Not for distribution André N. Verdier

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André N. Verdier
Distribution and Retail Strategies in a Recession Economy a Supply Chain view.
How to deal with slowing demand in an FMCG Distribution environment. What is the
importance of Supply Chain Management to cope with recession times.
A case study in the Telecoms Industry.
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André N. Verdier
The i2 Group of companies
Conceived as Itsalat International in 1993, we began our corporate journey
as an independent retailer of mobile communications in the MENA Region;
Itsalat International re-branded in 2005 bringing
to the market;
Today, the company is the largest distributor of mobile devices in the Middle
East and Africa, backed by an extensive retail network;
i2 products and services now reach customers in 22 countries through
over 340 retail stores and 25 000 POS;
Currently, i2 functions as a total communications service provider, active as
wholesaler, distributor, retailer and content Provider;
Strong & exclusive distribution partnership with Nokia. i2 has developed a
solid distribution network and a well structured logistics operation in the
region.
brands are a.o. Allied Telecom,
,
,
, Unicom,
and
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André N. Verdier
i2 in numbers
Connections
Countries:
22
Retail Stores:
341
POS:
25,000
655.9
700
Volume Mio
600
Handsets
500
400
300
200
69.3
100
15.6
16.0
Volume Mio
2007
12.3
14.0
0
2008
12.0
10.0
6.6
8.0
6.0
Warehouses: 21
Branches:
21
Sales Vans: 115
4.4
4.0
2.0
0.0
2005
2006
2007
2008
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André N. Verdier
The effect of the Worldwide economy
World Wide Mobile connections
"The telecoms sector compared with others
such as the automobile industry or finance,
is nevertheless
better protected, notably because of the
need to renew handsets and monthly
subscription payments
that generate steady income”
‘’A combination of weak end-user demand, currency
volatility, and limited credit availability prevented the
market from experiencing the usual seasonal
increase in shipments. We expect the first half of
2009 to be very challenging as vendors and
distributors grapple with clearing inventory. Should
these conditions persist, the mobile phone market
may not recover until later this year, and possibly not
until 2010'’
The most recent market
forecasts anticipate a growth
of -8.3% for the year 2009
In the fourth quarter of 2008
shipments fell 11.6% year
over year
Ramon Llamas, senior research analyst IDC
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In-sourced
Distribution
Forecasting
Retail
Warehousing
Warehousing
Planning
Van Sales
Inventory
Management
Value Add
Services
Procurement
Customs
Clearance
Supplier(s)
Customers/Consumers
Supply Chain Model
Inbound
Shipment
Out-sourced
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André N. Verdier
Investment
Human
Capital
Process
&
Systems
Network & Infrastructure
Training & Development
ERP
Technology
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Inventory optimization
Reduce inventory?
Phase One
Analyse historic data to determine optimum
inventory levels
Balance stock vs service levels required
Phase Two
Operational management
Direct supplier management
Forecast & demand planning
Frequent stock level analysis (80:20 rule)
Improve product availability?
Key benefits
Improved availability
Reduced capital/balance sheet
Optimised warehouse size
Minimises obsolete stock
Improved forecasting
Reduces administration
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Divestment
Planning & Procurement
Warehousing
Branches
Centralization
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Divestment
In-source:
•
Customer ownership
•
Planning
•
Procurement & Supplier Management
•
Supply Chain Management
Out-source:
Non value add
Transportation
Customs Clearance
Warehousing
Out-Sourcing vs In-Sourcing
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Collaboration
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Supplier Collaboration
Weekly
Collaborative
Planning Guide
Agreed
Quarterly
Game Plan
13 Weeks
Rolling
Forecast
Updated Order
Book
Monday:
CPT Update
Tuesday:
Collaborative
Planning
Meeting
Wednesday:
i2 Internal
Alignment
& Order
Placement
Defined Forecast Horizon, Tight Communication Lines
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Supply Chain Management
Supply Chain Management is planning
Design of the supply chain
Anticipation of demand
Planning of production and logistics to meet demand
Supply Chain Management is execution
Making accurate and reliable delivery promises to
customers
Fulfilling on those promises while maximizing profits
End-to-end visibility to enhance supply chain velocity
Supply Chain Management = Planning + Execution
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Conclusions
The scalable, versatile Supply Chain
Simplicity
Out-source non-core, In-source core
activities
Invest in Human Capital
Invest in Value Add Technology
Collaborate with Customers and Suppliers
Supply Chain = Planning and Execution
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André N. Verdier
Thank you
‫شكرا لك‬
Kiitos
Gratias
Danke Schon
Merci
Obrigado
Dank u
谢谢您
धन्यवाद
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André N. Verdier