The Internet of Things: Driving Automated Replenishment

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Presentation given at the 2016 Supply Chain Insights Global Summit - 7-9 SEP 2016 at The Phoenician in Scottsdale, AZ The Internet of Things: Driving Automated Replenishment • Chris Clowes – Senior Supply Chain Development Manager, Walgreen's Boots Alliance (formerly at Costa Coffee) Costa Coffee had a choice. They could either make their current operation more efficient or redesign the process to drive an autonomous supply chain to leapfrog competition. They chose the latter. Through the use of machine signals, they were able to redesign distribution processes to drive automated replenishment and drive growth and improve supply chain results. To see the video go to http://supplychaininsightsglobalsummit.com/2016-summit-presentations/

Empresariales

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Chris Clowes
Walgreens Boots Alliance
Senior Supply Chain
Development Manager

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
The Internet of Things:
Driving Automated Replenishment
Chris Clowes
Walgreens Boots Alliance
Senior Supply Chain Development Manager

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
REVOLUTIONISING BUSINESS
THROUGH INTELLIGENT DATA
2013
RE-ENGINEERING
2014
CONSOLIDATING
2016 & BEYOND
STEP CHANGE

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Submission
WHO AM I?

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
1971 1999 2006 2009 2011 2011 2012 2013 20132009
40 YEARS OF
LOOKING FORWARD

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Submission
2012

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Submission
2,498 UK
MACHINES
INCUMBENT
PROVIDER
LEGACY
I.T.
OLD OPS
STRUCTURES

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Submission
THE VALUE OF
REVOLUTION

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Submission
APRIL 2012
SUPPLY CHAIN
TEAM
TOOK
OWNERSHIP
JUNE 2012
APPLIED
PLASTER TO
CURRENT
SOLUTION
JULY 2012
TENDERED
LOGISTICS
AND IT
SOLUTIONS
NOVEMBER 2012
CHOSE TOOLS
GROUP’S
SO99+ AND
APPOINTED
HOWARD TENENS AS
LOGISTICS PROVIDER
JANUARY 2013
GO LIVE WITH
BOTH
SIMULTANEOUSLY
APRIL 2012
NPS SCORE
UP TO
RECORD
LEVELS

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Submission
2013

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Submission
INTRODUCED
NEW PLANNING,
OPTIMISATION
AND PROCESS
IMPLEMENTED
TOOLSGROUP’S
SO99+
SOFTWARE
REDEFINED
THE ROLE OF
OUR FIELD
TEAMS
ALL WHILE
MANAGING
RAPID CHANGE
& GROWTH

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Submission
BIG DATA
BETTER SERVICE

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Submission
THE NETWORK

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
FORESIGHT

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
ACCURACY

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AUTOMATION

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Submission
OVERALL NET
PROMOTER
SCORES
INCREASED
BY 10%
20%
REDUCTION
IN STOCK
HOLDING
AT SITES
20% COST
REDUCTION
AND
70 TONNES OF
CO2 SAVED
INCREASE
FROM
900 MACHINES
TO OVER 4,300

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
APRIL 2012 JUNE 2015
UNPRECEDENTED
GROWTH

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Rich user interface in full HD
Evocative sound track with
burring grinder and tinkling
of spoons
Memorable flavours and
fragrances
Cutting edge reliable /
ultra efficient computer
processing hardware
Stunning curved design by
Italian automotive designers
Irresistible aromas of Costa’s
coffee shops
Innovative coffee-making
system providers
BOLD NEW PRODUCTS

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
INTERNATIONAL EXPANSION
IRELAND
POLAND
UAE

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
SUPPLY CHAIN
MACHINE
NEW MARKETS

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SO WHERE TO NEXT?

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Submission
2014

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Submission
INTERNAL
OPERATIONAL
STRUCTURE
REALIGNMENT
OPTIMISING
BACK OFFICE
SYSTEMS
DEFINING
STRATEGIC
GROWTH PLAN

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
2016: DOUBLE OUR SIZE - AGAIN
877
COFFEE NATION
4,292
2014/15
C. 8,000
2020*

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Proven operation &
back office system
Real time
demand
planning and
supply chain
Operational
Support
The perfectly prepared
Mocha Italia coffee
Proprietary
equipment
Unique telemetry
& monitoring
World-class
helpline support
WITH OUR WORLD-CLASS SUPPORT SYSTEM

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Submission
2016 & BEYOND

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
Submission

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
AUTOMATED
COMMISSIONING
LIVE OPERATIONAL
DATA BY MACHINE
IMPROVED MACHINE
MONITORING
AUTOMATED OPERATOR
ALERTS
DYNAMIC MACHINE
LOCATION INFO
RESILIENT MACHINE
CONNECTIVITY
RE-INVENTING BACK OFFICE SYSTEMS

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
THE INTERNET OF THINGS
LEVEL 0
MACHINE ALERTS: MESSAGE ON SCREEN, WITH OPTIONAL ALARM
LEVEL 1
SITE ALERTS – MESSAGE TO COSTA EXPRESS PROVIDED DEVICE
LEVEL 2
PARTNER ALERTS – ESCALATION TO SITE / AREA MANAGEMENT
LEVEL 3
SERVICE AGENT ALERTS – VIA EMAIL, SMS, OR SERVICE TICKETS
LEVEL 4
COSTA EXPRESS CONTROL CENTRE
OPERATIONAL ALERTS
TECHNICAL ALERTS

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
2012
2,498
MACHINES
1
MODEL
1
COUNTRY
AUTOSTOCK
INCUMBENT
LOGISTICS
PROVIDER
OLD OPS
STRUCTURE

