As pressures grow for leaner retail organizations, improved margins and focus on core product mix -- Scan based trading (SBT) is growing fast in popularity as a means to reducing costs and increasing working capital + margins.
2. Is This Familiar?
“We are operating with restricted cash flow “We are often out of stock and losing
and low inventory turns is not helping the sales on high turn SKUs”
challenge”
“Our Return to Vendor activity
“Shrink remains a challenge for us and continues to trend high, wasting
is costing us margin” valuable store labour”
“Our current direct-store-delivery processes
are delaying goods to the floor and creating “ Our invoice match process is often
a competitive disadvantage” flawed with costly discrepancies”
SIMPLIFY - INTEGRATE - ELIMINATE 2
3. What is Scan Based Trading
Scan based trading (SBT) is a commerce
model where the supplier owns the
inventory until it scans at the point of sale.
Fastest growing trend within retail supply chain.
Significant financial and operational benefits to retailers.
Within Canada, over 7 major retailers have moved ahead aggressively with SBT in
categories that include music, games, DVD, newspaper, magazines, confectionary
and seasonal. Over 10 retailers on SBT by 2012 and growing.
3
SIMPLIFY - INTEGRATE - ELIMINATE
4. Traditional Retail vs. SBT
POS Data
Scan
Based
Trading Store/SKU
POS Data
Supplier
Direct-Store-Delivery
Supplier’s Replenishment Plan
5
SIMPLIFY - INTEGRATE - ELIMINATE
5. Benefits from SBT
• Shorter Cash-conversion cycle (increase working capital)
• Inventory “off the books” (reduce carrying costs)
To Finance • Eliminate invoice processing 50%-70% reduction in Invoice adjustments
• Improved in-store merchandising/plan-o-gram compliance
• Reduced labour cost for receiving/returning
To Operations • Shrink reduction 20%-40% labour reduction
• In-stock improvement
• Sales lift (reduced lost sales) 5%-20% lift in sales
• Margin gain 40%-60% reduction in Shrink
To Product
• Reduced Safety Stock needs
• Reduced returns
To Supplier
• Faster payment
SIMPLIFY - INTEGRATE - ELIMINATE 6
6. What do you need for SBT?
MAJOR CONSIDERATIONS
Technology & Data Management– EDI &
Reporting
Willingness of vendor (engagement)
Modified head-office & store processes
7
SIMPLIFY - INTEGRATE - ELIMINATE
7. How can SPICE help
Turnkey
initiation and
execution of
SBT-IN-A-BOX
SBT program
8
SIMPLIFY - INTEGRATE - ELIMINATE
8. SPICE SPICE RETAILER
1. SBT Program 1. Change Management
Development (SBT (Operations, Finance, LP)
Playbook)
2. Project Management Runs
2. EDI Technology &
Supplier Integration 3. “Value Engineering” – SBT Program
ensuring delivery of SBT
3. Supplier Negotiations business case
Initiate Rollout Operate
Your footer Your logo
9. Call Us Next Steps
1. One and half hour meeting
To find out more ….. to learn more.
2. Follow up 1 day free
assessment and proposal
Agenda
Learn in more detail what
SBT can do for you
Place your
We are interested ... logo
1) Can SBT work for me?
2) How do I get suppliers www.spiceTG.com
engaged? 2425 Matheon Blvd. E
3) What are my expected 8th Floor
costs, risks and
Mississauga, ON L4W 5K4
benefits?
4) How can I get started?
5) How can SPICE help?
