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Global Kickoff 2011
Manhattan Associates Value Assessment
(MAVA):
Executive Summary
2 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Stores Post-Sale ecommerce
Home Delivery Distribution
1. Outdated Home Delivery system
Highly modified / difficult to maintain & upgrade
Requires highly specialized users
Contains design flaws & allows data entry errors
Lacks documentation
2. Multiple fulfillment systems, not fully integrated
3. Limited visibility to…
Order fulfillment status
Inventory availability
Returns & unsuccessful deliveries
4. Inventory availability updated only once per day
5. 2 different WMS in the same fulfillment facility
6. Product not available in ecom DC is not displayed
in web storefront
Key Challenges & Areas of Opportunity
Cross-Channel Enablement
1. Buy online, Pick Up in Store
2. “Save the Sale”
3. Cross-Channel Inventory Management
4. Buy Anywhere, Return Anywhere
Suppliers Stores Retail DC Ecom DC
Home Delivery System
AS400
Paris 2
Business & Financial Impacts
↑ Shipment delays unhappy customers
↑ More out-of-stocks and lost sales
↑ Higher credit notes
↑ Higher operating costs in inventory, transportation, labor,
capacity
↑ Higher IT support costs
↓ Poor customer experience and lower retention rates
3 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Proposed Supply Chain Solutions
Stores Post-Sale
Suppliers Stores
Integration Framework
ecommerce
Distributed Order Management
Reverse Logistics Management
Retail DC Ecom DC
Key Solution Features
1. Flexible technology that is easy to change and adapt
2. Standard integration with WebSphere Commerce
3. Global visibility to inventory, orders, and shipments in
DCs, suppliers, stores, and in-transit
4. Configurable rules and workflows
5. Rules-based order orchestration for Home Delivery
• capture all order types – ecommerce, retail, call
center orders
• real-time Available-to-Promise (ATP) capabilities for
use in stores or on web
• auto select most optimal location for distributing
orders across channels (suppliers, DC, stores) based
on geography and business rules
• dynamic order prioritization and allocation
• supplier drop ship orchestration
6. Virtual inventory segmentation across channels
7. Advanced Returns Processing
• Rules-Based Returns Initiation (Web, Call Center)
• Returns Processing (DC or Store)
8. Cross-Channel Enablement
• Buy Online, Pick Up in Store
• Buy Online, Return to Store
• Buy anywhere, fulfill from anywhere
Sell
Orc
he
str
ate
F
ulfill
4 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Se
ll O
rch
estr
ate
F
ulfill
Proposed Technology Roadmap
Web Storefront
Point of Sale
Call Center
In-Store Capture
Order & Inventory Visibility
Order Sourcing / Allocation
Order Creation & Release
Returns & Exchanges
Retail DC Fulfillment
Ecom DC Optimization
Vendor Fulfillment
Store Fulfillment
Homegrown
Paris POS
Post-Venta
Paris POS
Paris 2
Paris 2
Paris 2
Paris 2
Potenciado
B2B
Actual
Warehouse
Management
Paris POS
Post-Venta
Paris POS
MMS
B2B
Phase 1
Warehouse
Management
MMS
Warehouse
Management
DOM
Sales Order
Management
Reverse Logistics
Management
DOM
Paris POS
CPWEB
CPWEB
MMS
MMS
MMS
Levicom
Future Phases
Warehouse
Management
Warehouse
Management
Supplier
Enablement
Store Gateway
Distributed
Selling
DOM
Sales Order
Management
Reverse Logistics
Management
5 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
“We Need a Business Case”
6 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Gift List
1. EMS Gloves
2. EMS Hat
3. …
EMS Store - Ashburn
EMS Store - Arlington
1. “Buy Online, Pick Up in Store”
2. “Incremental In-Store Sales”
3. “Save the Sale”
Holiday Shopping with Eastern Mountain Sports
7 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Summary of Savings
Hard Savings Quantified:
Home Delivery Distribution
I. Increase Online Sales – “Buy Online, Pick Up in Store”
II. Reduced losses due to Home Delivery system
downtime
- Reduced Delays
- Reduced DC Down Time
