1. operational excellence through integration
“product design to delivery”
retail & sales planning
methodology overview
V.2.2
200809

2. team composition
a team of industry professional with relevant
hands-on experiences on the market
markets
Made in Italy Luxury Goods Automotive
Customer eXperience Mgmt
lines
Supply Chain Mgmt
Business Intelligence
Retail Management

3. our mission
increase our client’s performances
implementing
tools, methodologies,
services, and expertise
to increase customer loyalty and
to streamline sales & logistic activities.

4. what we do
ncrease efficiency and streamline activities of
“design to deliver”
supply
product retail business
chain CRM
design operation intelligence
mgmt
business process reegineering
leverage on the expertise already present in the company
sustain change management
design and implement business intelligence applications
project management during software implementation, web-based sw development
increase usage of existing sw application through user training and support

5. our methodology
Discover
• process owners & key players interview
• process & IT applications assessment
• gather business needs
Diagnose
• identify critical success factors
• organization
• operation
• finance
Design
• to be plan
• “gap” analysys
• implementation plan
• change management plan
Deliver
• implement plans
• project management
• time
• cost

6. objectives
setting
lines of action
negative
signnals
actions
new products
launch
POS
segmentation
forecasting
supply chain management
replenishment
key perform.
indicators
key learning
points

7. business objectives
organizaton / operations
• increase flexibility and readiness of entire
design to delivery process
service / volume • roles and responsiblities re-alignement
• re-fucus each resource on its core inventory / financials
• increase POS sales forecasting
competences
demand and a better execution of
• reduce new products stock-out
assortment/castegory
during early months of sales
management
• increase stock turnover controlling
• increase new products sales during
and optimize inventory over the
launch and post-launch period
entire supply chain
• increase sales orders fill-rate and
• sustain company growth with no or
respect of promised delivery date
minimum increase of inventory
• make a more reliable forecast of
• obsolete management
demand through the usage of
advanced BI toolsi
maximise
shopping
eXperience

8. lines of action
organization
realignment
streamline
POS segmentation
operations
As Is
budgeting & product
forecasting assortment

9. negative signals
product sales &
purchasing production
assortment marketing
weak control of sales forecast by
purchase orders driven
sales forecast by sku
assortment business unit
by personal taste / gutt
• no unfullfilled demand
• brand, feeling • country / sales channell
analysis at POS
• area / country, • breakdown by product
• little or no usage of BI info, • unsctrucured awereness of category using past sales
• shop / pos
• stock turnover objectives new opening plans and data only
set at category level seasonality at POS
no product stock-out inventory level forecast
analysis stock turnover set by • by product category only
new products
financial objectives not • underestimate seasonality
• little or no alignment with
by customer experience and new products launch
sales & mktg
loosely defined expectations
• understimation of product
processes & procedures
needs to sustain
new products sales
• no periodic assessment of distribuition network
assortment, forecast
growth
low POs’ fill-rate and
• new shops opening, • production capacity limits
respect of delivery dates • underestimate
• new products launch sales forecast cannibalization

10. indicated actions
sales & sales &
marketing marketing
production logistics
(corp.) (local)
sales data quality
procurement plan segmentation & safety level definitions
assortment • correctdness
• strategic raw materials
• central warehouse
• timeliness
• components and WIP • products • area warehouse
management • pos • shop warehouse
project management
engineering of new
• promotion
global and local
products new products • new shop / pos opening
distribution plan
• increase reusability of • creative briefing
existing components • launch strategies
• distribution strategies on
demand forecast
different sales channels BI competence center
actual production
• capture unfilfilled demand
• keep promised quantities & at shop / pos
delivery dates • BI tools
• increase flexibility sustain and champion
sales forecast • sales forecast at macro
• postponement level change
consolidation
• control product quality

11. segment product assortment
define key dimensions
• identify and agree on key dimensions of each business line and / or
product line
• assign and maintain key dimensions to each sku
definition of assortment cell
• all sku’s that have same values of their key dimensions
assortment cell is the basic tool to:
• be perceived as “different” (assortmentwise) by the final customer
• control and measure stock-outs
• forecast sales
• define product obsolescenze and manage “long tail”

