bill stankiewicz expressdeliveries

Hi Tech & ElectronicsSupply Chain Summit 2007

Top Express Deliveries StrategiesSeptember 2007

Amsterdam

Agenda

• Vodafone Group

• Vodafone Portugal

• Express Deliveries

– How did it start

– Service Evolution

– Lessons Learned

Vodafone Group

The Vodafone Group

� Presence in 61 countries: equity interests in 25 countries and partner networks in further 36 markets

� 232 million Proportionate Customers* as of 30 June 2007 (does not include partner networks’ customers)

� Around 66,000 Employees

� Group Revenue in 2006** of £31.1 billion (around 46 billion euros)

• The world’s leading mobile telecommunications company

*Customer number adjusted by the Vodafone Group’s equity interest in each operator** 2006 Vodafone fiscal year refers to the 12-month period ended on 31 March 2007

Vodafone Portugal

� 100% owned by Vodafone Group

� Portuguese second largest telecommunications operator

(after the incumbent)

� Total operating revenue of 1,4 billion euros in 2006 *

� Around 1,700 Employees

� Around 4.8 million Customers as of 30 June 2007

• Pre-paid customers represent 79% of total customer

base

Vodafone Portugal

* 2006 Vodafone fiscal year refers to the 12-month period ended on 31 March 2007

Anos de Calendário

Customers Market share

33.2%35.7% 36.3%

31.6%

48.0% 47.1%44.4% 43.6%

20.1%19.9%19.7%20.4%

31 Mar 04 31 Mar 05 31 Mar 06 31 Mar 07

Service Revenue Market Share

34.3%36.2% 37.7%

39.2%

43.0%44.3%45.1%46.2%

19.5% 18.7% 18.0% 17.7%

2003/04 2004/05 2005/06 2006/07

� Vodafone has consistently gained market share to its competitors in the mobile

market. In the last 3 year Vodafone Portugal gained almost 5 percentage points

of customers and service revenue market share

Calculated using the information disclosed by each operator.

Vodafone Portugal

Vodafone Portugal Supply Chain

HANDSETSUPPLIERS

SIM CARDSUPPLIERS

COMPANYBUSINESS LINE

(DIRECT SALES FORCE)

CONSUMERBUSINESS

LINE

VODAFONEBRANDEDSTORES

CUSTOMERS

OWNSTORES

OTHERREAILERS

DISTANCESELLING

Vodafone Portugal Supply ChainMain structure

VMIAgent StockManagement Supply

NetworkPlanning

DemandPlanning Forecast

p^mL^ml

Web connection from VBSDailyCommunication

Vodafone Portugal Supply ChainNetwork Fulfilment

€ 1 = 2 points

Vodafone Portugal Supply ChainLoyalty programme

• Points deduction

• Permanency contract

Siebel SAP R/3 Carrier execution

Order

creation &

validation

InvoiceSales Order

CreationCollection

Customer

Places order

Stock

Capture

To

order

Picking & Packing

Delivery

By mail

Payment Received

coupon

Loyalty programmeCustomer order process workflow - initial

The signed coupon worked as a signed contract

For the permanency period

The physical process was done in warehouseWarehouses are outsourcedBut working on VF-PT SAP system

Express DeliveriesHow everything started

How everything started

• In 2002 we decided to delight our customers

– By making express deliveries

–24 hours max. Since their request into their homes!

• What would you say?

– EXPENSIVE!

–Right! We thought so too… so implemented it only for our bestcustomers

Customer Order Process Workflow - 2003

Siebel SAP R/3 Carrier execution

Order

creation &

validation

Invoice

Sales Order

Creation

Collection

Customer

Places order

Stock

Capture

To

orderPicking & Packing

Delivery

By mail

Payment Received

coupon

Shipping

Centre

selection

Televiva:

For Lisbon

or

Porto

Sales Order

Creation

Stock

Capture

To

order

If no stock,

manual switchto standard expedition

Delivery

By carrier

Based on postal code

The physical process for mail was still done in warehouseTeleviva process was done in house warehouse

Customer delivey

schedule

Customers Voice

• 2003 was the analysis year of the project

• Our customers said:

– Satisfaction with delivery time: 3,3 in a 4 level scale

0%

5%

10%

15%

20%

25%

30%

1 day 1 - 5 6 - 10 11 -15 16 - 30 + 30 N.a.