- Elimination of Double Deliveries and Extra Trucks
- Reduced Credit Notes
- Improved Service Levels
Cross-Channel Enablement
III. Increases Retail Sales – “Save the Sale”
IV. Increase in Inventory Turns
Soft Savings:
• Improved productivity of managers and supervisors
Hard Savings Not Quantified:
• Reduced IT support costs
• Productivity at DCs, Call-center, IT & Stores
• Visibility of order and inventory status
• Direct ship from supplier savings
• Inventory segmentation-related savings
8 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
I. Online Sales Parameters and Assumptions (USD$)
Buy Online/Pickup In Store Inputs
Inputs
Today: No in-store
pickup
With In-store Pickup
via MA Solution
Online Sales as % of Revenue 10%
Estimated Online Revenue 124,087,081$ USD$
Online transactions per year 150,000
Average in-store pickups 0% 25%
Online average out of stock % 0.25%
Percent of online out of stocks that result in no sale 50% 25%
Average number of cart starters per day 411
Cart abandonment at shipping costs 15% 10%
Average cart size $210 USD$
Additional in-store spend when picking up in store $14.70
Percent of in-store pickups that are incremental trips 30%
In-store pickups per year 37,594
Percent of missed pickups 15%
9 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
I. Online Sales Including “Buy Online / Pick Up in Store” Analysis In-Store Pickup - Cost and Benefit Calculations
With No In-Store
Pick Up Solution
(Today)
With proposed MA
In-Store Pick-Up
Solution
Current online sales $124,087,081
Increased revenues due to larger pool of available online inventory
Estimated increase in online sales (from
store inventory availability online) 2.00%
New estimated online sales 126,568,823$
Net improvement over no in-store pickup $2,481,742 USD$
Online sales lost to out of stocks
Online out of stocks 0.25%
OOS that results in no sale 50% 25%
% of online sales lost to OOS 0.125% 0.0625%
Online sales lost to out of stocks $158,211 $79,106 USD$
Net improvement over no in-store pickup $79,106 USD$
Online sales lost at shipping costs
Average # of cart starts per day 411
Cart abandonment at shipping 15% 10%
Average cart size $210.00
Online sales lost at shipping costs $4,725,000 $3,150,000 USD$
Net Improvement over no in-store pickup $1,575,000 USD$
Total sales lost online $4,883,211 $3,229,106 USD$
Net improvement over no in-store pickup $1,654,106 USD$
10 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
I. Online Sales Including “Buy Online / Pick Up in Store” Analysis (cont.) Additional in-store sales from pickups
Average in-store pickups 25%
Total in-store pickup trips 37,500
Percent of in-store pickups that are incremental trips 30%
Total incremental trips 5,625
Additional in-store spend at pickup $14.70
Total potential sales from in-store pickup $82,688 USD$
Percent of missed in-store fulfillment of pick-ups 15%
Total lost in-store sales $12,403 USD$
Total net sales from in-store pickup $70,284 USD$
Total improvement in sales over no in-store pickup $4,285,237 USD$
Incremental Fulfillment Costs
$4,285,237
Average Unit Cost per Item $14.86
Additional Items Sold Through Store Channel 288,375
Incremental Fulfillment Costs per Item $2.00
Total Incremental Fulfillment Costs $575,307 USD$
Net Improvement in sales after fulfillment costs $3,709,930 USD$
Paris Online Sales Gross Margin 20.0%
Total Annual Estimated Increased DTC Profits $741,986 USD$
Improvement 2.9%
Total Saved Sales
11 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Case Study: Store Fulfillment with Optimized Sourcing from Stores
Higher Sales Growth
“ We have significantly cut lost sales by routing customer orders to stores when the
DC is out-of-stock. We also see a good lift in our smaller footprint stores that can
now sell our full assortment. ”
Higher Customer Retention and Satisfaction
“ We resolved our biggest customer compliant by making our store level inventory
available online and now have the foundation to allow the customer to reserve the
