Delivering the Basics Brilliantly · smoother profile. Window 3 and Window 4 suppliers will be able to book in an earlier window but not later. If you have a last minute Special Booking

Delivering the Basics Brilliantly 1 August 2018 v4.0

Delivering the Basics Brilliantly: Supplier Training Manual – Fresh UK and ROI August 2018


Contents Introduction ............................................................................................................................ 4

The Who and Why .................................................................................................................... 5

Toolkit and Training ................................................................................................................. 6

Training ................................................................................................................................ 6

Order Transmission ................................................................................................................. 7

Working with our Depots ......................................................................................................... 7

Transporeon ........................................................................................................................ 8

Goods In Central Team………………………………………………………………………………………………..8

Delivery Appointment Creation ............................................................................................ 9

Late Deliveries ..................................................................................................................... 9

Advance Shipping Notification (ASN) Compliance ................................................................. 9

Serial Shipping Container Codes (SSCC) .............................................................................. 11

Pallet Types & Heights ......................................................................................................... 11

Product Identifiers .............................................................................................................. 13

The Goods In Profile ............................................................................................................ 14

Depot Service Level .............................................................................................................. 165

Impacts to Depot Service Level ............................................. Error! Bookmark not defined.5

Service Reporting ............................................................................................................. 176

DotCom Service Calculation.............................................................................................. 196

Sales Based Availability ......................................................... Error! Bookmark not defined.7

Improving our SBA ................................................................ Error! Bookmark not defined.8

Star Lines .............................................................................. Error! Bookmark not defined.9

Working Plan to Maintain 100% Suppy Consistently ............................................................ 20

How to Work With Us .......................................................................................................... 2021

Daily ...................................................................................... 2Error! Bookmark not defined.

Daily/Weekly ...................................................................................................................... 23

Monday Morning ................................................................................................................. 24

Periodically ........................................................................................................................ 25

Quarterly ........................................................................................................................... 25

Promotions and Events ....................................................................................................... 256

Path to a Promotion ......................................................................................................... 256


Sales vs. Orders ............................................................................................................... 256

Collaborative forecasting and planning ............................................................................ 256

Review of Tesco Connect for shelf and feature space promotion ..................................... 267

Review of Day 1 and 5 promotional performances ............................................................ 267

Pre-Fill Unit Process or PFUs............................................................................................ 278

When it is gone it is gone or WIGIG ...................................................................................... 289

Range Change ....................................................................................................................... 30

Road to a Range Change .................................................................................................... 30

Delists ................................................................................................................................ 32

New Lines .......................................................................................................................... 33

Best Route to Shelf Edge ....................................................................................................... 33

End to End “Move Efficiency” ............................................................................................. 35

Opportunities for Move in Fresh ........................................................................................ 35

Considerations .................................................................................................................. 37

Route to Market Options and Benefits of Using Primary ..................................................... 37

Phonebook ............................................................................................................................ 38

Structure .............................................................................................................................. 39


Introduction Dear Supplier,

Welcome to the Delivering the Basics Brilliantly Manual. As a business we are always looking to improve our customer shopping experience. In order to do this it is important for us to work with you collaboratively to help improve the flow of stock from your business to our shelf edge and to work as ‘one business’.

As we work more collaboratively with our suppliers we are looking to build a Supply Chain that not only delivers great service to ensure availability of products for our customers but we are also looking to understand how we can reduce working capital and Supply Chain costs to ensure efficiencies for both our businesses. By working together to identify opportunities we believe that we can future proof our Supply Chains and build great partnerships to deliver world class service to our customers.

I would like to thank you for your help in driving Supply Chain improvements and efficiencies and I look forward to hearing about the great work in the coming months.

Kind regards,

Tony Mitchell


The Who and Why Tesco’s Core Purpose: “Serving Britain’s shoppers a little better everyday”

In the UK, we serve some 66 shoppers every second, so it's our goal to ensure every one of those customers experiences just a little better service on each visit.

How we’ll get there

How You Play Your Part

Optimal Supply Chains are successful through the best balance between cost and performance. The following document details how to work with us to deliver a better experience for the customer and how we measure performance in line with ‘The Big 6’.

The document is written in chronological order of process to clearly depict your input and how it flows through.

The key metrics to consider throughout:

Depot Service Level Sales Based Availability


Toolkit and Training The Toolkit, is an online portal which is a hub for all elements of working with Tesco.

You will need the Toolkit to access all systems in the future. Features include a document library, a personalised newsfeed and access to relevant systems, including Tesco Connect, Tescolink and Visual Insights.

The URL is: https://partnerstoolkit.tesco.com

How to register – please request access from [email protected]

Training

Within the Toolkit is a dedicated training site: www.tescosuppliertrainingessentials.com

You just need your 5 digit supplier number and all your colleagues can register.

The site contains e-learning, videos and guides covering a range of topics including essentials such as jargon busters, Tesco Connect and Visual Insights.

The following content in this document assume that all suppliers have access to Tesco Connect and Visual Insights.

