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Case StudiesMarch 2013

22 Sell More – Stock Less – See Everything

PCG developed a systematic process that supports efficient analysis of over 1,600 items in over 4,000 locations that have 8-12 attributes

Both retailer and supplier can now view the same comprehensive analysis that was previously impossible

WIP – moving to scan-based trading using store-level replenishment

Massive Overstocks & Out-of-Stocks DiscoveredThru Visibility and Big-Data Analysis

RESULTS:

A national retail chain with over 4,000 stores couldn’t determine where they were overstocked or out-of-stock on their popular reading and sunglasses

CHALLENGE:

PCG Identified $25 million inventory reduction opportunity from improved management of inventory and ensuring best-sellers were in-stock in all planograms providing foundation for store-level ordering

Sales increase estimate of $5-8M annualized from improved distribution voids and reduced out-of-stocks

33 Sell More – Stock Less – See Everything

RESULTS:

Sales Up 8% With Visibility, Store-Level Replenishment, & Big Data Analysis

CHALLENGE:A large, national dairy lacked visibility to in-store performance and was not using actual consumer demand via point-of-sale data to create replenishment orders. They also suffered from high out-of-stocks, and high returns (dumps).

Sales dollar trend Year over Year improved by 8% Sales units trend Year over Year improved by 9.3% Out of stocks have been cut by 50% Returns have been cut by almost 50%

SOLUTION: Park City Group analyzed big data and using the results coupled with

store-level replenishment, they were able to match delivery to actual consumer demand improving overall performance

4 Sell More – Stock Less – See Everything

Utilizing PCG Store Level replenishment coupled with warehouse VMI, the supplier has been successful in improving in stock positions

Returns have been greatly reduced Program is being expanded to add items from the initial supplier as

well as other suppliers also serviced by this broker

The supplier wanted to use direct consumer demand to generate warehouse level replenishment orders for a select group of items

Warehouse level orders needed to “pass through” the Club Depots leaving no on hand inventory at this location

Warehouse inventory levels to be balanced and returns reduced

RESULTS:

CLIENT:

SCOPE:

Exclusive supplier of quality products to a club warehouse retailer using a brokerage model

Cross Docked SLR Reduces Out-of-Stocks Cross Docking Store Level Replenishment: Supplier

5 Sell More – Stock Less – See Everything

National Craft Brewer

Gained control of ordering process and reduced returns by 40% Reduced out-of-stocks at the distributor level by 22% Increased sales through the distributor network by 11% in the first 12

months Improved delivery of seasonal products to reduce returns and

increase sales

Distributors ordering in random fashion resulting in high returns Many highly seasonal products with short lifecycle Developed “Freshest Beer Program” in improve quality to consumer Need for increased control of inventory levels at 400+ national distributors

RESULTS:

CLIENT:

SCOPE:

Leading brewer of seasonal and year around craft beers that does not own distribution network

Sales up 11%; Returns Down 40%; Out-of-Stocks Down 22% Vendor Managed Inventory: Through Distributors

66 Sell More – Stock Less – See Everything

RESULTS:

CLIENT:

Reduced inventory quantities by 1/3 Reduced inventory costs by $170 million across Grocery, Dairy,

Frozen, GM and HBC departments (over 6 full operating years) Reduced safety stock by 55% in the Grocery department

CHALLENGE: The current ordering system didn’t support ordering from multiple distribution

centers All products were being ordered without regard to how fast they were selling, or

how much stocking space existed, creating inconsistent stock conditions and resulting in lost sales and overstocked slow moving items

Efficiently Scaled to Meet Demand and Saved MillionsDC Procurement using Demand Forecasting and ABC Analyzer

“Best–in–Class” Retailer

“Best-in-Class” implemented PCG’s computer-aided ordering system including the ABC Analyzer feature coupled with PCG’s consulting

SOLUTION:

“Collaborative data sharing can achieve these types of results. We’re looking forward to expanding this program beyond the warehouse…to Direct Store Delivered suppliers.” – Supply Chain Executive, “Best-in-Class”

77 Sell More – Stock Less – See Everything

Out-of-Stocks Reduced by 15%; Smoothed DemandDemand Planning

RESULTS:

CLIENT:

Reduced out of stock conditions by 15%; reduced inventory levels by 15% Able to maintain better in-stock conditions on high-demand items Better able to manage the different demand conditions of their widely

different customer base; maintained expected customer service levels

CHALLENGE: Each customer had different replenishment requirements

(safety stock, forecast, etc.) and tons of information. Data from disparate sources made planning difficult.