product for in-store pickup. ”
12 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
II. Home Delivery – Perdida Económica Sistema DaD *
Beneficios Paris nuevo DaD
# $ Margen $ CLP $ USD
Atraso Solicitudes Stock 14,003 2,801 487,764,391 20% 97,552,878 204,861 $
Atraso Solicitudes Internet 8,709 1,742 303,351,889 20% 60,670,378 127,408 $
Atraso Solicitudes PE-PD 7,101 1,420 247,359,996 20% 49,471,999 103,891 $
Dias CD sin Operación 5 43 51,000,000 100% 51,000,000 107,100 $
Doble Entregas 371 64,565,646 20% 12,913,129 27,118 $
Horas Hombre Administracion 14 21000.0 6,552,000 100% 6,552,000 13,759 $
Notas de Credito Año (1,3%) 30% 846,483,985 20% 169,296,797 355,523 $
Camion Extra Año 1 12 14,400,000 100% 14,400,000 30,240 $
Aumento de Venta Mejor Servicio 441,716 0 0 20% 0 - $
AHORRO FINAL
CLP 461,857,182 $
476 USD 970,288 $
* Savings estimated by Paris’ Logistics team and provided to Manhattan Associates as is
13 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
III. “Save the Sale” Value Analysis
13
14 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
III. Retail Parameters and Assumptions
General Company and Retail InputsCurrent Number of Stores 33
Total Revenue $1,240,870,810
Estimated Home Delivery Revenue $128,403,322
Estimated Online Revenue $124,087,081
Total Store Revenue (Less Home Delivery and Online) $988,380,407 USD$
Cost of Goods Sold (% of Revenue) 68.4%
Average Transaction Size (In Store) $50.52 USD$
Average Items per Transaction (In Store) 3.4
Average Unit Cost $14.86 USD$
Average Store Conversion Rate 25%
Incremental handling costs of in-store fulfillment $2.00 per item USD
When an employee can't help a customer, we lose 0.10 items per sale
15 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
III. Retail Parameters and Assumptions
Save the Sale Inputs
% of Store Visits Where Customers Can't Find Item 15%
Customer Retail Habits
Of those customers that can't find an item, 60% (%) walk away without buying anything
10% (%) will settle for another item instead
30% (%) will ask an employee for help
100% Math Check
Of those customers that ask an employee for help, 10% (%) will find the item
25% (%) walk away without buying anything
20% (%) will settle for another item instead
45% (%) will have the employee call another store
100% Math Check
Of those customers that ask to call another store, 50% (%) will find the item
50% (%) walk away without buying anything
0% (%) will settle for another item instead
100% Math Check
Improvement Parameters
Of those customers that ask an employee for help, 40% (%) will be serviced by employee in the future using MA Solution
Broken out across their actions: 30% (%) Normally would have walked away without buying anything (now serviced)
10% (%) Normally would have asked employee to call another store (now serviced)
40% Math Check
16 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
III. Retail “Save the Sale” Value Analysis Benefit Area: Lost Store Sales
Improved Profits from MA Employee Retail Service Solution
Number of Stores 33
Total Store Revenue $988,380,407 USD$
Average Store Transaction Size $50.52
Average # of Transactions Per Store Per Year 592,807
Conversion Rate (In Store) 25%
Average # of Visits Per Store Per Year 2,371,228
Percent Number
Visits That Can't Find an Item 15% 355,684
Of Visits That Can't Find an Item:
Visits that walk away 60% 213,411
Visits that ask for help and then walk away 7.5% 26,676
Visits that ask for help, call another store, then walk 6.8% 24,009
Total # of lost visits per store per year 264,096
Average Transaction Size (In Store) $50.52 USD$
Average Conversion Rate (In Store) 25%
Total lost sales per store per year $3,335,784 USD$
Total Chain Lost Sales $110,080,868 USD$
Visits That Normally Walk, Now Serviced by Employee with MA Solution 4.1% 14,405
Visits That Normally Call Another Store, Now Serviced by MA Solution 0.7% 2,401
Total # of lost visits saved 16,806
Total saved sales per store per year $212,277 USD$
Total Paris Retail Saved Sales $7,005,146 USD$
