inventory reduction project - ecr indonesia 2003
TRANSCRIPT
Inventory ReductionInventory Reduction ECR Annual Conference ECR Annual Conference
February 2003February 2003
Inventory ReductionInventory Reduction ECR Annual Conference ECR Annual Conference
February 2003February 2003
Budianto Hariadi – P&G Logistics ManagerBudianto Hariadi – P&G Logistics Manager
Theo Maulana – Toserba Yogya Non Food MD Theo Maulana – Toserba Yogya Non Food MD
Budianto Hariadi – P&G Logistics ManagerBudianto Hariadi – P&G Logistics Manager
Theo Maulana – Toserba Yogya Non Food MD Theo Maulana – Toserba Yogya Non Food MD
OutlineOutlineOutlineOutline
IntroductionIntroduction
SituationSituation
ObjectiveObjective
Managing The ChangeManaging The Change
Result – ToolResult – Tool
Key LearningKey Learning
IntroductionIntroduction
SituationSituation
ObjectiveObjective
Managing The ChangeManaging The Change
Result – ToolResult – Tool
Key LearningKey Learning
Established since 1873 at Cincinnati, Ohio, Established since 1873 at Cincinnati, Ohio, US, in Consumer Good industry with US, in Consumer Good industry with current annual sales of $ 40+ billion. current annual sales of $ 40+ billion.
P&G Indonesia established in 1989. P&G Indonesia established in 1989. Distribute Vicks Health Care product line, Distribute Vicks Health Care product line, Pantene, Head & Shoulder, Rejoice, Pantene, Head & Shoulder, Rejoice, Ascend, Oil of Olay, Pampers, Whisper and Ascend, Oil of Olay, Pampers, Whisper and Pringles.Pringles.
Company Mission: Company Mission: Touching Lives, Improving Life.Touching Lives, Improving Life.
Established since 1873 at Cincinnati, Ohio, Established since 1873 at Cincinnati, Ohio, US, in Consumer Good industry with US, in Consumer Good industry with current annual sales of $ 40+ billion. current annual sales of $ 40+ billion.
P&G Indonesia established in 1989. P&G Indonesia established in 1989. Distribute Vicks Health Care product line, Distribute Vicks Health Care product line, Pantene, Head & Shoulder, Rejoice, Pantene, Head & Shoulder, Rejoice, Ascend, Oil of Olay, Pampers, Whisper and Ascend, Oil of Olay, Pampers, Whisper and Pringles.Pringles.
Company Mission: Company Mission: Touching Lives, Improving Life.Touching Lives, Improving Life.
Insert customer facilities picture here.Insert customer facilities picture here. Shelf Shelf StoreStore WarehouseWarehouse
Insert customer facilities picture here.Insert customer facilities picture here. Shelf Shelf StoreStore WarehouseWarehouseGriya Buah BatuGriya Buah Batu
Yogya Sunda Yogya Sunda
Yogya BIPYogya BIP
Yogya KepatihanYogya Kepatihan
SituationSituationSituationSituation
Buy more for Out-of-Stock. Quick decision for urgent, often not data-based. Inventory not regularly reviewed. P&G – Yogya together drive sales. (Sales-oriented) P&G not regularly review inventory. P&G acted upon OOS only. P&G had high Service Level.
Buy more for Out-of-Stock. Quick decision for urgent, often not data-based. Inventory not regularly reviewed. P&G – Yogya together drive sales. (Sales-oriented) P&G not regularly review inventory. P&G acted upon OOS only. P&G had high Service Level.
95% 52
50%
60%
70%
80%
90%
100%
Service Level Inventory
0
10
20
30
40
50
60
Days
ObjectiveObjectiveObjectiveObjective
Reduce inventory to increase cash-available at Reduce inventory to increase cash-available at Yogya without impact to store service level.Yogya without impact to store service level.
Reduce inventory to increase cash-available at Reduce inventory to increase cash-available at Yogya without impact to store service level.Yogya without impact to store service level.
650 million
rp.
650 million
rp.
