John Lewis

Dino Rocos, Operations Director

“A Time of Change”

The Customer Proposition continues to Evolve

“Personal”

“Mass”

“Mass Personalisation”

Customer Expectation also continues to Evolve

Shopping Enthusiasts

Assortment width

Availability

Service Seekers

Added value services

Fulfilment integration

Solution Demanders

Rapid fulfilment

Convenience

Customers want to transact in different ways

29% of customers research in shop and buy online

63% research online and buy in a shop

19% of shoppers use mobile to research before they purchase

Retail is having to respond

Supply Chains are also having to respond

Omni-Channel Speed Agility

Breadth of Offer Customer Focus Critical Dependency

Making Supply Chains more Complex

Magna Park I-Force Clipper Blakelands Northampton

Click & Collect Home

Delivery

Direct to Customer

1Man

Supplier

2.5 m Orders 3m Orders 3.5 m Orders 8.5 m Orders 1.5 m Orders

2.6m Orders 3.2m Orders

0.3 m Parcels

2 Man

International

Services

9.5 m Parcel

dels 4.3 m 2 Man

dels

1.4 m Orders

1.2 m Orders

And more Expensive

Supply Chain Costs as a % of Sales

11%

12%

13%

14%

15%

2011 2020

Service eg: online

Retailers are reviewing their Supply Chains

What are the questions we are trying to answer?

Customer Challenges

Financial Challenges

Supply Chain Challenges

Change Challenges

Customer Challenges

Mass to Mass

personalisation

From Information to

Insight

Zero Tolerance

Do you have clarity

of proposition?

Do you know your

Customers?

Is service promise

delivered?

Financial Challenges

Channel reporting an

irrelevance?

Understanding the

Cost to Serve

End to End KPIs and

Budgets

Is financial reporting

aligned with business

model?

Are you managing

your cost drivers ?

Are performance

measures adapted to

for omnichannel ?

Supply Chain Challenges

Speed

Synchronisation and

Agility

Information

Do you know what

slows you down? Are you organised

to work end to end?

Systems and data

adapted to (future)

needs?

Change Challenges

How much?

A Long Journey

Different Skills

Is your strategy clear,

owned and

affordable?

Do you have a plan

to get there? Have you got what

it takes?

Programme Q’s Key Themes

The right amount of stock in the

right place at the right time

An agile supply chain that

exploits scale to drive efficiency

Empowered Partners driving

operational excellence

Fulfilment beyond customers’

expectations

This is about how we order stock,

ship it from the suppliers and

move it within John Lewis

This is about how we store stock

and about the organisation of the

distribution network

This is principally about Partner

development, but also covers the

implications of the other strategic

themes on Partners

This is principally about deliveries

to Customers but also covers the

implications of the other strategic

themes on Customers

Better Systems Tracking Stock Holding

will give us a joined up view

of our stock information

including RFID, will tell us

where stock is holding stock in fewer places

makes it easier to track

Better stock accuracy will also help us to reduce stock loss and provide a better customer service!

The right amount of stock in the

right place at the right time

Distribution Centres Customer Delivery Hub

Fewer,

Larger

NDCs

Built for

Efficiency

Pooled

Branch &

Online

Stock

Specialism

in

Handling

type

Regional

optimisatio

n

Removal

of ancillary

activities

Agile

network Reduction

in scale

NDC CDH

An agile supply chain that

exploits scale to drive efficiency

Unless…

Our experience, tells us that a Partner workforce is best

or

or

We are also aiming to ‘keep it in the

Partnership’ by collaborating with Waitrose

A third Party has an

unbeatable advantage from

e.g. scale

We can’t afford to build a

new facility with our own

money

The Partnership model

doesn’t deliver the

advantage that it should

So our preference is to

insource our supply chain

operations and reduce our use

of agency staff

Empowered Partners driving

operational excellence

Fulfilment through customer delivery is all about service and efficiency

Efficiency critical to service delivery

1 man delivery remains outsourced for now, but

we will keep the business case under review

Technology improving utilisation of the fleet

New technology provides customer visibility

and control

Improved JL Fleet 2 man delivery platform for

new services Supplier direct

Fulfilment beyond customer

expectations

Investment

Systems

Process

Infrastructure

Partners

Total £369m

Systems Support

Cost Delivery

National Distribution Centres

Stock

-Scheduling

-2 man deliveries

-1 man deliveries

- 75 Distinct Services

- Magna Park automation

- Reverse Logistics

- Enterprise Resource Planning (ERP) solution from

Working in partnership

Questions