17 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
III. Retail “Save the Sale” Value Analysis
Incremental Fulfillment Costs
Total Saved Sales $7,005,146 USD$
Average Unit Cost per Item $14.86 USD$
Additional Items Sold 471,410
Percent Picked Up in Store Channel (vs. Shipped) 85%
Additional Items Sold through Store Channel 400,699
Incremental Fulfillment Costs per Item $2.00 USD$
Total Incremental Fulfillment Costs $799,394 USD$
Net Improvement in sales after fulfillment costs 6,205,752$
Paris Retail Gross Margin 31.6%
Total Annual Estimated Increased Retail Profits $1,961,018 USD$
Improvement 0.63%
18 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Case Study: The Men’s Wearhouse Cross Channel Enabling the Store Environment
• Real time ATP to save lost sales
• Real time order status
• Inventory visibility by location
• Buy online, pickup in store
• Buy online, return in store
• Store receiving
• Store transfers
19 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
• Paris Current Days of Inventory = 72 (5.07 Turns)
• For SIC Code 5211 – Department Stores (South America) – Median = 75
– 1st Quartile = 50
IV. Inventory Analysis – Industry Averages
20 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
IV. Inventory Savings – Improved Turns
• Inventory Segmentation: – Leveraging inventory across online and retail channels as one virtual pool
Inventory Characteristics (USD$)
Current and Planned Inventory Characteristics
Current Year 1 Year 2 Year 3 Year 4 Year 5
Inventory Level $167,333,999 $192,434,098 $211,677,508 $232,845,259 $256,129,785 $281,742,763
Planned Inventory Growth Rate 15% 10% 10% 10% 10%
Inventory Turns per Year 5.07 5.20 5.20 5.20 5.20 5.20
Average Inventory Days On-Hand 71.99 70.22 70.22 70.22 70.22 70.22
Cost of Goods Sold (COGS) $848,383,373 $1,000,243,997 $1,100,268,396 $1,210,295,236 $1,331,324,759 $1,464,457,235
Estimated Improvement
Year 1 Year 2 Year 3 Year 4 Year 5
Expected Percent Reduction in Inventory 2% 3% 3% 3% 3%
New Inventory Turns 5.30 5.36 5.36 5.36 5.36
New Average Inventory Days On-Hand 68.82 68.11 68.11 68.11 68.11
New Inventory Level $188,585,416 $205,327,183 $225,859,901 $248,445,891 $273,290,481
Net Change in Inventory $3,848,682 $6,350,325 $6,985,358 $7,683,894 $8,452,283
Cumulative Change $3,848,682 $2,501,643 $635,033 $698,536 $768,389
21 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
IV. Inventory Savings (cont.)
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
Year 1 Year 2 Year 3 Year 4 Year 5
Av
era
ge
On
-ha
nd
In
ve
nto
ry
Inventory Level by Year(Network)
Inventory w/o Manhattan
Inventory w/ Manhattan
Inventory Carrying Costs as a percent of Total Inventory 12.00%
$832,166
$4,272,948
Average Annual Inventory Savings (USD$)
Total 5-Year Inventory Savings (USD$)
22 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
5-Year Savings Summary (USD$)
Savings by Area (5-Year)
Savings Area $ Savings % Total Savings
I. "Buy Online, Pick Up in Store" $5,234,857 22.7%
II. Sistema DaD - Reduced HD Losses $4,530,230 19.7%
III. Retail Store Profits - "Save the Sale" $9,155,898 39.7%
IV. Cross-Channel Inventory $4,130,446 17.9%
Total $23,051,431 100%
22.7%
19.7%39.7%
17.9%
Total Savings(5 Years)
I. "Buy Online, Pick Up in Store"
II. Sistema DaD - Reduced HD Losses
III. Retail Store Profits -"Save the Sale"
IV. Cross-Channel Inventory
Savings by Area
23 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Manhattan MORE™: Resources & Methodology
• 800+ consultants worldwide. 400+ in the Americas
• Experienced staff
– With MANH: 4.7 years
– Industry: 6.3 years
– LATAM Team: 6.8 years
• Consultants specialized by solution suite:
– Distributed Order Management
– Reverse Logistics Management
– Warehouse Management
– Integration specialists
• Relevant OLM Project Team Experience in the US & LATAM
• Proven Implementation Methodology at Paris – Manhattan RPM™ certified ISO 9001 y proven at Paris during WMS deployment
