sufficient shelf space to cater
frequency for product off take. Shelf filled in the morning but
empty in the evening
Stock in transit Shelf is empty before replenishment could arrive
How can we work together to consistently deliver
on-shelf availability?
on-
The Basics Collaborative Managing Strategic
Activities Performance
Develop Working Promotion Order Fulfilment Implant Role
Relationships Management
Failed To Arrive Vendor / Co-
Key Performance Merchandise Managed Inventory
Indicators Change Plan Supplier
Conformance Supply Projects
Base Forecasting Event Management Management
TWIST
Collaborative Managing
The Basics Strategic
Activities Performance
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4. The basics that need to be in place before
collaboration can start
Develop Working Base Forecasting
Relationships
Agreeing growth forecasts
Initial engagement
Openness on New Stores
Trust
Key Performance Indicators
Agree the measures
Agree what good looks like
Sharing of information
Collaborative Managing
The Basics Strategic
Activities Performance
Collaboration makes demand more predictable
and is an enabler for on time supply and in full
Promotion Management Event Management
Agreeing of lines and offers and Agreeing forecasts of key
timing products
Agreeing expected volumes Agreeing buying period and
Buying in before promotion start approach
Reviewing sales after promotion Joint monitoring during the event
has started Exit Management
Exit management
Merchandise Change Plan
Agree changes to range
Agree changes to display layouts
New line launch management
Collaborative Managing
The Basics Strategic
Activities Performance
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5. Managing performance collaboratively creates
understanding and action that improves availability
Order Fulfilment Supplier Conformance
Measures and targets agreed for Management
order fulfilment
Regular review and agreed next
Delivery to agreed pallet
steps
configuration
Open approach to problems
Product descriptions and
barcodes
Failed To Arrive Delivery notes and invoices
Measure and targets for on time
delivery
Early communication of
problems and collaborative
approach to resolving
Collaborative Managing
The Basics Strategic
Activities Performance
When everything is in place a true supply
partnership can start to deliver strategic advantage
Implant Role Supply Projects
Agreement on role Joint projects to improve
Recruitment/ Logistics performance of the supply chain
Access to people/ data
Empowerment TWIST
Experience in a Tesco Store
Vendor / Co- Managed Debrief and Review
Inventory Agreed next steps
Agreement on benefits
Resource and Roles
Targets and Review
Collaborative Managing
The Basics Strategic
Activities Performance
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6. It works! Some results of working together
with Colgate-Palmolive
Colgate-
KPI's Pre-OSA KPI's Post-OSA
Case Fill %
Case Fill %
OSA %
100 OSA %
100 96
94
90
90 86 90
80 80
70 70
A big improvement in availability and a stock
reduced from 21 days to 14 days.
In Summary…
Summary…
• Availability is an issue for us all, that affects consumer
loyalty and sales
• Availability is the result of many actions throughout the
supply chain rather than a Retail problem
• We can improve availability by working together in
partnership to create visibility of supply and a shared view of
demand
• It’s not ‘Rocket-Science’ and it is not dependent on systems,
only on our ability to work openly together to deliver
availability to consumers better, faster and for less cost
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7. THANK YOU
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