Project TeamProject TeamProject TeamProject Team
Budianto Hariadi – Logistics Manager, P&G Budianto Hariadi – Logistics Manager, P&G Eric Tendean – Account Manager, P&GEric Tendean – Account Manager, P&G
Shumit Kapoor – MR Channel Leader, P&GShumit Kapoor – MR Channel Leader, P&GCeejay Bate – Logistics Manager, P&GCeejay Bate – Logistics Manager, P&G
Budianto Hariadi – Logistics Manager, P&G Budianto Hariadi – Logistics Manager, P&G Eric Tendean – Account Manager, P&GEric Tendean – Account Manager, P&G
Shumit Kapoor – MR Channel Leader, P&GShumit Kapoor – MR Channel Leader, P&GCeejay Bate – Logistics Manager, P&GCeejay Bate – Logistics Manager, P&G
Theo Maulana – Non Food MD, Yogya Theo Maulana – Non Food MD, Yogya Gunawan T. – Non Food MD Sub Head, Yogya Gunawan T. – Non Food MD Sub Head, Yogya Lucia Linda Edi – Non Food MD Manager, Yogya Lucia Linda Edi – Non Food MD Manager, Yogya Widjaja Tjandra – MD Director, Yogya Widjaja Tjandra – MD Director, Yogya Dede Martono – DC Manager, Yogya Dede Martono – DC Manager, Yogya Riana – Kepatihan Store Buyer, Yogya Riana – Kepatihan Store Buyer, Yogya Susana – BIP Store Buyer, Yogya Susana – BIP Store Buyer, Yogya Chi Yu – Buah Batu Store Buyer, YogyaChi Yu – Buah Batu Store Buyer, YogyaLeony – Sunda Store Buyer, YogyaLeony – Sunda Store Buyer, Yogya
Theo Maulana – Non Food MD, Yogya Theo Maulana – Non Food MD, Yogya Gunawan T. – Non Food MD Sub Head, Yogya Gunawan T. – Non Food MD Sub Head, Yogya Lucia Linda Edi – Non Food MD Manager, Yogya Lucia Linda Edi – Non Food MD Manager, Yogya Widjaja Tjandra – MD Director, Yogya Widjaja Tjandra – MD Director, Yogya Dede Martono – DC Manager, Yogya Dede Martono – DC Manager, Yogya Riana – Kepatihan Store Buyer, Yogya Riana – Kepatihan Store Buyer, Yogya Susana – BIP Store Buyer, Yogya Susana – BIP Store Buyer, Yogya Chi Yu – Buah Batu Store Buyer, YogyaChi Yu – Buah Batu Store Buyer, YogyaLeony – Sunda Store Buyer, YogyaLeony – Sunda Store Buyer, Yogya
Managing The ChangeManaging The ChangeManaging The ChangeManaging The Change
1.1. Assess The Supply ChainAssess The Supply Chain from service level, from service level, schedules, target inventory.schedules, target inventory.
2.2. Identify major cause of excess inventoryIdentify major cause of excess inventory
3.3. Implement corrective actionsImplement corrective actions
4.4. Track progress on Inventory and Service Level.Track progress on Inventory and Service Level.
1.1. Assess The Supply ChainAssess The Supply Chain from service level, from service level, schedules, target inventory.schedules, target inventory.
2.2. Identify major cause of excess inventoryIdentify major cause of excess inventory
3.3. Implement corrective actionsImplement corrective actions
4.4. Track progress on Inventory and Service Level.Track progress on Inventory and Service Level.
Major Causes & Corrective ActionsMajor Causes & Corrective ActionsMajor Causes & Corrective ActionsMajor Causes & Corrective Actions
From:
Traditional buyer-seller relationship Sales-oriented
Buy more reaction for stockouts.P&G acted on stockouts onlyP&G had high Service Level
Traditional Inventory ControlTotal inventory evaluation
Manual Ordering Process Judgmental order generation
To:To:
Supply Chain thinkingSupply Chain thinkingProfit-orientedProfit-orientedOfftake based orderOfftake based orderP&G acted on stockouts & excess inventoryP&G acted on stockouts & excess inventoryP&G had high service level, reduce safety P&G had high service level, reduce safety inventoryinventory
Inventory ManagementInventory ManagementBreakdown into types of inventory: cycle Breakdown into types of inventory: cycle inventory, in transit inventory, seasonal/ inventory, in transit inventory, seasonal/ promotional inventory, safety inventory.promotional inventory, safety inventory.