24 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Manhattan Associates Implementation Team
Project Manager
Project Director
Functional
Consultant - DOM
Cesar Berenguer • 12 years
• Sr. Director, LATAM
Design Leader
DOM
Geophrey Parry • 9 years
• 20+ projects
Vaibhav Gupta 5 years
• 10+ projects
Miguel Vian • 4 years
• 5 projects
Technical
Consultant - DOM
Mike Olshansky 5 years
• 11+ projects
Manhattan Associates
Technical
Consultant - RLM
Sharan Kumar 2 years
• 5+ projects
Design Leader
RLM
Vaibhav Gupta 5 years
• 10+ projects
Functional
Consultant - RLM
Ajay
Veeraraghavan 5 years
• 10+ projects
25 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Why Manhattan Associates
Most Value Lowest TCO Least Risk
High Functional Fit to Home Delivery
Requirements
• Complete home delivery Solution for today and in the future
• Flexible technology that is easy to change and adapt
• Standard integration with WebSphere Commerce
• Rules-based order orchestration
• Advanced Returns Processing
• Virtual inventory segmentation across channels
• Cross-Channel Enablement
• Complete WMS solution for retail & ecommerce fulfillment
Experience & References
• Better understanding of Paris’ functional requirements
• Major modifications identified thru a detailed MAVA process
• Proven solutions in Latin America
• Proven solution in projects of similar size & complexity
Experienced Implementation Team
• 800+ employees across the Americas
• 700+ employees in R&D
• 250+ employees in Customer Support
• Deep retail domain expertise
Long Term Supply Chain Technology Partner
• Transparency & consistency
• Strong balance sheet (0 debt) & ability to invest ($100M+in
cash)
• $250M+ invested in SCM R&D in last 5 years
• $185M+ in cash generated in last 4 years
• Commitment and investment in Latin America
Global Kickoff 2011
Manhattan Blended Channel Solutions Brian Kinsella, Manhattan Product Management
27 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Order Lifecycle Solutions Strategic Vision
Manhattan Associates will be a recognized, best in class, proven
provider of cross channel solutions for our target markets of (1) multi
channel retail and (2) consumer goods manufacturers with retail / direct
operations
direct
retail
wholesale
28 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Your Customer Sees One Retail Brand…
29 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
… and We Believe You Need a Single Place to Manage All Her Transactions
SINGLE TRANSACTION REPOSITORY
30 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
eCommerce Continuing to Increase in Importance
“ … a stunning 40 percent of all products
purchased online are picked up in-store.”
CEO of leading electronics retailer
September, 2010
Forrester Research estimates that
online and Web-influenced offline
sales combined accounted for
42 percent of total retail sales
and that percentage will grow to
53 percent by 2014.
31 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Source: The Nielsen Company
Consumers Enter the Store with the Internet in Hand
16% 18%
21% 23%
Q2 '09(n=59,725)
Q3 '09(n=59,842)
Q4 '09(n=57,276)
Q1 '10(n=55,691)
Smartphone…
Smartphone Penetration All Mobile Subscribers, Mobile Insights, National
32 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Your Store Associates Have an Information Deficit
>
product knowledge product knowledge
Let me borrow your phone for a second …
33 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
41%
48%
63%
73%
85%
12%
75%
31%
44%
81%
Offer customized and unique product offerings
Improve operational execution across all channels
Allow customer to purchase, take delivery, or returna product through the channels of their choice
Consistent and clear explanation of productfeatures and benefits regardless of channel
Create single brand identity across all channels
How important is each of the following opportunities to create improved customer satisfaction across all channels?
Laggards Winners
What are the characteristics of tomorrow’s winning retailer?