Tesco Connect Visual Insights

https://partnerstoolkit.tesco.com/

mailto:[email protected]

http://www.tescosuppliertrainingessentials.com/


Order Transmission The below depicts the perfect order cycle, orders are sent to the supplier via EDI, it is the responsibility of the supplier to ensure that set-up data is correct in order for the process to flow through our systems smoothly.

Working with our Depots Haulier and Warehouse Operating Hours

Tesco fresh distribution centres operate 24/7 except Christmas and Easter bank holidays, you will be advised in your Christmas and Easter packs about distribution operating hours during these times. To ensure smooth order patterns, we ask all our suppliers to line up alongside our opening times and days and to review this regularly.


Transporeon

Transporeon is the system Tesco use for scheduling suppliers’ deliveries to our Tesco distribution centres. Transporeon themselves are also responsible for registering new users and maintaining the system.

To access Transporeon users’ need to register an account with Transporeon. To receive details of how to do this please write to [email protected].

Suppliers can register themselves or if their third party hauliers are going to be performing the task of booking deliveries they can instead register. Once registration is completed Transporeon will provide the link to the web-site along with log-in details and training material.

For ongoing training requirements or queries relating to technical issues such as access to the system, users should contact Transporeon directly:

Email: [email protected]

Telephone: 0203 608 9096

This team are available 09:00 to 17:00 Monday to Friday. Out of hours please contact the Primary Support Team on 0845-075-5555 option 4.

Goods In Central Team

Within Tesco, The GIC team manage the day to day operational running of the system, managing the goods-in space at each depot available for you to book into and monitoring that the system is behaving as it should. Users should contact this team with issues relating to booking times and to escalate any technical issues with the system to Transporeon.

Email: [email protected]

Phone: 0845-075-5555 option 4

This team are available 00:00 to 21:59 Monday to Saturday. Sunday 06:00-23:59

Delivery Appointment Creation

Appointments are available to book up to 14 days in advance. Bookings must be made 3 hours before each window starts.

20:00-06:59 – Window 1 bookings need to be done by 17:00

This is split on the system as:





Window 1A 20:00- 23:59 Window 1B 00:00 – 06:59

07:00-11:59- Window 2 bookings need to be done by 04:00

12:00-17:59-Window 3 bookings need to be done by 09:00

18:00- 19:59 Window 4 bookings need to be done by 15:00

All supplier numbers have been set up in the correct window to ensure bookings are made into the correct window. If you believe you are in the incorrect window GIC will amend once verified. You will not have fixed bookings like you did with OTM. This is to make sure the depots have a smoother profile. Window 3 and Window 4 suppliers will be able to book in an earlier window but not later.

If you have a last minute Special Booking outside your window then this can be done by ringing GIC and giving them the details and your registered carrier name. This will then appear on your system once booked. No load should arrive without a reference or ASN. The person who booked the load will be sent an alert if they haven’t filled in an ASN an hour before their booking time.

Late Deliveries

If a delivery is going to arrive late for an appointment but still arrive on its due day, the booking needs to be updated in Transporeon with an estimated time of arrival and also with a reason code for the delivery arriving late. This information will be visible to the goods-in teams at the depots and enable them to manage goods-in resource around your vehicle not arriving on time.

Please note that adding notification that a vehicle is running late it is not guarantee for a quick turnaround when your vehicle does arrive. However if this information is not added to the system your vehicle is at risk of being held for longer before being off-loaded.

Advance Shipping Notification (ASN) Compliance

To improve the supply chain efficiency between you and Tesco, it is a requirement that all vehicles delivering into Tesco fresh food distribution centres have an ASN.

An ASN is a document that provides detailed information about a pending delivery. The purpose of an ASN is to notify the customer when shipping occurs and provide physical characteristics about the shipment so the customer can be prepared to accept delivery.

An ASN can be transmitted via Electronic Data Interchange (EDI) or through the Total Information Management System (TIMS) it provides information about when an order will be shipped, which items are being shipped, how many of each item are shipped and physical characteristics about the shipment such as the shipment’s weight, the number of cases and a description of how the shipment units are packaged eg. boxes or trays.


One ASN per vehicle per Tesco distribution centre, if a vehicle arrives without an accurate ASN, the delivery will not be accepted until a fully compliant ASN is received by Tesco.

Any ASN queries should be directed to [email protected]

Serial Shipping Container Codes

The Serial Shipping Container Code (SSCC) should contain the products and quantities on the physical pallet/dolly/MU. The SSCC is scanned as it is unloaded from the vehicle, the information contained on the SSCC is then used to identify the products and quantities the supplier has advised. The SSCC information is used for goods in checking of the products, and as traceability when the pallet arrives at the distribution centre. Checklist

Check print quality regularly verifying symbol quality Check the barcode will remain readable in the environment

in which the product will be stored, handled and distributed Ensure the SSCC label is securely fixed to the

pallet/dolly/MU Ensure that no shrink-wrap, tape or banding can obscure

the SSCC label Ensure there are two identical SSCC labels on every pallet,

(adjacent sides). These must be displayed on the right hand side – ideally the top right

One of the labels must be facing the back door of the trailer to ensure the loader/unloader can scan it



Pallet Types and Heights Accepted at Tesco

Pallets should conform to the British Standard 2629, i.e 1000mm x 1200mm, four way entry, non-reversible, full perimeter base.

