Three Examples of Shelf-Connected Supply Chains

Driven to serve customers in the best way at the lowest cost, leading retailers and consumer products manufacturers are embracing collaborative planning at the shelf. They know that in order to capitalize on rapidly-changing buying behavior, they must quickly respond to consumer choices at the shelf and across all buying channels. Doing this effectively requires a new breed of technology that can cost-effectively scale to handle the vast amounts of data captured at the point of purchase to drive millions of decisions. This has prompted the emergence of a new trend: the shelf-connected supply chain.

 

On August 3, 2011, during a CGT web seminar, industry experts and trendsetters in shelf collaboration joined together to share their experiences. Fred Baumann, vice president of industry strategy at JDA Software Group, and Ben Pivar, vice president of supply chain services at Capgemini, outlined the key capabilities to build a shelf-connected supply chain, as well as highlighted real-world customers who’ve achieved this ultimate goal. Here are some other highlights from the web event:

 

--Baumann kicked off the event by referencing a quote by A.G. Lafley, former CEO of P&G. “For most consumer goods companies out there today, the first moment of truth occurs at a real or virtual shelf. Today, we’re going to focus our discussion on ways to capitalize on that first moment of truth so that the second moment is actually feasible,” he said. Pivar and Baumann offered the audience a better understanding of the benefits of a shelf-connected supply chain and how you can deliver results, like improved in-stocks at store level by more than 18 percent; lowered weeks of supply by 27 percent; and improved forecast accuracy by 40 percent.

 

--Next, Pivar and Baumann discussed the impacts of key trends in retail today. For example, external drivers — brand switching, real-time consumer advocacy, mobile technology adoption, growing sustainability concerns and much more — are forcing consumer goods manufacturers to “transform themselves”. They can do this by going from mature markets and traditional retail to emerging markets and non-traditional retail, from mass marketing to social and digital media, from catalogs to smart phones, and so on. “In the past we really couldn’t do all the analysis that it took to go down to the shelf level, and now we’ve got the technology and scalability in place that allows us to do that more quickly,” said Pivar.

 

--The conversation led to other topics, including the shelf-connected enterprise, a framework overview, leading practices, key success factors, business cases from Sony Electronics, Frito-Lay and ScottsMiracle-Gro, and tips for getting started. “You don’t need to do everything all at once, but doing things in a silo can create significant longer term problems and potential for rework,” closed Pivar.

 

To listen to this event in its entirety, click here.