34 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Evolution, Not Revolution
0%
31% 31%
25%
13%
6%
21%
41%
18% 15%
3%
14%
26%
34%
23%
Single ChannelOnly
< 2 years 2-5 years 5-10 years > 10 years
Winners Working Multi-Channel Longer
Laggards Average Performers Retail Winners
Source: RSR Research, February 2009
35 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Customer Centricity: The Cross Channel Imperative
OPERATING PRINCIPLES
single brand
to the customer
delight the anywhere /
anytime customer
use scale to drive profitability
ASSOCIATED PROCESSES & PRACTICES
• buy online; pick up in store
• buy online; return to store
• see store inventory via webstore and mobile
device
• avoid lost sales – sell against network wide
inventory
• endless aisle – sell vendor held and fulfilled
items
• virtual segmentation of inventory
• cross functional logistics: factor inventory,
labor and transportation costs when sourcing
• repeatable, efficient store fulfillment activities
• application consolidation and platform
leverage
36 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
The Killer Enterprise App for Retail: A Platform for Cross Channel Commerce
Network Inventory Visibility
Enterprise Order Management
CROSS CHANNEL COMMERCE PLATFORM
CUSTOMER ENGAGEMENT
RETAIL OPERATIONS
eCommerce point of sale
social platforms mobile
contact center /
store
Inventory
transaction capture in store fulfillment order orchestration
1
2 2
3 4
37 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Agenda
• See Everything – Providing Tools to Enable Accurate Network Wide Inventory
• Sell Everywhere – Distributing More Powerful Order Entry and Management Capabilities
• Fulfill Anywhere – Moving Beyond Order Orchestration to Fulfillment Optimization
– Fulfilling from the Store, A Purpose-built Solution
38 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Build a View of Network Inventory to Sell More
Suppliers /
Inspectors
Logistics Service
Providers Carriers Warehouses
Deconsolidator /
Freight Forwarder
Stores
Consumers
Direct-to-Store
Store
Gateway
Supplier
Enablement Hub
Management
Supply Chain Visibility
WMS
39 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
The Increased Importance of Accurate Store Level Inventory
inventory management
Achieve Store Inventory Integrity to Ensure High Customer Satisfaction
40 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
All Stores
Accept Inventory Updates from Trickle Polling System
Global Inventory
Visibility
inte
gra
tion f
ram
ew
ork
Distribution Centers
Use existing PIX transaction feed
Trickle
Polling DB /
Application
Real-time
trigger
Feed XML
in 15 minute
intervals
41 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Process Facility Inventory Synchronizations Use direct SQL connection to extract inventory data
Global Inventory
Visibility
DC’s
Vendors
Other Stores
ERP / Host
DC’s (from WM)
Vendors (drop
shipment)
Stores Data Extract, Transform, and
Load (ETL)
• Retrieve all inventory for all
locations each night, approx
60M records
• Data ETL allows for
complete update in several
hours
Extract and send nightly
inte
gra
tio
n fra
me
wo
rk
42 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
A Network View of Inventory Means More Sales
ERP
eCommerce / Retail / Wholesale
Global Inventory Visibility
Customer Orders / Store Allocations
Inventory Levels / Orders / Order Status
Order Management
Point of Sale Retail Replenishment eCommerce
DC1 Stores Vendors DC 2
In-Stock
(DC)
In-Stock
(Vendor)
Allocated
Available
Allocated
Available
Allocated
Available
Allocated
Available
On Order In-Transit In-Stock
(Store)
Allocated
Available
Selling / Sourcing / Allocation / Release / Monitoring
43 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Vanity Fair – Implementing an Order Hub to Increase Order Velocity
$7B multi-brand apparel and footwear wholesaler and retailer
Challenges
• Have evolved to be a direct and store based retailer, in addition to the historical wholesale business
• Substantial growth in retail and direct channels, and need cross channel solutions
• Manage a common pool of inventory, but have engineered an overly complex method of doing so
• Complexity causing order flow and inventory visibility latency
Manhattan Solution
• Sales Order Flow Management
• Warehouse Management
Implementation Timeline
• Q3 2011 Go-live
Cross channel inventory allocation
Integration with WebSphere Commerce, SAP, and Island Pacific
Inventory segmentation, including ties to i2 demand planning
44 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Save the Sale with Distributed Selling in Store
45 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Save the Sale with Distributed Selling
46 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Save the Sale with Distributed Selling - Mobile
47 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Save the Sale with Distributed Selling - Mobile
48 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Lamps Plus – A New Approach for Enterprise Order Management
$ 400M DTC and B2B specialty retailer of lighting
Challenges