Standard Pallets (1200mm x 1000mm)

Tesco has three approved wooden pallet suppliers:

The pallets must be of strong construction, without broken or damaged slats.

Please note that non-standard pallets will be rejected.

For more information on pallet standards please refer to the Fresh Supplier Delivery Manual in the appendices folder.

Points to Consider

Vehicles should be loaded to match tipping order Every pallet should have 2 identical copies of the same SSCC At least one SSCC should face the trailer door All SSCC numbers should be advised on the ASN. The distribution centre will refuse to

unload pallets not advised on the ASN, or any pallet where the SSCC cannot be scanned

All pallets must securely and adequately wrapped


Product Identifiers

This is a requirement for all Tesco own label products and is a strongly recommended initiative for all branded suppliers. These have been designed to help improve the picking and receipting of stock accurately for both suppliers and retailers by improving ease of product identification.

Why this Matters

Different products delivered in similar boxes or in stacks of trays are difficult to distinguish

Due to abbreviations and similar product descriptions it is difficult to separate product lines correctly based on the OCC label

A big, bold number or letter that draws the eye will help support accurate breakdown of mixed product pallets

Right Product - Right Tray

Excessive space in trays has a huge cost to the supply chain, if you believe one of your products is in the incorrect tray type or could be sent in a box please contact your Tesco buyer who will liaise with you and Tesco supply chain teams to improve efficiencies.


The Goods In Profile

The goods in profile ensures that depots receive a consistent flow of product throughout the day – please refer to the below illustration to see what window your delivery falls into.

It is essential that stock is not delivered beyond its delivery window time. The last booking for window 4 is 19.30. If a delivery is running late then the absolute

latest it can arrive and still be tipped is 20.00.

Any stock delivered past the 20.00 deadline will not reach the store in time and will affect availability, loss of sales and impact waste. Poor delivery window compliance of stock will be monitored and can result in supplier intensive care process being initiated.

Manage pressure points such as promotions, seasonality and range changes well, ensuring open and transparent communication with your Supply Planning Manager.


Depot Service Level Depot Service Level refers to the arrival of goods into our distribution centres. Depot Service Level Calculation

The depot service level target for everyone is 98.5%.

Measured in cases, ‘Depot Service Level’ is calculated as:

𝑉𝑜𝑙𝑢𝑚𝑒 𝑑𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑

𝑉𝑜𝑙𝑢𝑚𝑒 𝑜𝑟𝑑𝑒𝑟𝑒𝑑

Volume delivered:

Less any balances shorted Less ALL case volume on a late delivery (post 20:00 hours Wave 1 or post 07.00

hours Wave 2)

Impacts to Depot Service Level

Shorted Volume:

When part of an order is not delivered, the missing part is classed as shorted volume, this can also include captured rejections due to quality etc.

As a supplier you will have visibility of your service level in Visual Insights. The tool runs at 08:00am and looks back at the previous depot day. If your order has not been receipted in by this time it will appear as a shortage. When the data is run the next day (to catch rogue deliveries after 08:00) you will see that the order will show as a late delivery rather than a shortage.

Volume Delivered Outside Of Required Booking Window:

When a line is delivered outside of its wave, the system still record this as a late arrival.

Failure To Arrive (FTA):

98.5%<98.5


If a full truck’s delivery does not reach the distribution centre before 20:00 on the day it is due, it is classed as a failure to arrive or FTA for Wave 1. If a full truck‘s delivery does not reach the distribution centre before 07.00 on the day it is due, it is a FTA for Wave 2.

The full volume in cases of such a load will go down as a shortage against depot service level.

Service Reporting

Visual Insights allows us a clear and consistent way to align service levels. This is updated daily to give us the previous depot day’s data, additionally it gives you a historic view of the past 2 year’s information including weekly, periodically and quarterly.

This enables the top level numbers and the drivers of any service level impacts to be viewed by you and your Supply Planning Manager, or a wider audience if agreed.

Steps You Can Take to Improve Your Depot Service Level

• Use Visual Insights to understand and build a plan for trends and risk areas. It contains two years of data and, as the old adage goes, history repeats itself.

• Own your relationship with your haulier – they are providing you a service and should be updating you on issues, bookings and performance. This also includes suppliers who use the Tesco Primary service.

• Use Tesco Connect daily to monitor order forecasts. You are measured on orders, not on sales through the till.

Dotcom Service Calculation The dotcom service leveI calculates how many of our customers were not able to purchase a product they wanted, through our online shop up until 11am each day.