Overall Satisfaction

Delivery Service

Base: 1294 interviews

1-

Po

or

10

-V

ery

Go

od

1% 0% 0% 1%

5%4%

7%

28%

20%

34%

8,478,47

0%

10%

20%

30%

40%

1 2 3 4 5 6 7 8 9 10

1

2

3

4

5

6

7

8

9

10

Média

Express DeliveriesThe evolution

Actual Clube VIVA WorkflowCustomer Delivery Schedule

Siebel SAP R/3 Transporter’s Information Systems

Customer

Places order

• Coupons were abandoned

• The whole process has gone digital

• Web offer was introduced on

Vodafone.pt with on line catalogue

• Customers can easily make the orderthemselves

WEBCall

Center

Web





Order

creation &

validation

Shipping

Centre

selection

Customer

Places order

Phase 2

• Centralize all Televiva warehouses in

the main operation

• Actual structure:

•2 outsourced warehouses for

the entire VF operation

•No dedicated warehouse

•Divided by brand

• 2 small warehouses in the

islands: Madeira & Azores

WEB

Call

Center

Web

Phase 1

• A regional expansion was done

based on in house warehouses

proliferation

• The warehouses localization was

based on regional decisions to get

closer to customer and reducedelivery time

• Stock ruptures problems arose

• Cost duplication

• Customer added value was not quickdelivery





Televiva:

4 warehouses:

outsourced (2)

Islands (2)

Order

creation &

validation

Shipping

Centre

selection

Sales Order

Creation

Customer

Places order

Stock

Capture

To

order

• Done previously to invoicing

•Instead of sending handsets to

carrier we are sending ordersinformation

• On a daily basis system pulls out all

the orders created in that day

• Creates a web table and sends it to

carrier via xml

• Carriers incorporates information into

their routing system

• Some orders will already have

delivery date agreed with customer

WEB

Call

Center

Web

Orders placed

Informed to carrier





Order

creation &

validation

Shipping

Centre

selection

Sales Order

Creation

Customer

Places order

Stock

Capture

To

order

Customer delivey

schedule

• Possible to be done in VF call centre

• Carrier time schedule is incorporated

in Siebel

•Assistant can choose on line

with customer time and place ofdelivery

• No scheduling to:

•Weekend and holidays

•If is an island postal code

•If no stock available

•In these cases delivery date is

left blank

WEB

Call

Center

Web

Orders placed

Informed to carrier

Done by carrier

No scheduled deliveries





Order

creation &

validation

Shipping

Centre

selection

Sales Order

Creation

Customer

Places order

Stock

Capture

To

order

Customer delivey

schedule

• On a daily basis carrier pulls from its

system sheduled deliveries for the

day after the following day

• Sends information directly to

outsourced warehouses via WEB

• Warehouse stores information on

local database in dispatch area

WEB

Call

Center

Web

Orders placed

Informed to carrier

Deliveries

scheduled



Shipping

Centre

selection

Sales Order

Creation

Stock

Capture

To

order

Customer delivey

schedule

• By the end of the day carrier picks up stock for the deliveries

• During the night makes their internal transfers

• Delivery confirmation is uploaded by palm on the moment of delivery into carrier

system

• Carrier uploads information into web for on line research

•By VF back office

•By VF call centre

•By the end customer himself

Web

Orders placed

Informed to carrier

Deliveries

scheduledInvoice

Picking & Packing

Delivery

By carrier… Delivery

confirmation



• The carriers along with the palms started using portable ATM

• ATM supported on GPRS supplied by VF

• Payment is done directly into our bank account with no need of cash transportation or

bank transfers

Web

Deliveries

scheduledInvoice

Picking & Packing

Delivery

By carrier… Delivery

confirmationCollection

Payment Received

Cash delivery

ATM payment

Evolution Summary of Express Deliveries To amend

Mail

delivery

Initial Stage

Regional expansion to

entire country

2004

Centralization

2005

Informationsand

Systems

integration

2006

Pilot in Lisbon

And Porto

2002

Express DeliveriesLessons Learned

KPI´s evolution

Initial 2004 2005 2006

Mail delivery rate 100% 75% 99% 99%

% Returns 10% 9% 6,50% 6%

Cost evolution initial -6% -16% -12%

Lessons Learned

• For customers is more important to be trustworthy than to be quick

– Ex : 8% of deliveries were asked for the following 2 days

• Integration really works

– By scheduling directly with customer on order moment

–Reduction of outbound calls by carrier – cost reduction

–Single contact to customer

• Communication is needed

– Everybody accessing the same information and giving the same inputs to customers makes life really easier for everybody

And easy is cheap…

Lessons Learned

• Replacing inventory by information integration allowed us to:

– Reduce unnecessary billing

– Unnecessary shipping

• Replacing mail delivery by a premium delivery system

– Reduction of returns

– Customer satisfaction increase

Operational Costs Reduction

Future developments

• 6 Sigma analysis of the process focusing on:

– Impossible to schedule delivery with customer

– Although is scheduled final delivery fails

• Express Deliveries will be applicable to:

– Web Sales

– Telemarketing Sales

– …

Not Always better service meanshigher costs!

THANK YOU!

Mafalda Alves Dias

Logistics Manager – Vodafone Portugal

[email protected]

+ 351 919 406 565

bill stankiewicz expressdeliveries

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