• Legacy, homegrown, costly custom order management system
• Limited inventory visibility: no ability to see store inventory, sell against future inventory
• Existing order management system operates in batch – cannot respond to real-time inventory events
• In-store order management system has limited capabilities and is on aging technology
Manhattan Solution
• Distributed Selling
• Sales Order Flow Management
• Reverse Logistics Management
• Warehouse Management
Implementation Timeline
• Q4 2011 Go-live
Call center / contact center
Enterprise order management
Fully integrated returns process
49 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Optimized Sourcing from Stores
• Not all stores are created equal
when it comes to ability perform
fulfilment
• Need to simultaneously factor
inventory, labor and
transportation cost when making
sourcing decision
• Exception management is critical
Sourcing Template: DTC Normal Priority
Tier 1: Distribution Centers
Eligible Location Groups:
• BBB Distribution Centers
Location Priority:
Manual
Sort by geographical proximity
Tier 2: Regional Fulfillment Stores
Eligible Location Groups:
• East Coast RF Stores
• Midwest RF Stores
• West Coast RF Stores
Location Priority:
Manual
Sort by geographical proximity
Tier 3: Standard Footprint Stores
Eligible Location Groups:
• 10,000 sq ft stores
• Large footprint standard stores
• Mall stores
Location Priority:
Manual
Sort by geographical proximity
50 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Case Study: Optimized Sourcing from Stores
Band 1: within 25 miles
Band 2: within 100 miles
Band 3: beyond 100 miles
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Global Kickoff 2011
Buy Online, Pick Up in Store
eCommerce
mobile
Store inventory point of sale
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Global Kickoff 2011
New In-Store Business Processes Required Buy In-Store, Pick up in Another Store
Retail
Consumer
Store
Store to Store Transfer
Retail
Consumer
Store Return to Vendor/DC
Retail
DC Vendor
Buy In-Store, Ship from Store, DC or Vendor
Consumer
Store
53 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Web-Based Parcel Execution
Solution Capabilities
• Centralized management of enterprise parcel
needs
• Zero rate table maintenance
• Full support for negotiated rates
• Automated tracking of parcel shipment events
• Automated capture of proof of delivery
signatures
Value Created
• Lower TCO for mass deployments
• Lightweight, centralized solution …easily
deployed to the extended supply chain
• Encapsulated user workflows within a single
user experience
Manhattan Solutions
• Supplier Enablement (drop ship)
• Hub Management (drop ship)
• Store Gateway (in-store order fulfillment)
Web Based Parcel Execution
Parcel Requests…
Carrier Replies…
SCOPE Parcel
Carrier
54 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Electronic Documents Captured
55 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
How Do I Get There From Here?
Network Inventory Visibility
Enterprise Order Management
BLENDED CHANNEL COMMERCE PLATFORM
CUSTOMER ENGAGEMENT
RETAIL OPERATIONS
eCommerce point of sale
social platforms mobile
Contact
center / store
inventory transaction
capture in store fulfillment order orchestration
1
2
5
3
4
1
6
The Men’s Wearhouse
56 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
How Do I Get There From Here?
Network Inventory Visibility
Enterprise Order Management
BLENDED CHANNEL COMMERCE PLATFORM
CUSTOMER ENGAGEMENT
RETAIL OPERATIONS
eCommerce point of sale
social platforms mobile
Contact
center / store
inventory transaction
capture in store fulfillment order orchestration
1
2 5
3
4
Dick’s Sporting Goods
57 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
How Do I Get There From Here?
Network Inventory Visibility
Enterprise Order Management
BLENDED CHANNEL COMMERCE PLATFORM
CUSTOMER ENGAGEMENT
RETAIL OPERATIONS
eCommerce point of sale
social platforms mobile
Contact
center / store
inventory transaction
capture in store fulfillment order orchestration
1
2 3
4
Bed, Bath Beyond
58 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
59 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Brian Kinsella manhattan product management bkinsella@manh.com
2300 Windy Ridge Parkway
10th floor
Atlanta, GA 30339
USA
Global Kickoff 2011
Transportation Lifecycle Management: Global Kickoff Meeting
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Global Kickoff 2011
Controlling our Destiny
Customer Satisfaction & Referencability
Fleet Planning and Execution
Successful Implementations
Leveraging the Platform
Market Leadership
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Global Kickoff 2011
Target Market
Retail
Wholesale MFG
Domestic
Food
Private Fleets
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Global Kickoff 2011
Private Fleet Summary
• This is a large market spread across a large
number of verticals and segments.
• Out of the top 100 only 5 are Manhattan
Associates TLM customers.
• The top 100 private carriers in the industry
make up roughly 12% of the total GDP in the
US in 2009.