The calculation used for the dotcom service level is:

1 − 𝑑𝑜𝑡𝑐𝑜𝑚 𝑓𝑎𝑖𝑙𝑒𝑑 𝑝𝑖𝑐𝑘𝑠

𝑑𝑜𝑡𝑐𝑜𝑚 𝑜𝑟𝑑𝑒𝑟𝑠

When the Dotcom website thinks a product is unavailable, it will perform two validations to see;

whether there is a lasting supply issue at the warehouse whether there is enough stock in store to cover the potential shortfall

Goods are automatically listed as “unavailable” on the website, when the store does not have the volume to satisfy sales, until the next delivery. To help achieve consistently high Dotcom service levels, please ensure your depot service level is maintained.


Sales Based Availability Sales Based Availability or SBA is an availability measure using sales at the till. It compares actual sales at the tills versus expected sales, based on established trade patterns, by store by line. It is a crucial measure to assess the service we give to our customers.

SBA is a measure that best assesses what the customers’ perception of our availability is. The measure is available for any products selling more than 5 singles per store per day.

Below show examples of SBA issues – products not on shelf at key trading points throughout the day.

How does it work? A selling pattern is established, for each of our products, in each store.

From 9pm backwards, the sales based availability system calculates how many sales were made of a particular product, how much should have been sold on the particular trading day and at what time the last product was sold.

The system evaluates the “missed sales vs expected sales”.

The logic behind the process is then to say that we should have sold this product in the last 5 minutes, as we didn’t, it may be off sale.


When the tills do not record any sales for a consistent period of time, the system knows that it was expecting to see some sales. It will automatically complete 2 validations to understand what is wrong.

If there is an external problem, which may explain why the product is selling less than during normal trade; it will give it a special allowance and keep checking along the day to best estimate the availability to the eyes of the customers. Otherwise it will register the product as “not available” since the last registered sale.

Improving our SBA Now that we understand how SBA works, it is critical to make sure we build a plan to ensure we have the best availability possible to keep our customers happy. We want shelves to be full as shown below:

Our SBA Targets Are as Follows:

Currently, 1 in 11 of our most important products is off sale in the evening. If we don’t do anything about this, we will miss opportunities in terms of sales and customer satisfaction.

What Actions Can You Take to Improve SBA on Your Products? Having a product available on the shelf, for our customers to buy, starts with you. There are key elements on which you can rely to ensure our SBA is at its best:

Improve forecasts by fully understanding the information provided by Tesco and working collaboratively to establish a best forecast using the tools available to you, such as Visual Insights.

Ensure there is good communication with your key Tesco contacts to ensure quick reaction when a line shows poor availability.

A good understanding of the “Star Products” and to give them the right level of focus. This will be further detailed in the next section of the manual.

>96.5%95%94%<94%


Understanding sales trends of products and working with Tesco to help proactively plan for these through increasing safety stock and forecasting.

Utilising field teams to target worst performing stores/products and suggesting improvements to your Tesco contacts.

Star Lines Star Lines are items customers expect good availability on; they are the most important products to them.

Tesco analysed approximately 430 products for each store, so that all stakeholders can give those lines the extra focus needed, in order to keep customers happy.

Logic behind the “Star Lines” Dunnhumby data helped group products into shopping trip missions; a trip where the customer wants to buy something specific. An example of a shopping mission may be “buying branded tomato ketchup”.

The analysis of sales indicated which branded ketchup size and brand was the most popular seller. The selected product becomes one of the top 430 products.

The missions’ data was also analysed at store level to take into consideration regional preferences. Each store knows which products they need to pay particular attention to.

Each Star Line is highlighted in store with a red star on the shelf like this, as well as in your periodic performance packs.


Working plan to maintain 100% supply consistently A working plan should be put into place highlighting what products the supplier has and how they can maintain 100% availability on these products.

Examples of this Include:

Highlighting the lines to your business by flagging them as “hero lines” Holding more raw materials for the manufacture of these lines Holding more finished goods Having a contingency plan for these lines, especially throughout promotional periods

Restricted supply on Star Lines If you face a supply issue on any of the Star Lines, please contact your Supply Planning Manager as early as possible, so each team involved can take the necessary actions to minimise customers’ disappointment.

Steps you can take to improve your on shelf availability

Having a product available on the shelf, for our customers to buy, starts with you. There are key elements on which you can rely to ensure our SBA is at its best:

Improve forecasts by fully understanding the information provided by Tesco and working collaboratively to establish a best forecast using the tools available to you, such as Visual Insights

Ensure there is good communication with your key Tesco contacts to ensure quick reaction when a line shows poor availability

A good understanding of the “Star Lines”, and to give them the right level of focus Understanding sales trends of products and working with Tesco to help proactively plan

for these through increasing safety stock and forecasting Utilising field teams to target worst performing stores/products and suggesting

improvements to your Tesco contacts.


How to Work With Us Daily

Tesco Order Amendment Process

Proactivity in our ordering is key to ensuring we protect on shelf availability. Tesco Connect provides a vital resource in helping you manage this.

