CPGmatters: Kimberly-Clark Leverages POS Data to Help Food Lion Reduce Out of Stocks
Through a special arrangement, presented here for discussion is an excerpt of a current article from the monthly e-zine, CPGmatters.
When Food Lion started sharing POS data under its Vendor Pulse initiative in December 2006, Kimberly-Clark jumped on the opportunity. However, the initial enthusiasm quickly turned into a major headache. K-C sells more than 250 products at 1,300 Food Lion stores, which meant that every day it had to handle well over 300,000 data points; the sales and stock of each product in every store, every day.
"It very quickly became overwhelming. We felt we were trying to drink from a fire hose," explained Gary Hall, a business analyst at Kimberly-Clark in the personal care category. "We tried to build an internal solution using a standard database tool, but it simply did not work. Not only did we struggle with scalability issues, but we also needed to cleanse and load the data ourselves, and we discovered it certainly was not trivial."
Upon trying to reconcile this data with the syndicated data, K-C identified major discrepancies, and several reports which were run on their internal database did not provide the expected results
In June 2008, Food Lion selected Retail Solutions Demand Signal Management to power its Vendor Pulse program, and Kimberly-Clark quickly signed on with Retail Solutions by July. Retail Solutions DSM is a fully managed service which resolves the issue of data cleansing, harmonization, loading and storage for the suppliers participating to the Vendor Pulse program, while providing business-focused reports that enable every type of user to intuitively navigate the data.
Kimberly-Clark is now looking at out-of-stocks of all its products, category by category. It is running reports to see which products are not selling for abnormal periods of times in stores where they are authorized. By matching this analysis with shipment data, Kimberly-Clark then can address the distribution voids occurring when items are not shipped to authorized stores. On one particular item, for instance, they found 70 stores which should have had the product in stock, but did not.
When the out-of-stock seems to have its root cause in the store, K-C could now instruct a merchandiser to check a list of items during their visits systematically and on a recurring basis.
"The most important thing though, is that the Retail Solutions tool is pervasive," said Greg Pike, who leads customer development for Delhaize USA, Food Lion's parent. "It crosses boundaries, and is used by all the functions we leverage to serve Food Lion more effectively. I look at it at the top level, but supply chain analyzes availability in each store and service levels in each warehouse, marketing optimizes promotion design for each event, sales drive better execution from every resource, merchandising determines which planogram drives the highest sales in each store - all of this without asking for any more resources from Food Lion."
Discussion Question: What do you think are the particular hurdles for vendors in sharing and capitalizing on POS data from retailers? What solutions have you seen work to handle the data overload?