EXPANSION Scott Bolduc Director of Supply Chain Strategy 4/29/2014 - PowerPoint PPT Presentation

MANAGING E-COMMERCE EXPANSION Scott Bolduc Director of Supply Chain Strategy 4/29/2014

AGENDA  Introductions  SPS Commerce Overview  B2C process  B2C electronic trading  Implementing partnerships 1

INTRODUCTIONS  Over 25 years of experience with supply chain systems (WMS, ERP, Forecasting, Procurement, Accounting) and EDI  Our Own Hardware (hardware Industry Cooperative/Wholesale/Distributor) 300 suppliers to trade PO, Invoices, Freight Bills  Nash Finch (Grocery Distributor) 200 suppliers to trade Grocery PO and Invoice  Fingerhut /Bluestem Brands(Catalog/Online Retailer) 700 suppliers to trade Warehouse and Direct to Consumer PO, POC, Ship Notices, Invoice, Carrier Shipment Statuses, International Consolidator  Currently the Director of Supply Chain Strategy at SPS Commerce. I have been in this role for over 12 year where I have worked with hundreds of retailers, suppliers, distributors, carriers and Third Party Logistics (3PL) companies to gain new efficiencies in their supply chain 2

SPS COMMERCE (NASDAQ: SPSC) Founded in Minneapolis – 1998  Global Footprint  54 Consecutive Quarters of Growth  52% of the Market - Market Leader  800 + employees   100% Software as a Service (SaaS)  Model 2,700+ Pre-built Integrations  NASDAQ – SPSC  3

2014 = ARE YOU A RETAILER, A SUPPLIER, OR BOTH? • 2013 - we saw a continuation of the multichannel transformation as more suppliers are becoming retailers and retailers are becoming suppliers. What once was very defined is now becoming ONE continuum. • 2014 - Organizations that are nimble and have equally nimble supply chains are capable of creating whole new categories.

RETAIL INDUSTRY TRANSFORMATION E-Commerce Impact Cloud Computing Adoption M-Commerce Empowerment New Distribution Challenges • Ship-to-Consumer • Ship-to-DC • Ship-to-Store • Cross-Dock • Import • VMI 5

KEYS TO E-COMMERCE FULFILLMENT SUCCESS  Determining e-commerce requirements  Managing items and reporting inventory position  Managing e-commerce orders and order changes  Streamlining drop shipping and transportation  Simplifying, managing or automating returns, order tracking and vendor scorecarding 6

E-COMMERCE DRIVERS AND TRENDS  E-Commerce can improve inventory management  E-Commerce can grow sales without capital expense  E-Commerce can increase customer loyalty  The “threat” . . . 7

TOP E-COMMERCE CHALLENGES/REQUIREMENTS  Item setup  Inventory visibility  Order visibility and managing orders  Managing logistics spend  Branding  Finding e-commerce capable vendors 8

ROADMAP TO WORLD-CLASS DROP SHIPPING  Item management  Inventory management  Order processing  Order confirmation and correction  Change/cancellation  Order tracking  Billing and payment management  Return management 9

ITEM MANAGEMENT  Importance of item information  Attributes  Adds/changes/updates/discontinues  Item master cleansing  Images/digital assets 10

INVENTORY MANAGEMENT  Electronic Data Feed • EDI/XML • Clearinghouse  Attributes • Supplier information • Product information • Inventory information 11

E-COMMERCE – DC/STORE Orders Consumer Vendors DC/Warehouse Retail Store 12

E-COMMERCE – SHIP TO CONSUMER Orders DC/Warehouse Consumer Vendors Flow 13

PURCHASE ORDERS  Many smaller orders  Multiple Ship To addresses  Customization  Personalization  Shipping and handling fees 14

ORDER CONFIRMATION AND CORRECTION  Receipt of orders  Validation of inventory available  Corrections/error notification  Customer notification 15

PO CHANGE/CANCELLATION  Purchase Order correction  Purchase Order cancellation  Cancellation confirmation  Customer notification 16

PURCHASE ORDER TRACKING  Shipment Confirmation • Many small packages • Branding • Customer notification  Transportation • Shipment status • Customer notification 17

THE BRANDED EXPERIENCE Marketing Private Labels, Packing Slips, Holiday Messages, Gift Cards, Related Products Literature (enforces branded customer experience) 18

BILLING AND PAYMENT  Invoice • Many small invoices  Remittance • Many small invoices/documents reported on the voucher  Debit/Credit • Adjustments • Rebates 19

COMMUNICATION OF RETURN METHODS Return instructions Return verbiage Return address 20

RETURN PROCESS  Physical Returns • Customer Returns o Supplier o Retailer 3 rd Party Return Center o Returns from Retailer/3 rd Party Return Center to Supplier •  Electronic Data Exchange • Request for a return • Return Authorization • Credit for returns 21

SUPPLIER COLLABORATION  Order performance • Designed to measure KPIs over time – (on-time delivery, order changes, fill-rates, EDI data quality, etc.) • Across dimensions (product, vendor) • Across levels (SKU, product, category)  Supplier scorecarding • Timely shipments • On-time shipments • Fill rate performance • Supplier scorecard 22

TYPES OF EDI TRANSACTIONS  832 Item/Catalog  846 Inventory Availability  850 Purchase Order  855 Purchase Order Acknowledgment  860 Purchase Order Change  865 Purchase Order Change Acknowledgement  856 ASN – Shipment Confirmation  214 Shipment Status Message  810 Invoice  812 Debit/Credit  180 Return Request and Authorization  820 Remittance 23

TRANSACTION FLOW Item Catalog (832) Retailer Vendors Inventory (846) PO (850) / PO Change (860) PO Acknowledgement (855) PO Change Acknowledgement (865) Shipment Confirmation (856) Invoice (810) Return (180) Debit/Credit (812) Shipment Status (214) Remittance/Advice (820) Carriers Shipment Status (214) 24 24

IMPLEMENTING PARTNERSHIPS  B2C capable partners  Implementing electronic trading  Alternatives to limited electronic trading capabilities  On-going management of electronic trading success 25

B2C CAPABLE PARTNERS  Who’s capable of fulfilling orders?  Are they electronically capable?  What are their capabilities?  How do you get these answers?  One-on-one meetings between partners  Conferences  Business social networks 26

IMPLEMENTING ELECTRONIC TRADING 100’s of Vendors XML Big Carriers The real integration challenge…. SME 10,000’s Items Vendors DSD EDI EDI EDI 1000 Distributors Items Spread Mail Sheet 50 EDI EDI Items Int’l Ship to Local Ship to DC Domestic The “legwork” of implementing technology with hundreds of individual companies on an initiative that will cost them time and money 27

IMPLEMENTING ELECTRONIC TRADING Implementing Electronic Trading Partners PARTNERS  Implementing your partners • Steps o Setup o Testing • One – one • Service providers 28

LIMITED TECHNOLOGY  What happens if they can’t do it (or all of it) • Eliminate the partnership • Create a portal • Exemptions • SaaS providers 29

ON-GOING DATA MANAGEMENT  How to manage and monitor data success • Management by fire ORDERS NOT SHIP • In-house systems • SaaS providers o Visibility reporting ON-TIME SHIPMENTS o Order performance reporting 30

QUESTIONS 31 31