If a product is going to be amended this MUST be communicated in advance/on the day of the order to your Supply Planning Manager, with a reason and resolution date. Once approved this must be keyed in the Tesco Inbound Management System (TIMS). Below is an example of the document to be used when reporting amendments to the original order. It will reduce the need for email traffic by helping you determine the correct reason code to key into TIMS. (Full version attached as an appendix)

The document is split into three tabs:

TIMS Decision Tree

The decision tree will help you to determine whether a line can be keyed as Tesco Approved/Supplier shortage/Overproduction or whether you need to contact your Supply Planning Manager to decide. It is prudent to take into consideration any recent under/over supply and build this into your planning moving forwards as this will have an impact on the Connect forecast.


TIMS Reasons Once you have determined the reason, the second tab will give you the primary and secondary reason to be keyed in TIMS.

TIMS Amends Finally you will need to log the amendment using the below format, ensuring all fields are completed. Please ensure this tab records all of your amends for the Tesco year as this will help monitor all your changes vs the original order. (Please do not send a fresh form for each amendment as you will not be able to track your amendments efficiently).

We will process all reports and action our system provided communication is received by 12 midday Monday to Friday and 11am Saturday & Sunday.

To help work through any long term issues, you must liaise with your supply planning manager to create a contingency plan.


Transporeon Please ensure you or your haulier are booking deliveries and updating the system of any late deliveries to ensure the depots can manage their resource efficiently.

Tesco Connect Tesco Connect is an online portal reflecting the ordering system. It shows order forecasts at both a SKU and depot level. The predicted store demand can be seen 3 weeks in advance, with the first 7 days also accounting for depot ordering such as committed stocks and rounding.

Daily monitoring of Connect is essential for suppliers to have full visibility of system and forecast changes and therefore communicate issues where necessary.

Daily/Weekly Visual Insights Visual Insights is an online tool that brings together a collection of Tesco data including service metrics and sales.

Suppliers have access to their own products through the Tesco connect supported interface. This is the same data that is used in the supplier performance packs and will support in root causing and trend analysis. The tool data fields and charts can be amended and saved, and also exported to excel and pdf. It is important to check this on a daily basis to review your daily service level and investigate any anomalies vs what you reported to your Supply Planning Manager the previous day. Please be aware, as described above lates may appear as a shortage up to 24 hours later.

Extensive training on Connect & Visual Insights is available on the Training Essentials site www.tescosuppliertrainingessentials.com.

http://www.tescosuppliertrainingessentials.com/


Monday morning service report

It is important for suppliers to know their service level for the previous week. By having an understanding of the impacts to depot service level a supplier can strategically work with their Supply Planning Manager to put strong plans in place to maintain/recover, calling out any known risks in the upcoming week and managing them accordingly.

Visual Insights and the below template is to be utilised for reporting on Depot Service Level on a weekly basis before 09:30am. (Full version attached as an appendix):

The report itself covers off the following information: a top line summary of the week’s KPIs, a graphical representation of your ISL% YoY (fed by the table within 2nd tab on the spreadsheet), a summary of your top 5 shorted products, a summary of late deliveries, and finally a list of any future supply risks if applicable.

Please see screenshot below for the path to get the template on Visual Insights to help you obtain the previous weeks data.

This template should be sent directly to your Supply Planning Manager at Tesco, who will be able to support you on how to fill this out if required.


Periodically

Supplier Performance Review

Supplier performance packs which are produced at the end of each Tesco period and provide a generic document to review service level between Tesco and suppliers.

They are available on Tesco connect within the documents section, 2 or 3 working days after the period ends. They allow a review to take place on various service metrics, comparing year on year, year to date measures and key drivers for the period. Visual insights provides the means to support any agreed next steps on analysing any area in more detail.

Please contact your Supply Planning Manager to book periodic performance meetings.

Quarterly

Proactive Quarterly Review

The Category Supply Chain Manager will meet with all Partnership Suppliers to have a quarterly review focusing on the upcoming quarter from last year to understand any key issues and collaboratively working together to improve YOY.

When Appropriate

Process to cover holiday, sickness and communication changes

You should have a process in place to cover for anyone being sick or on holiday. It is also very important to communicate these changes to your Supply Planning Manager so they know who to address.

Bank holidays and seasonal periods

It is critical that the correct information regarding ordering and delivery closures over bank holiday and seasonal periods is communicated to your Supply Planning Manager. This is valid for UK, ROI and Scottish holidays.

Factory Maintenance/Closures

Planned maintenance on production lines and factory closures MUST communicated in advance to your Supply Planning Manager so you can proactively work together to ensure optimum availability on impacted lines.

Please do not plan maintenance and closures around key periods such as any seasonal events/Range Changes or promotions. If urgent remedial maintenance needs to take place


please contact your Supply Planning Manager as soon as possible to mitigate any risk to supply.

Promotions and Events Path to a Promotion

There are three key principles that Tesco follow in the promotions process:

We plan our promotions as far in advance as possible, to minimise the need for amendments, to ensure our suppliers can deliver what we ask for and our distribution network can get the volumes to stores on time

We centralise and automate as many processes as possible, leaving people to manage the exceptions and stores to do the things that only stores can do

We use historical data to accurately forecast promotional sales at store-product level, ensuring every store gets the right level of stock

Sales vs. Orders

One of the biggest volume disparity queries stems from the distinction between orders and till sales.

