Asda Supply Chain 2020 ECR Food Waste & Markdown Working Group Production Planning
Sam McPherson Senior Manager – Central Supply & Strategy Asda Supply Chain 2020 Fresh Production Planning • Introduction • The Problem & Benefits • The Journey • The Challenges • Our Solution • The Results • Next Steps
Asda in Pictures Asda Supply 209 32 341 Chain 2020 4 18 33 650 240 39
Asda in Numbers o 633 Stores serving 19m Asda customers each week Supply o 39 Distribution Centres Chain delivering 1.9bn cases per 2020 annum from 4k vehicles making 800k deliveries o 140k Colleagues o 98% of UK homes served by Asda.com o 15m Click & Collect orders per annum from 650 sites
The Problem & Benefits Problem Production lines Production areas Lack of central Asda are profitable but contribute to nearly supply visibility on Supply costs of labour / 15% of total Fresh Inventory levels waste are high waste cost (2019) Chain 2020 Root Not enough Wrong Production Too much Production Cause Production causing leading to waste and timing causing poor Availability and impact on resource on products to be lost sales markdowns poorer quality Benefits Right Availability, at Improved Product Reduction of time, right time. Freshness for effort and resources Customers used to remedy Sales, Waste improvements therefore Profitability increased
The Journey so Far Asda Asda Asda Solution Solution Supply Walmart Walmart Owned Owned launch launch Current UK Chain Project Project Global Project Project 2019 - 2019 - Status Project 2015 2015 Issue 2020 2017 2017 2021 2021 “Why are we spending £1000s on new Rotisserie packaging when our colleagues don’t know how many chickens to cook?” Sean Clarke CEO Asda 2017
The Challenge Asda Supply Chain 2020 People Product Process • Industry recruitment • Sales Variance In-day • Complex Cross Issues around Bakers between areas Functional Project • Technology 3 rd Party • Colleagues alignment • Operational to shape of customer differences between Integration demand Production Areas • Lack of SF devices • Colleagues lack of • Standard Pack Sizes • Inventory Data trust in system • Differing production (different ordering • Retail Vanity times of products methods) • Compliance – what does it measure
Our Solution – How It Works • Production Levels based on Historical data, forecasts and internal levers alongside Asda pack size information. Colleagues scan any carryover into ADC App. • Events are added from Asda Central Supply feed, combined with forecasting Supply completed by ADC. Chain • GRS delivers Fulfilment, FPP delivers Production Planner • Output is a simple Colleague Planner with time buckets across the day. 2020 LEVERS OUTPUT DATA WAREHOUSE INPUT Waste Tolerance Retard Report Daily Data Feed Sales, Waste, GHS Forecast Period Production Plan by Weighting window • 52 Weeks - Sales, Compliance Markdown & ITB Safety Stock Report • Ingredients • Pack sizes Supply Data Feed Min/ Max Qty Production Tracker Cash Impact of Carryover non-compliance
Our Solution – How Colleagues Use Asda Supply Chain 2020 6.30am Colleague prints Markdowns are planner and completed produce Waste End of day throughout the volumes within Carryover processed end day 3 windows scanned on App of day (Bakery & Pizza)
The Results and Lessons Learned Pizza / Bakery Trials 2018 / 2019 Rotisserie FPP chain launch Q3 2019 Asda Waste Reduction % Target Actual Waste Reduction % Target Actual Supply Pizza 9% 13% Rotisserie 13% 18%* Chain Bakery (Cake) 9% 12% *Pre COVID19 Disruption 2020 Positives Leadership focus on previous MVP so not all functionality ‘unfocus’ area available Once forecasting had settled, FPP Middle Management cascaded – showed multiple opportunities should have also been GSM Availability across the day Rota's not in place in all areas Opportunities improved Winning ‘Hearts & Minds’ harder Over achieved against Business than expected Plan waste target Compliance Report not in place
Next Steps Asda Pizza / Supply FPP Rotisserie Bakery Chain • Trial both 2020 • • Re-launch post FPP ownership technical and COVID19 folds into operational • All functionality Category / process (Retail & in place Supply WoW Supply) • • Asda Compliance Metrics fold into • Build feedback Report imminent overall Waste into Planner KRA
Three Discussion Points Asda Question 1: Compliance Reporting Compliance has been difficult to embed on Rotisserie. Reporting could be the key Supply but as sales can fluctuate on an hour by hour basis in Supermarket Retailing and Chain colleagues may feel they need to produce more / less, what metrics should be used? 2020 Question 2: Post-launch Ownership In Asda we have spent a lot of time completing a RACI with Technical, Supply and Commercial Teams on who will own the BAU actions once fully launched. (Levers on system, admin updates etc). What would be your view on where these tasks would be best placed? Question 3: In Store Bakeries With the traditional skillset of Bakers reducing nationally and not having the capacity / equipment to make specialised products customers now expect, we know the industry is moving way from baking all products on premises and using part-baked, third parties to provide these products. What are your long term views on how Supermarket Bakeries will manage customer demand trends in the future?
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