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
3,202
MACHINES
2
MODELS
3 TRIAL
COUNTRIES
SO99+
HOWARD
TENENS
OLD OPS
STRUCTURE
2013

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
3,862
MACHINES
2
MODELS
7 TRIAL
COUNTRIES
SO99+
GRID
DEVELOPED
HOWARD
TENENS
OLD OPS
STRUCTURE
2014

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
2
MODELS
7 TRIAL
COUNTRY
SO99+
GRID TRIALED
HOWARD
TENENS
NEW OPS
STRUCTURE
2015
4,692
MACHINES

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
4
MODELS
9 TRIAL
COUNTRIES
SO99+ -
GLOBALLY
GRID
LAUNCHED
HOWARD
TENENS -
GLOBALLY
FURTHER
NEW OPS
STRUCTURE
5,600
MACHINES
2016

9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030
THE REVOLUTION
CONTINUES

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A critical look at three years of supply chain disruption. Using quantitative and qualitative research, Lora Cecere, Founder of Supply Chain Insights, looks critically at the factors within companies that drove resilience and the factors less successful. Companies that won were aligned, used market signals, decreased process latency, used scenario planning, and implemented descriptive analytics. Those that fared worse, had tight integration of supply chain planning to ERP, were not aligned, and were focused on a digital transformation strategy.

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31. 9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030

32. 9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030

33. 9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030 THE INTERNET OF THINGS LEVEL 0 MACHINE ALERTS: MESSAGE ON SCREEN, WITH OPTIONAL ALARM LEVEL 1 SITE ALERTS – MESSAGE TO COSTA EXPRESS PROVIDED DEVICE LEVEL 2 PARTNER ALERTS – ESCALATION TO SITE / AREA MANAGEMENT LEVEL 3 SERVICE AGENT ALERTS – VIA EMAIL, SMS, OR SERVICE TICKETS LEVEL 4 COSTA EXPRESS CONTROL CENTRE OPERATIONAL ALERTS TECHNICAL ALERTS

34. 9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030 2012 2,498 MACHINES 1 MODEL 1 COUNTRY AUTOSTOCK INCUMBENT LOGISTICS PROVIDER OLD OPS STRUCTURE

35. 9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030 3,202 MACHINES 2 MODELS 3 TRIAL COUNTRIES SO99+ HOWARD TENENS OLD OPS STRUCTURE 2013

36. 9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030 3,862 MACHINES 2 MODELS 7 TRIAL COUNTRIES SO99+ GRID DEVELOPED HOWARD TENENS OLD OPS STRUCTURE 2014

37. 9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030 2 MODELS 7 TRIAL COUNTRY SO99+ GRID TRIALED HOWARD TENENS NEW OPS STRUCTURE 2015 4,692 MACHINES

38. 9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030 4 MODELS 9 TRIAL COUNTRIES SO99+ - GLOBALLY GRID LAUNCHED HOWARD TENENS - GLOBALLY FURTHER NEW OPS STRUCTURE 5,600 MACHINES 2016

39. 9/24/2016 September 2016Supply Chain Insights Global Summit #Imagine2030 THE REVOLUTION CONTINUES

Notas del editor

Chris Clowes, International Operations Manager of Costa Coffee
- 2013: Reengineering a supply chain - 2014: Consolidating changes to sustain growth - 2015 & beyond: A Business step change
- Keele University - Moved into International Operations after a career in Supply Chain - Arsenal, Wasps, England
- Background and context to Costa Express growth - Strong growth that’s accelerating
- Limited control with increased costs in the supply chain
- Unique business model pushes stock to sites free of charge - Over 2,000 linked spreadsheets barely coping with 50,000 replenishment combinations - Incumbent logistics provider in place for 12 years - No direct contact with suppliers - Business more than doubling in size in less than 12 months
- Driving change to deliver value to stakeholders
- Overview of changes identified and delivered in under 12 months
- 2013, the year of revolutionising the supply chain and the business
- Overview of changes in our supply chain implemented in early 2013
- Spans key supply chain areas - Use actual daily sales data to sense demand - Calculates how much stock to send to a site - Enhanced stock visibility and reporting - All done using innovative demand modelling technology
- Network solution: 30 suppliers; 6 warehouses; 4,500+ machines; multiple countries
- A monthly drinks forecast example
- Daily forecast – 10 or 70 cappuccinos today
- Planned coffee deliveries
- The year of change
- 50% reduction in number of refusals - Management of new relationships with over 15 suppliers with no loss of service - Move to new 3PL with no loss of service, - Implementation of SO99+ with no loss of service - Significant driver of Whitbread growth and success
- Changes put against a backdrop of huge and unprecedented growth
Introduction of new model (machine type) – keeps us ahead of the curve and revolutionises once again the category
- Growth and sustainable businesses in UAE, Poland and Ireland now
- We have a supply chain ready, a machine, and new markets to grow in to – what else do we need?
- Internal operations structure reviewed and realigned for sustained growth - Internal IT systems reviewed to support rapid growth
- Preparing Costa Express for a new growth phase - Internal project launched – “How do we accelerate our growth?” - Fundamental review of all operational, IT and international growth strategy
- Internal realignment phase two – operational structure - IT Project– making our back office systems work - International Strategy –defined growth plan
- Grid enables smart machine alerts, leveraging the Internet of Things
- 2013: Reengineering a supply chain – using sales data to replenish sites
- 2014: Consolidating changes to sustain growth - in the UK international expansion
- 2015 +?: Total business step change – delivering new operational structures and IT changes
- 2016 +?: Total business step change – delivering new operational structures and IT changes

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