The agreed volume with your Supply Planning Manager is till sales for the first week of the promotional period. The order volume and order timings required to satisfy shelf demand is amalgamated from the below factors:

Shelf fill: Every sku will have a set case volume to keep all additional space full regardless of sales rate e.g. a sku on Grocery End 2 in Main Estate (888 stores) with a shelf cap of 4 cases will need 3552 cases for launch regardless of projected sales rate unless discussed prior to launch.

The ordering system is pro-active rather than reactive – it orders in anticipation rather than as a result of sales. Depending when the push to store for the lines is can affect the order date.

Collaborative forecasting and planning

Feature space promotions should be forecasted collaboratively with Tesco’s Supply Planning Managers, where each output can then be compared, so that a best forecast can be agreed together, by both parties.

This process is critical as the information about promotions only appear at week -1 in the system and therefore Connect, when it would be too late to supply such volumes.


Review of Tesco Connect for shelf and feature space promotion

When Tesco forecasts a promotion, it will be visible on Tesco Connect. An “upcoming promotion” tab will highlight what offers and dates are coming up.

This is also a good way to flag up if any promotion does not seem loaded properly in terms of:

A promotion was expected but is not showing yet. A promotion was not expected and is showing on the system. The forecast looks over by 20%.

Any of these issues should be communicated as early as possible to your Supply Planning Manager so corrective measures can be put in place.

Review of Day 1 and 5 promotional performances (Monitoring Rate of Sale)

A report analysing how a promotion is performing versus forecast is ran on the 1st and 5th day of the promotion.

It is critical to be able to assess the data on this report, in order to take appropriate actions, if there is a promotional over or under-performance.

On Day 1:

It is important to monitor any over or under-performance. The first day’s sales can be compared to the forecasted ones. Any difference should be analysed by both Tesco and yourselves. If a big difference is showing, it is important to check if the promotion was launched properly or if the initial demand simply was not there.

Please contact your Supply Planning Manager for further information on this point.

On Day 5

This is when the teams are confident that accurate sales figures and trends can be used.

If an over-performance appears, you should contact your Supply Planning Manager to advise if there is any issue with supplying the demand. In case of under-performance, the rate of supply can also be readjusted. Please contact your Supply Planning Manager for further information.

Once this has been established an action plan can be put in place to ensure the promotion is re aligned to run smoothly.


Pre-Fill Unit Process or PFUs

The pre-fill unit process is used for any product which is not displayed on shelf. Attached is a definitive PFU Guide with highlights below.

PFUs are widely used in Tesco as a way of reducing costs in store, improving the customer experience of promotions and maximising sales.

Quarter Pallets and Merchandised Units are delivered through our trunking stations. Please work with your Supply Planning Manager to ensure stock is ordered into the relevant depot on time, to hit the deadlines for the pushes to store. This will prevent any launch disruptions.

Off Fixture Display

(OFD) Under 23Kgs

Store: Express and Main

Estate

Ambient

Quarter Pallet (QP) Over 23Kgs - BOUND

PAIRS ONLY

Store: Main Estate

Network: Trunking

1-2 days to get to store

Merchandised Unit

(MU) Over 23Kgs

Store: Main Estate

Network: Trunking


GKN Pallet (Full Pallet) Over 23Kg

Store: Main Estate

Network: Ambient



Here is How the Process Works:

When it is gone it is gone or WIGIG

WIGIG promotions happen for a specific purpose or event for items not in range and on the standard fixture.

The idea is to satisfy a defined/forecasted promotional volume. When this promotion ends, all stores stock should sell out, hence why ‘when it is gone it is gone’.

Tesco promotional managers will collaboratively plan with you the dates and forecast. It is important for our suppliers to understand the ‘first delivery’ and ‘last order date’ they should supply, and to be aware the orders are feature space fill and then sales and run-down driven until the last order date or sooner if all volume is exhausted.

Steps You Can Take to Improve Your Promotions

Ensure your internal supply chain and commercial teams are aligned so there is clear message to Tesco. Collaboration between Buyers and Supply Planning Managers allows for the smoothest promotions. If beneficial, have cross functional forecasting meetings to avoid messages being carried down a chain.

Buyer proposes Pre-Filled Unit for the

space

Week-18 to -13

Tesco Customer Business Manager

builds Pre-Filled Unit into the marketing

plans

Week -13

Store list and depot split issued by Tesco

Supply Chain

Week-6

Commercial admin sets up TPNB using

new line form. Week-5-4

Tesco Supply Chain order Pre-Filled Unit into depot and send

to store

Week-2/1

Please note this is not sequential – elements of the process will flow alongside each other and timescales could change within different departments.


Push back if you cannot support a promotion – empty ends are a huge frustration to customers and benefits nobody

Communicate any issues/amendments as soon as possible to your promotions manager Check you fully understand the different PFUs and ways they need to be delivered

before proceeding with any Particularly at peak times, stores need to receive their PFUs on the set day laid out by

the ordering pattern. Any delays can seriously impede store process and potentially risk the PFU not getting the correct space.


