presentation to cfo west 2014
DESCRIPTION
My presentation to CFO West conference in San Francisco on Friday, 31 October 2014. I review our company's strategic response to a competitive challenge, and provide key take-aways for the audience of approximately 300 financial executives.TRANSCRIPT
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Daniel G. Reynolds October 31, 2014
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Collaborate with Suppliers
Using Technology
to Drive Performance
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About Our Industry • Retail lawn and garden centers
–Independents
–Local/regional chains
• No Internet retailers
• Fragmented suppliers
• No imports of live plants
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Fragmented Suppliers 4
Local/Regional Chains
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No Imports of Live Plants CFR § 319.37-8:
– Plants for planting at the time of importation into the United States must be free of • Sand • Soil • Earth • and other growing media
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About Our Company
• 2nd largest garden center chain
• Dallas and Houston markets
• Public company (SEC exempt)
• 70% of revenue from live plants
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Today’s Agenda • Competitive challenge • Strategic response • Rethinking how we stock our
stores • Rethinking how we work with
suppliers • Key take-aways
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Competitive Challenge • Launch of Home Depot Landscape
Supply –5 stores in Atlanta –6 stores in Dallas
• Dallas stores within close proximity to our Calloway’s stores
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Strategic Response
• Total retail focus
• The best merchandise
• The best people
• The best shopping experience
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Total retail focus
• Divested all growing & wholesale operations – Distraction of management attention
– Money pit
– Antagonized supply chain
• Deregistered from SEC – Odd-lot share buyback
– Reduced administrative overhead
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The Best Merchandise
• Live plants drive everything else
• The best quality
• The best selection
• Reasonable pricing
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The Best People
• Training
• State certifications
• Low-value paperwork tasks
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The Best Shopping Experience
• Take care of the customer first
• Everything else comes second
• Make the store look, feel and smell great
• Have fun and informative events
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How We Stock Our Stores
• Before –No UPCs on live plants
–Manual cash registers
–No item sales data
–Cycle counts several times/week
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How We Work With Our Suppliers
• Before –Store manager purchased
inventory
–Over 500 live plant suppliers
–Availability via fax
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Transition 1: Centralize Buying • Vice President of Merchandising
– With full staff – Best people from the stores
• Team self-assigned product lines to Buyers based on supply chain
• Plan, source, stock, replenish, promote
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Transition 2: Planning
Items – use Pareto (80/20) – Sales plans
– Stock plans
Suppliers – use Pareto (80/20) – Supply plans
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Transition 3: Execute
• Manual cash registers
• Spreadsheets
• Cycle counts
• Updated plans with results data
• Continuously refine methodology
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Transition 4: Automate
• POS system • Back office purchasing • Our own UPCs • Web application for collaboration
– Buyers – Suppliers
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Web Application for Collaboration
• Buyer develops plans
–Sales
–Stock
–Supply 20
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Web Application for Collaboration
• Supplier reviews plans –Confirm –Propose
changes
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Web Application for Collaboration
• Supplier updates quantity
• Retail-ready merchandise
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Web Application for Collaboration
• Buyer completes
–Supplier selection
–Store allocation
–Purchase order
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Results
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Before After
Number of SKUs ? 73,000
Number of live plants suppliers 500+ 138
Weekly store manager hours spent on purchasing 20+ 0
Average inventory per store $315,000 $196,000
Finance, IT, administrative staff 28 9
Web application development cost $60,000
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Take-Aways Designing the new process:
–Put your top people on it –Show them the goal –Let them show you how to reach it –Give them the tools and authority –They will take you past your goal –And be missionaries for the change
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Take-Aways Getting your suppliers on board: • Understand your suppliers’ business
–Know their pain points –Be their best customer
• Pick reliable suppliers • Make sure both of you make more
money
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Take-Aways Implementing the technology: • Use Web apps in the cloud
–Faster to develop –Runs anywhere on anything –Keeps your network secure
• Share all the data • Give away the technology
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One More Thing…
• …Home Depot Landscape supply closed all 11 of its stores
• And shut down the division
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Questions
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