• Total revenues of the top 100 were
approximately $1.783.38 trillion, which
includes $401 billion for Wal-mart (current
TLM customer).
• Out of the top 500, 275 are food processing,
manufacturing/processing or retail/wholesale.
• For the purpose of further analysis I have
taken Wal-mart out of the list to provide a
more objective analysis.
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Global Kickoff 2011
Leverage the Platform
Fleet Planning and Execution
Setting the Standard
One defends when his strength is inadequate, he attacks when it is abundant.
Sun Tzu
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Global Kickoff 2011
Next Generation Application
The WMS-TMS platform offers a comprehensive set of business workflows for both warehouse
and transportation users, with transparent separation of duties where warehouse users and
transportation planners interact with a single application
Pre-Platform Platform
66 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
In Summary:
Value Drivers In Private Fleet Operations
Step I Step II
Step III
Drive value from fleet outbound optimization
• Enhance outbound planning workflows using optimized routes from fleet consolidation and interactively evaluate/modify using next-gen MCW
Enhance accuracy and efficiency of dispatch operations
• Enhanced outbound execution using fast, easy to use dispatch workspace and Driver and Load
• Plan optimal round trips with inbound shipments and outbound shipments
Maximize asset utilization with inbound/outbound planning
• Advanced planning of inbound orders with projected outbound order profiles
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Global Kickoff 2011
Customer Success
Product Customer Highlights
TPE HEB • Implemented Capacity Finder
• Extended Inbound workflow to include DC-DC transfers, inclusive of cross-
docking
• Enabled Appointment Scheduling at 6 of 10 DC’s
• First U.S. based customer using the MA Dispatch System (Dispatch
Execution and Optimization) for a Private Fleet.
Hudson Bay • Live with Inbound and Outbound Planning
• Integration to WMOS 2009 with a flow-through workflow.
Home Depot • Live with Appointment Scheduling.
• On-boarded 500+ vendors.
C&S • Inbound solution deployed across network
• OB FSP at 1 site
Misc • DSG live with Archive and Purge
• Ventura Foods TP&E 2010 upgrade
• Kroger IB stabilized and transitioned to CSO
TP 2 Bids • Results from 2 bids were $3.45M savings on $121M spend
CM 33 Go-Lives • Enabled new Enroute Load Assignment (ERA) functionality
oHelped Panther Expedited improve operating margin 5% in only 3
months.
• Enabled new Fuel and Route Tolls functionality (exclusive to MA in the
CM industry) at multiple Carrier clients.
68 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Key 2010 Wins - TLM
Account
McKesson
Home Hardware
DECA
Gainey
Challenger
Panther Expedite
HP (TP)
Elektra
Guardian Industries
EPES
AAA Cooper
Baylor
Total
69 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
Marketing Levers: TLM
TLM
Lever 2
Differentiate with a
distinctive PoV
(Fleet/Inbound &
Outbound)
Lever 1
Be More Visible
Lever 3
Align with WMS
Q1 Q2 Q3 Q4
Lever 1 • TLM analyst tour
• NRF
• FMI/GMA
• RILA
• TCA 2011
• ARC TMS Outlook
• SCM Review (Trans
Role in SC)
• NRF SC Summit
• FMI
• DC Velocity
(TMS)
• TMS MQ
Publishes
• CSCMP
• ATA
• IFDA
• Industry Week
(Trans Trends)
• Logistics Mgmt
(Optimizing TMS)
Lever 2 • Private Fleet
thought leadership
program
• Chain Store Age
(Fleet
Management)
• Logistics
Management (TMS
trends)
• DC Velocity (TMS)
• Private Fleet
thought leadership
program
• MMH (Fleet
Management)
• Wholesale „ZDR‟
• Wholesale „ZDR‟
• Grocery „ZDR‟
• TMS Exchange
• 3 different fleet
articles
Lever 3 • Momentum • WMS/TMS Thought
Leadership
program
• WMS/TMS Thought
Leadership
program
70 Copyright 2011 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Global Kickoff 2011
2011 and Beyond……..
• Private Fleet Thought Leadership
• Execute on new upgrades and go-lives.
• Leverage TLM WM integration to clear platform differentiation.
• Ensure continued customer satisfaction and referencability.
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