Range Change Road to a range change

Range Changes are an emotive subject with frustrations on both sides of the process. Detailed below is the path from concept to store with emphasis on common pitfalls that can be avoided with the appropriate due diligence.

Week Tesco Supplier Key Hints

-20 Buyer agrees products with supplier with an indication of launch date and store distribution.

Supplier presents products to Tesco Buyer. Supplier confirms new listing details to internal stakeholders.

-19 Buyer agrees proposed range with Space Range Display team (SRD)

-16 Buying admin check key information e.g. Sub Group, description.

Supplier completes the New Line form online via myProduct: Induct

Guarantee all information in NLFs is correct. Errors in areas such as “weight” can cause issues later on in the ordering process.

-14 Buyer confirms key detail with Buying admin e.g. cost price and retail selling price.

-13 Buying admin perform final checks and load new line into New Buying System (NBS)

Supplier to be informed what codes have been assigned to new products.

TPNB, EAN, TPND & OCC codes confirmed and made available in myProduct: Induct. Double-check details are correct.

-12

Buyer confirms range to SRD and confirms commitments with suppliers on discontinued lines to range change team. Range change team highlights excess stock risks to commercial and clearance plans are made

Supplier communicates excess delisted stock to Range Change Team (particularly Own Label volume where there are contractual obligations).

The earlier the communication of outstanding stock, the smoother the run-through process, reducing the risk of price cuts being necessary

-11

Data Operations carry out GS1 checks and verify EAN’s and OCC barcodes.

Supply Chain Attributes Actioned.

Supplier delivers physical samples of product (BOP, EAN and OCC barcodes), conforming to GS1 guidelines, to internal stakeholders.

-10 Supply Chain confirm delists with Supplier Supplier confirms all lines are agreed delists and highlights any stock which the Buyer


has agreed to order if not already communicated.

-9

Buying admin give final approval on new lines on NBS.

Shelf fills and base forecasts locked at store level.

All lines must be confirmed by Buying Admin and SRD

-6

Buyer approves range in commercial ranging support tool (CRST).

Lines become visible to Store Ordering team in Continuous Replenishment (CR) system.

All lines must be locked in CRST

-5 Supply Chain email Supplier with full details of all new, extended and reduced lines in the range change.

Supplier to check and validate all details of the communication sent by Supply Chain.

Example email included below. Check and confirm ALL details, including the OCC and TPNDs match, case sizes and pallet configurations.

-5 Supply chain place final orders for discontinued lines as final store pushes in week -4.

Supplier to flag any discontinued stock that was agreed to be ordered.

-3 Supply Chain to set up new lines in LM

-2

Store ordering send across OPS report with week 1 forecasts and range details (store increases/reductions). Supply Chain will send OPS report to the Supplier and check orders are raising correctly.

Supplier to flag any concerns on the OPS report and monitor Tesco Connect for upcoming orders and ensure they are aligned to Week -5 communications.

All lines must be in depot by Friday of week -2

0 - Launch

Store staff to merchandise new lines onto shelves by Thursday. Buyer and Range Change to visit store and review.

Supplier to visit store and feedback execution from Thursday onwards.

Post range

change

Supplier monitors sales and feeds back any irregularities seen.


Delists The first stage of a successful range change is ensuring the timely rundown of delisted stock. The internal Discontinued Tool reviews depot/store stock and average weekly sales as well as forecast to predict how long stock will last in stores. This is used to find the optimum date for switching lines off from ordering. It accounts for committed buys so these need to be communicated as soon as possible for an accurate switch off date.

Below is an example of selected columns that the tool pulls back:

TPND Supplier

Name Description

Date of Range

Change

Estimated Completion

Date Store Stock

Depot Stock

Ordered Stock

Remaining Buyer

Committed Stock

Total Stock

Volume

Sales Rate

(Week)

1234567 Joe

Bloggs Tesco

Biscuits 20/11/2017 20/11/2017 500 0 0 0 500 500

Extensions/Shelf Capacity Changes

If a line is gaining range points and/or space in store, there can be a substantial order for a current line. Once the new forecasts have been sense checked and signed off by operations they are loaded onto Tesco Connect.

You will receive a notification that a new range change information download is available. This is accessible through the data tab. The report looks as follow:

New Lines The process used to calculate the volume required to launch lines is as follow:

Dunnhumby product “Needs state” data is used to group similar products at a granular level.

The ranging system looks at the historical range to analyse the sales distribution compared to the space each product was previously allocated. Each product is then given a set amount of space that they would need for their expected sales.

The total shelf cap


A New Line tool creates a base forecast. The tool details weekly forecast as well as shelf fill to generate a total volume required.

A simplified version of the tool is below:

The output is used to communicate new line order volumes. Please note this will not account for any promotional activity, streaming impacts or order rounding.