12. product assortment grid
Bracelets / Retail price: 1,000 – 5,000€
Steel Steel-Gold Gold-Steel Gold
Plain Sku1 Sku2 Sku3 Sku4
Sku5 Sku7 Sku8 Sku10
Sku6 Sku9
Semiprecious Sku11 Sku12 Sku14 Sku17
Sku13 Sku15 Sku18
Semiprec.-Prec. Sku20 Sku22 Sku24
Sku23 Sku25
Sku26
Preciuos Sku27 Sku30
Sku28 Sku31
Sku29 Sku32
Diamonds Sku33 Sku34 Sku35 Sku36
Sku37
Sku38
Rubies Sku39
Sku40
Emeralds Sku41
Zaffires Sku42

13. new products launch process
As Is To Be
stand-alone shared
unstructured structured
reactive / late proactive / planned
4. sales meetings and sell-in orders
1. product brief
– first update to purchasing and
– agreed with sales / mktg / production
replenishment plan
– expected retail price band
2. collaborative forecasting 5. merchandise delivery to shops
– consensus based
and POS
• corporate
• areas / sales channels managers
• marketing corporate & local
6. early sales analisys
• production
• logistics
7. second update to purchasing and
– impact on existing products
3. distribution plan replenishment plan
– expected service levels  safety stocks levels
– purchasing and replenishment plans

14. shop and POS segmentation
shop segmentation
 strategic & brand image building  location
̶ flagship ̶ on street
̶ level 1 ̶ shop in shop
̶ level 2 ̶ shopping mall
̶ level 3 ̶ travel retail outlet
BU # 1 on street shop in shop shopping mall airport
flagship 2 full
BU # on street shop in shop shopping mall airport
marketing
level 1 full full high1
flagship 3
BU # on street shop in shop shopping mall airport
level 2 1 full full high2 high2
level high1
flagship full
level 3 2 high2 full
level high1 high2 high2
level 1 high1 high2
level 3 2 high2 high1
level high2 low1 low2
level 3 low3 low3

15. forecasting cycle (top down approach)
sales forecast
by quarter by product category
responsible
sales forecast by sku
monthly forecast by shop / sales channel by sku
sales /
agreement on sales forecast mktg
updates/changes at assortment cell level
definition of inventory levels CEO
safety stock levels by area / shop by month by sku
sales forecast approval
logistics
group-wide sales forecast
acquisti
purchase plan by month by sku
distribution plan
delivery plan by warehouse by sku by month

16. anticipate customer demand
safety stock levels defined taking into consideration product
typology and its seasonality
• Core (fast movers): no stock-outs expected
• Select (slow movers): no stock-outs expected on assortment cell
flexible purchase plan
• moving purchase plan
• scope of purchase plan equal to product lead-time
• flexibility bands vary according to production processes
trend
0% 20% 50%
flexibility
band
month 1 month2 month 3 month 4 month 5 month 6 month 7 month 8 month 9 month 10 month 11 month 12
delivery plan

17. replenishment – owned shops
each shops makes available daily sales and stock levels data
logistics calculates inventory gaps by shop by sku
logistics calculates the optimal distribution plan to:
• replenish shop filling the inventory gaps, and replenish the entire
supply chain if needed
• anticipate shop and product seasonality
replenishment frequency: based on sales forecast and distribution network
safety stock changes to
sales purchasing product on inventory
delivery plan levels sale delivery
forecast plan shekves gaps
definition plan

18. key performance indicators
sales forecast variances vs. actual sales
expected vs. actual operation activities and costs
re-orders re-routing delays obsolete
 budget  production  outlet
central warehouse

 forecast update  central warehouse  auctions
sales  area warehouse  e-commerce
area warehouse
Production  new product  reverse logistic
 inventory levels launches intraarea
area warehouse
central interarea

area
shop
shop / POS

19. key learning points
“soft”
 get quick wins asap,
 top management sponsorship,
 increase and reward operations flexibity,
 align customer experience objectives with corporate and personal objectives,
 change management,
 right mix of data analysis and gutt feelings.
“hard”
 standardize, streamline and accelerate information flows,
 standardize, streamline and accelerate business processes,
 don’t stop to communicate and align:
 shops,
 key players,
 what’s going wrong and the relevant countermeasures,
 product shortages and action plan to minimize bad effect on customer experience.

20. thank you
Ing. Fabio O. Bernardini
Managing Partner
mobile +39 3383497750
office +39 0683398345
email: fabio.bernardini@e-xperience.it
founder of “Made in Italy & Luxury Goods” social network