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  • 1.1 Supply Chain Management &

    Strategic Planning

    Supply Chain Evolution

    The Supercheap Auto Group Story

    Peter Birtles

    Managing Director

    Supercheap Auto Group

    Carter McNabb

    Partner

    GRA Pty Ltd

  • Name of presenter here Title of presentation

    Agenda

    Group Overview

    Supply Chain Evolution

    Key Observations

  • Name of presenter here Title of presentation

    Group Overview

  • Name of presenter here Title of presentation

    History

    1974 First shop in Brisbane

    1993 7 SCA stores in South East Queensland

    2000 50 SCA stores

    2002 100 SCA stores

    2003 Marlows acquisition conversion to SCASCA launches in NZ

    2004 Public listing on ASX200 SCA stores

    2005 BCF launched

    2008 Goldcross acquired

  • Name of presenter here Title of presentation

    The leading retailer of auto parts and accessories across Australia and New Zealand

    Convenience retailer focusing on value and range

    255 stores today

    The leading retailer of boating, camping and fishing products and accessories across Australia

    Destination retailer focusing on range and service/value

    59 stores today

  • Name of presenter here Title of presentation

    The largest specialty retailer of bicycles, parts and accessories across Australia

    Destination retailer focusing on range and experience

    18 stores today

    Group services provides Logistics, Finance, IST, Property, Risk and HR Management support to the retail businesses

    5 Distribution centres in Brisbane, Melbourne, Perth and Auckland

    Overseas sourcing office in Hangzhou, China

    GROUP SERVICES

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    fcs

    tOur sales growth

  • Name of presenter here Title of presentation

    Supply Chain Evolution

  • Name of presenter here Title of presentation

    Pre 2001

    BRISBANESHED

    DOMESTICSUPPLIERS

    IMPORTSUPPLIERS(AGENTS)

    INDENTSUPPLIERS

  • Name of presenter here Title of presentation

    Operational Objectives

    Support new store roll out

    Efficient centralised replenishment

    Support developing import program

    Key Processes

    Receipt, store, stage and pick

    Some direct to store

    Max Min replenishment

    Major Systems

    Point solutions

    No ERP or WMS

    Paper based picking

    Key Challenges

    Continually outgrowing infrastructure

    Limited performance measurement

    High cost of operation

    Reactive not proactive

    Pre 2001

  • Name of presenter here Title of presentation

    2001 to 2003 : Development Initiatives

    Infrastructure

    15,000m2 National DC

    National logistics provider appointed

    Process Development

    Open to Buy management

    Demand replenishment planning

    RF picking

    Systems Development

    Manhattan PkMS

    SAP R/3

    People Development

    Recruited expertise

    Systems training

  • Name of presenter here Title of presentation

    BRISBANEDC

    DOMESTICSUPPLIERS

    IMPORTSUPPLIERS(AGENTS)

    INDENTSUPPLIERS

    2001 to 2003 : One Order, One Drop, One Invoice, One Payment

  • Name of presenter here Title of presentation

    Operational Objectives

    Support new store roll out

    Support 120 stores

    Reduce out of stocks

    Reduce logistics costs as % of sales

    Key Processes Introduced

    Demand replenishment planning

    Monthly sales and operations planning

    Major Systems

    Manhattan PkMS

    SAP R/3

    Key Challenges

    National store expansion

    Variable performance

    Limited team work

    High level of frustration

    SKU profile variability

    2001 to 2003 : One Order, One Drop, One Invoice, One Payment

  • Name of presenter here Title of presentation

    2003 to 2005 : Development Initiatives

    Infrastructure

    DC in Perth

    DC in Auckland

    Overflow DCs in Brisbane

    Conveyor pick systems

    Process Development

    Store level demand forecasting and inventory planning

    Performance management

    Daily Weekly routines

    Systems Development

    GAINS

    People Development

    Role coaching

    Systems training

    Replenishment and re-ordering roles move to Merchandising

    Merchandise operations planning

  • Name of presenter here Title of presentation

    BRISBANEDC

    DOMESTICSUPPLIERS

    IMPORTSUPPLIERS(AGENTS)