Best Route to Shelf Edge End to End “Move Efficiency”

What is Move? Move is how a unit of product is handled and transported between source, product line

and Tesco DC It’s about thinking end to end, something Supply Chain are continually exploring,

changing and influencing It is understanding upstream costs, for which there is a historical lack of understanding

and data Move is having visibility and understanding of the supplier’s full Supply Chain Move is being informed of options in logistics and understanding potential changes and

opportunities It is a reflection of a supplier’s overall efficiency to deliver into Tesco DC’s in order to

reduce costs through excessive logistics and warehousing costs

Opportunities for move in Fresh

Efficient Ordering

Pallet Rounding Reduction in handling of products ; product does not need to be case picked to build a

pallet prior to dispatch Transport efficiency through better vehicle fill Improved inbound process in Tesco depots for e.g. counting stock, sending the product

straight out to the pick

Truck Utilisation Full truck movements across the Supply Chain network Fill of actual loads into Tesco DC’s in order to take trucks of the Supply Chain network


Reduced Order Days Moving away from 7 days ordering for better truck and pallet utilisation Reducing the number of small loads & trucks across the Supply Chain network Reduced picking times across the supplier and Tesco network

Lead Time Review Moving to extended lead times to allow suppliers visibility on order accuracy in advance

of production taking into account product code life and store format Allow suppliers to produce / pack to order vs produce/ pack to forecast in order to

minimise the potential waste and pick accuracy as well as improved code life

Transport Efficiencies

Consolidation Sites Hauliers collecting , cross- docking and delivering into Tesco DC’s to minimize the

number of vehicles on the road Fewer and fuller vehicles on the roads reducing the carbon footprint Enables smaller suppliers to have a route through the Tesco Primary Network

Direct Deliveries Collect from suppliers and deliver straight into our Tesco DC’s to minimise the time and

cost of handling and transport Enabling the transportation of fresher product and increase code life into our Tesco

stores Minimising the touch points through the Fresh Supply Chain

Network Optimisation Reducing the number of vehicles and consolidation sites through the Tesco network Reducing the number of dual supply into our Tesco Network

Double Decker’s & Super Cube Reducing the number of vehicles on the road by utilising the double decker space that

allows us to transport up to 44 pallets ( from 26 on a single deck ) Reducing the number of carbon footprint

Network Optimisation Where does your Supply Chain add cost that can be removed Reduce the number of touch points in your supply chain Where is the product made and how can we benefit from volume consolidation Cheaper more optimal consolidation More optimal pallets – taking trucks off the supply chain network Alternative forms of transport – direct deliveries to stores


Ways of Working

Identify and present any opportunities on “Move “ to your Supply Chain Manager and Commercial contact

Schedule supplier visits where there are opportunities to be evaluated with your Supply Chain Manager and Commercial Contact

If unsure about the opportunities, liaise with your relevant Tesco contacts to get the level of detail you enquire

Considerations Order and Delivery Days To ensure smooth order patterns for our suppliers and into our network, we ask you to line up your deliveries alongside our opening times and days. It is important that every supplier’s haulier can facilitate 24 hour deliveries. At Tesco we raise orders every day of the week and on all the main bank holidays with the exception of Christmas Day.

Consolidation (Transport Efficiency) In this respect consolidators offer an ideal solution for suppliers with insufficient volume to make up full trucks by charging delivery by the pallet. This could be of benefit to a very small (or new) supplier delivering into our national hub, or for suppliers who find themselves in the middle ground where we require stock into our regional depots, but volume is spread too thin to justify stand-alone full trucks.

For more information on using on consolidation warehouses please contact [email protected].

Route to Market Options and Benefits of Using Primary What is Tesco Primary Distribution? Primary work collaboratively with commercial teams and suppliers to understand end to end supply chain and create innovative transport and storage solutions including consolidation (product and freight), short sea movements, rail and high cube transport solutions. All operations seek to utilise the most appropriate transport mode to reduce number of vehicle movements and road miles therefore reducing our carbon emissions.



The Three Main Benefits of Primary Are:

Supporting Tesco by getting the right product to the customer at the right time cost effectively.

Adding value to suppliers by providing simpler, reliable and competitive operations. Bringing scale and consistency to service providers.

Thank you.Phonebook

Transport and Logistics

Inbound Scheduling Email: [email protected] Primary Logistics Email: [email protected] Telephone: 0845-075-5555 option 4 Closed from 22:00 Saturday to 06:00 Sunday Inbound Standards Email: [email protected] ASN queries Email: [email protected] Transporeon Email: [email protected] Telephone: 0203 608 9096 Ordering

Availability Management Queries Email: Your supply planning manager

Depot Service Level Queries Email: Your supply planning manager Range Change Queries Email: supply planning manager Feature Promotions Queries Email: Your supply planning manager CPM Enquiries Email: [email protected]

Systems

Supplier Toolkit Email: [email protected] Supplier Training Email: [email protected]










Documents

Delivering the Basics Brilliantly · smoother profile. Window 3 and Window 4 suppliers will be able to book in an earlier window but not later. If you have a last minute Special Booking