Offtake Based OrderingOfftake Based OrderingOrder generation using built-in formulaOrder generation using built-in formula
Project Schedule Project Schedule Project Schedule Project Schedule
Project start to finish was only Project start to finish was only 93 days93 days.. Getting commitment up-front is key. Getting commitment up-front is key. Clear objectives, actionable and structured next Clear objectives, actionable and structured next
steps. steps.
Project start to finish was only Project start to finish was only 93 days93 days.. Getting commitment up-front is key. Getting commitment up-front is key. Clear objectives, actionable and structured next Clear objectives, actionable and structured next
steps. steps.
Inventory ReductionInventory ReductionInventory ReductionInventory Reduction
AreaArea Major Action Major Action BaseBase GoalGoal ActualActual ReductReduct
ionion
MM rp.MM rp. MM rp.MM rp. MM rp.MM rp. %%
StoreStore Offtake-based orderOfftake-based order
323323 169169 219219 32%32%
DCDC
Offtake-based purchase Offtake-based purchase order order
Synchronize deliveriesSynchronize deliveries 11281128 633633 372372 67%67%
TotalTotal14511451 802802 591591 59%59%
% Out-of-Stock% Out-of-Stock5.0%5.0% 5.0%5.0% 3.5%3.5% 1.5%1.5%
Inventory & Service LevelInventory & Service LevelInventory & Service LevelInventory & Service Level
Check pointCheck point
The tool: offtake based order The tool: offtake based order The tool: offtake based order The tool: offtake based order
INPUT DATAINPUT DATA Sales dataSales data Lead Time + Order Lead Time + Order
CycleCycle Promotional Promotional Actual InventoryActual Inventory Exception / OverwriteException / Overwrite
INPUT DATAINPUT DATA Sales dataSales data Lead Time + Order Lead Time + Order
CycleCycle Promotional Promotional Actual InventoryActual Inventory Exception / OverwriteException / Overwrite
CHECK POINTCHECK POINT # Items Overstock# Items Overstock # Items Out-of-Stock# Items Out-of-Stock Inventory DaysInventory Days Perpetual controlPerpetual control
CHECK POINTCHECK POINT # Items Overstock# Items Overstock # Items Out-of-Stock# Items Out-of-Stock Inventory DaysInventory Days Perpetual controlPerpetual control
An excel spreadsheet to support inventory decision, whether to replenish An excel spreadsheet to support inventory decision, whether to replenish the product or not.the product or not.
The toolThe toolThe toolThe tool
INVENTORYCONTROL
SHEET
DAILY SELL OUT
STOCK
INV
EN
TO
RY
TA
RG
ET
PR
OM
OTIO
NOR
A
LO
CA
TIO
N
PURCHASEORDER
The toolThe toolThe toolThe tool
INVENTORY CONTROL SHEET BUAH BATUTanggal Order: 2/2 ORDER CYCLE : 7 # Item Out of Stock : 9
Tanggal Penerimaan Barang: 2/7 LEAD TIME : 5 # Item Overstock : 10
Lokasi Inventory (Nama Store/Gudang):
ICO Days (A) : 12 Target Max. Stock : 30 Actual Stock : 18
No. Item Code Item Description Case Pack
Daily Sell Out (pcs)
Promo/ Forecast
(%)
ICO(pcs)
Ending Stock (pcs)
Suggest Order(crt)
Final Order (crt)
Stock: Before Order (days)
Stock: After Order(days)
Last Week Stock (days)
Note
1 4500377 ASCEND CLEAR SHPO 100 ML 48 1.5 0% 18 0 0 1 0 31 100 OVERSTOCK2 4500117 ASCEND CLEAR SHPO 200 ML 24 0.5 0% 6 60 0 0 120 120 64 OVERSTOCK3 4500155 ASCEND CLEAR SHPO 7.5 ML 64 6.1 0% 73 64 0 0 11 11 64 4 4510147 ASCEND LEAVE ON 180 ML 12 1.3 0% 15 5 1 0 4 4 12 5 4510338 ASCEND LEAVE ON 50 ML (48) 48 1.6 0% 20 0 0 1 0 29 13 6 4510208 ASCEND LEAVE ON 7.5 ML (384)64 6.8 0% 81 60 0 0 9 9 64 7 4510345 ASCEND LEAVE ON INTENSIVE 50 ML (48)48 1.3 0% 16 0 0 0 0 0 0 8 4510321 ASCEND LEAVE-ON INT. 180 ML12 0.9 0% 10 4 1 0 5 5 10 9 4510154 ASCEND RINSE OFF NORMAL 100 ML (48)48 0.7 0% 8 1 0 0 2 20 9 10 4510161 ASCEND RINSE OFF NORMAL 200 ML (24)24 0.2 0% 2 0 0 0 0 0 0 11 4510215 ASCEND RINSE OFF NORMAL 7.5 ML (384)36 3.4 0% 41 50 0 0 15 15 50 12 4410867 FORMULA 44 120 ML (6'SX8) 6 0.2 25% 3 5 0 0 20 20 6 13 4410843 FORMULA 44 30ML (6'SX18) 6 0.5 25% 8 2 1 0 3 3 12
SORT BY INV.