    INDENTSUPPLIERS

    2003 to 2005 : Project FOSIL : Focus on Supply, Inventory and Logistics

    PERTHDC

    NEW ZEALANDDC

  • Name of presenter here Title of presentation

    2003 to 2005 : Project FOSIL : Focus on Supply, Inventory and Logistics

    Operational Objectives

    Support new store roll out

    Support network across 2 countries

    Reduce out of stocks

    Reduce inventory per store

    Reduce logistics costs as % of sales

    Key Processes Introduced

    Store based demand replenishment planning

    Weekly sales and operations planning

    Performance analysis

    Major Systems

    Manhattan PkMS

    SAP R/3

    GAINS

    Key Challenges

    Variable performance

    Cross functional solutions

    Capacity for multi brand growth and efficiency

  • Name of presenter here Title of presentation

    2006 to 2009 : Development Initiatives

    Infrastructure

    DC in Melbourne

    BCF DC in Brisbane

    Exit overflow DCs in Brisbane

    MHE and Conveyor systems

    Process Development

    Multi brand supply chain solutions

    Supply Chain Methods

    Inventory Analysis

    EDI

    Master Data Management

    Systems Development

    PkMS upgrade

    SAP upgrade

    GAINS enhancements

    People Development

    Strategic focus

    Investment in capability development

    Role coaching

    Cross functional team working

    Performance management

  • Name of presenter here Title of presentation

    2006 to 2009 : Multi Brand - Multi DC

    BRISBANEDC

    DOMESTICSUPPLIERS

    IMPORTSUPPLIERS(AGENTS)

    INDENTSUPPLIERS

    NT

    PERTHDC

    NEW ZEALANDDC

    DIRECTIMPORTS

    IMPORTSUPPLIERS(AGENTS)

    IMPORTSUPPLIERS(AGENTS)

    MELBOURNEDC

    INDENTSUPPLIERSINDENT

    SUPPLIERS

    DIRECTIMPORTSDIRECT

    IMPORTS

    DOMESTICSUPPLIERSDOMESTIC

    SUPPLIERS

  • Name of presenter here Title of presentation

    2006 to 2009 : Multi Brand - Multi DCOperational Objectives

    Support network across 3 brands and 2 countries

    Inventory optimisation

    Safety

    Reduce logistics costs as % of sales

    Return on capital

    Key Processes Introduced

    Culture Change

    Process discipline!

    Facts not Opinion

    Overseas sourcing

    Major Systems

    Manhattan PkMS

    SAP R/3

    GAINS

    Key Challenges

    Different demand replenishment planning solutions

    Supplier performance

    Operational forecasting

  • Name of presenter here Title of presentation

    The Supply Chain NumbersDec 2002 Dec 2008

    SKULs 1.15 million 3.5 million

    Stock Investment $67 million $225 million

    DC Space 15,000 m2 88,000 m2

    $23m saving in LFL SCA inventory >1% pt improvement in OOS 0.5% pt reduction in logistics costs as a % of sales

    $15m investment in supply chain infrastructure $10m investment in supply chain systems

  • Name of presenter here Title of presentation

    Future Development InitiativesInfrastructure

    None planned!

    Process Development

    Flow Thru / Cross Dock

    Voice picking

    VMI / VOI

    Consistent demand replenishment planning solution across the Group

    Inventory Optimisation

    Trade Partner CollaborationSystems Development

    Enhancing existing systems to support process development People Development

    Same Headcount Bigger Jobs

    Leadership Development

    Team Member Skills

  • Name of presenter here Title of presentation

    Reflections

    Appropriate balance of long term and short term focus

    Culture change is the key driver Strategic Planning

    Organisational Alignment

    Cross Functional Approach

    Fact Based Analysis

    Process Discipline

    Invest in Capability Development not just investment in infrastructure, systems and processes

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    Key Observations

  • Name of presenter here Title of presentation

    Key Observations & Summary

    planning ahead

    self funding growth

    Why do these opportunities exist?

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    Planning Ahead

    Better to build in efficiencies and capabilities up-front!

    improves chance of survival and success

    reduces the magnitude of the problem later on

    a key theme of the Supercheap Auto Group story

  • Name of presenter here Title of presentation

    Self Funding Growth improve operating cash flow (OCF) today increase customer service levels & sales reduce capital intensity of future growth improve ROCE levers and ratios underpinning the

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