S. Lichtenberg & Co. (Sheer Curtains)“As a leading manufacturer of private label curtains & draperies we needed to be able to cope with our customers’ random demand and manage situations where demand doesn’t behave consistently. PCG’s demand planning solution enabled us to reduce stock outs and inventory at the same time. The solution has a lot of bang for the buck and their customer service is outstanding.” – Scott Lichtenberg, President / Owner

88 Sell More – Stock Less – See Everything

RESULTS:

EXAMPLE: Store-Level Replenishment In Dairy

CHALLENGE:A large, national dairy lacked visibility to in-store performance and was not using actual consumer demand via point-of-sale data to create replenishment orders. They also suffered from high out-of-stocks, and high returns (dumps)

Sales dollar trend YoY improved by 8% Sales units trend YoY improved by 9.3% Out of stocks have been cut by 50% Returns have been cut by almost 50%

SOLUTION: Using a scan-based trading go-to-market strategy coupled with PCG’s

store-level replenishment solution, they were able more closely match delivery to actual consumer demand

99 Sell More – Stock Less – See Everything

Sales Increase 3x, Returns Decrease 50%Using Scan-based Trading & Store-level Replenishment in Dairy Case

Direct head-to-head ComparisonA national mass market retailer doing SBT recently studied two suppliers to the dairy case. One used only scan-based trading (SBT). The other used the entire suite of Park City Group SBT solutions, including store-item level analysis and ordering. A pre/post test analysis showed incredible results.

The supplier using Park City Group’s entire suite …─ Increased sales three times more (8%/Supplier A to 2.5%/Supplier B) ─ Reduced waste (product returns) 50% more

RESULTS:

CHALLENGE:

…than the SBT-only supplier

1010 Sell More – Stock Less – See Everything

Sales Trend Up 7%, Returns Trend Down 20%Using DSD Visibility & SBT in Commercial Bakery Category

RESULTS:

CHALLENGE:

INCREASED SALES dollar trend by 6.9% even though total grocery sales were trending down

REDUCED RETURNS by 20% Program expanded

Mid-Size, Mid-western Regional Retailer wanted to increase sales and reduce out-of-stocks in their commercial bakery department

SOLUTION:Analysis showed out-of-stocks, returns in excess of industry norms, and sales opportunities by store, by SKU. Space–to-sales planograms were developed, vendors were score-carded and performance improved. The PCG process became integrated into their category strategy. Success is providing basis for expansion into another category.

1111 Sell More – Stock Less – See Everything

“Day of Week” Sales Trends up 45% in SnacksUsing Scan-based Trading / Store-Item Analysis in Snacks

A large, regional retailer had huge holes on the shelf where the favorite snack chip products had sold out, but only on certain days.

Sales Trends increased by 45%RESULTS:

CHALLENGE:

Using a SKU analysis approach with scan-based data, changing the strategy to deliver and stock based on heavy consumer demand days solved the problem and increased customer satisfaction

SOLUTION:

1212 Sell More – Stock Less – See Everything

Shrink is nearly 70% Less using Park City GroupScan-based Trading

Park City Group Retailer Non-Park City Group Retailer

00.10.20.30.40.5

.14%

.45%

Shrink % $/Inventory

Shrink averages three times

higher without PCG

“We run significantly lower shrink when the retailer is a PCG partner, versus our other SBT retailers who do not have a relationship with PCG. With synchronization, all pricing and promotional errors are identified before the fact rather than after, virtually eliminating the tedious task of identifying and resolving these issues.” – SBT Operations Director, National Commercial Bakery

1313

Shrink Reduced by 44% in DairyUsing Scan-based Trading, PCG Analysis & DSD Visibility

RESULTS: Shrink managed down by 44% and maintained in dairy

industry average range of 1-2%, by following PCG’s process guidance and using PCG’s SBT and analysis tools

Product returns are down by 30% by using PCG’s Visibility tools

PCG analysts reviewed the stores with high shrink and identified several process issues. Returns were not being captured and reported; and some items were not scanning accurately. Both created lost revenue for the Dairy and high shrink for both retailer and supplier.

Sell More – Stock Less – See Everything

CHALLENGE:This dairy supplier to a large, regional retailer was recording high waste

SOLUTION:

1414

Shrink Reduced by 44% in DairyUsing Scan-based Trading, PCG Analysis & DSD Visibility

RESULTS: Shrink managed down by 44% and maintained in dairy

industry average range of 1-2%, by following PCG’s process guidance and using PCG’s SBT and analysis tools

Product returns are down by 30% by using PCG’s Visibility tools

PCG analysts reviewed the stores with high shrink and identified several process issues. Returns were not being captured and reported; and some items were not scanning accurately. Both created lost revenue for the Dairy and high shrink for both retailer and supplier.

Sell More – Stock Less – See Everything

CHALLENGE:This dairy supplier to a large, regional retailer was recording high waste

SOLUTION:

1515 Sell More – Stock Less – See Everything

Sales Up 3%, Returns Down 5% for Bread SuppliersUsing Category Analysis & Change Management in Commercial Bread Category

RESULTS:

CHALLENGE:

INCREASED SALES by 3% even though bread sales “ROM” were down REDUCED RETURNS by 5% giving the consumer fresher product

Bread sales were stale. Product returns were exorbitant. Consumers were unhappy, and so was the Retailer.

SOLUTION:PCG’s analysis conducted as part of a collaborative project with the retailer and the entire bread category showed out-of-stocks, returns in excess of industry norms, and sales opportunities by store, by SKU for each bread vendor. Space–to-sales planograms were developed and schematics were adjusted. One vendor got more space, another expanded distribution, and yet another was able to ‘right-size’ their brand mix. This collaborative approach used the same objectives, metrics for measurement and results in discussions to resolve issues that supported productive business meetings.

All bread suppliers rose to the challenge and gained sales, reduced returns and the consumers were rewarded with fresher bread

Business meetings became more productive