EXTRACT
SORT BY ITEM DESC SORT BY ITEM CODEINVENTORY CONTROL SHEET BUAH BATU
Tanggal Order: 2/2 ORDER CYCLE : 7 # Item Out of Stock : 9
Tanggal Penerimaan Barang: 2/7 LEAD TIME : 5 # Item Overstock : 10
Lokasi Inventory (Nama Store/Gudang):
ICO Days (A) : 12 Target Max. Stock : 30 Actual Stock : 18
No. Item Code Item Description Case Pack
Daily Sell Out (pcs)
Promo/ Forecast
(%)
ICO(pcs)
Ending Stock (pcs)
Suggest Order(crt)
Final Order (crt)
Stock: Before Order (days)
Stock: After Order(days)
Last Week Stock (days)
Note
1 4500377 ASCEND CLEAR SHPO 100 ML 48 1.5 0% 18 0 0 1 0 31 100 OVERSTOCK2 4500117 ASCEND CLEAR SHPO 200 ML 24 0.5 0% 6 60 0 0 120 120 64 OVERSTOCK3 4500155 ASCEND CLEAR SHPO 7.5 ML 64 6.1 0% 73 64 0 0 11 11 64 4 4510147 ASCEND LEAVE ON 180 ML 12 1.3 0% 15 5 1 0 4 4 12 5 4510338 ASCEND LEAVE ON 50 ML (48) 48 1.6 0% 20 0 0 1 0 29 13 6 4510208 ASCEND LEAVE ON 7.5 ML (384)64 6.8 0% 81 60 0 0 9 9 64 7 4510345 ASCEND LEAVE ON INTENSIVE 50 ML (48)48 1.3 0% 16 0 0 0 0 0 0 8 4510321 ASCEND LEAVE-ON INT. 180 ML12 0.9 0% 10 4 1 0 5 5 10 9 4510154 ASCEND RINSE OFF NORMAL 100 ML (48)48 0.7 0% 8 1 0 0 2 20 9 10 4510161 ASCEND RINSE OFF NORMAL 200 ML (24)24 0.2 0% 2 0 0 0 0 0 0 11 4510215 ASCEND RINSE OFF NORMAL 7.5 ML (384)36 3.4 0% 41 50 0 0 15 15 50 12 4410867 FORMULA 44 120 ML (6'SX8) 6 0.2 25% 3 5 0 0 20 20 6 13 4410843 FORMULA 44 30ML (6'SX18) 6 0.5 25% 8 2 1 0 3 3 12
SORT BY INV.
EXTRACT
SORT BY ITEM DESC SORT BY ITEM CODE
Menu: Sort by item desc.Sort by item codeSort by Inventory
Key LearningKey LearningKey LearningKey Learning
Paradigm shift on the relationships of inventory and service Paradigm shift on the relationships of inventory and service level. level.
Know clearly where we are now and where we want to be. Know clearly where we are now and where we want to be.
Improving the flow of information reduce the inventory.Improving the flow of information reduce the inventory.
Multi-dimensional approach; process, system, people.Multi-dimensional approach; process, system, people.
Collaboration relationship is critical.Collaboration relationship is critical.
Paradigm shift on the relationships of inventory and service Paradigm shift on the relationships of inventory and service level. level.
Know clearly where we are now and where we want to be. Know clearly where we are now and where we want to be.
Improving the flow of information reduce the inventory.Improving the flow of information reduce the inventory.
Multi-dimensional approach; process, system, people.Multi-dimensional approach; process, system, people.
Collaboration relationship is critical.Collaboration relationship is critical.