MANAGING E-COMMERCE EXPANSION · MANAGING E-COMMERCE EXPANSION 4/29/2014 ... Fingerhut /Bluestem Brands ... • Designed to measure KPIs over time ...

MANAGING E-COMMERCE

EXPANSION

4/29/2014

Scott Bolduc

Director of Supply Chain Strategy

Introductions

SPS Commerce Overview

B2C process

B2C electronic trading

Implementing partnerships

AGENDA

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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

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SPS COMMERCE (NASDAQ: SPSC)

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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

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

New Distribution Challenges M-Commerce Empowerment

• Ship-to-Consumer

• Ship-to-DC

• Ship-to-Store

• Cross-Dock

• Import

• VMI

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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

KEYS TO E-COMMERCE FULFILLMENT SUCCESS

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E-Commerce can improve inventory management

E-Commerce can grow sales without capital expense

E-Commerce can increase customer loyalty

The “threat” . . .

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E-COMMERCE DRIVERS AND TRENDS

Item setup

Inventory visibility

Order visibility and managing orders

Managing logistics spend

Branding

Finding e-commerce capable vendors

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TOP E-COMMERCE CHALLENGES/REQUIREMENTS

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Item management

Inventory management

Order processing

Order confirmation and correction

Change/cancellation

Order tracking

Billing and payment

management

Return management

ROADMAP TO WORLD-CLASS DROP SHIPPING

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Importance of item information

Attributes

Adds/changes/updates/discontinues

Item master cleansing

Images/digital assets

ITEM MANAGEMENT

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Electronic Data Feed

• EDI/XML

• Clearinghouse

Attributes

• Supplier information

• Product information

• Inventory information

INVENTORY MANAGEMENT

Consumer DC/Warehouse Vendors

Orders

E-COMMERCE – DC/STORE

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Retail Store

Flow

Consumer

DC/Warehouse

Vendors

Orders

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E-COMMERCE – SHIP TO CONSUMER

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Many smaller orders

Multiple Ship To addresses

Customization

Personalization

Shipping and handling fees

PURCHASE ORDERS

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Receipt of orders

Validation of inventory available

Corrections/error notification

Customer notification

ORDER CONFIRMATION AND CORRECTION

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Purchase Order correction

Purchase Order cancellation

Cancellation confirmation

Customer notification

PO CHANGE/CANCELLATION

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Shipment Confirmation

• Many small packages

• Branding

• Customer notification

Transportation

• Shipment status

• Customer notification

PURCHASE ORDER TRACKING

Marketing

Private Labels, Packing Slips, Holiday Messages, Gift Cards, Related Products Literature (enforces branded customer experience)

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THE BRANDED EXPERIENCE

Invoice

• Many small invoices

Remittance

• Many small invoices/documents reported on the

voucher

Debit/Credit

• Adjustments

• Rebates

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BILLING AND PAYMENT

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Return instructions

Return verbiage

Return address

COMMUNICATION OF RETURN METHODS

Physical Returns

• Customer Returns

o Supplier

o Retailer

o 3rd Party Return Center

• Returns from Retailer/3rd Party Return Center to Supplier

Electronic Data Exchange

• Request for a return

• Return Authorization

• Credit for returns

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RETURN PROCESS

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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

SUPPLIER COLLABORATION

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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

TYPES OF EDI TRANSACTIONS

PO Change Acknowledgement (865)

Shipment Confirmation (856)

PO Acknowledgement (855)

Invoice (810)

Vendors

Remittance/Advice (820)

Retailer

PO (850) / PO Change (860)

Inventory (846)

Item Catalog (832)

Shipment Status (214)

Debit/Credit (812)

Return (180)

Carriers

Shipment Status (214)

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TRANSACTION FLOW

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B2C capable partners

Implementing electronic trading

Alternatives to limited electronic

trading capabilities

On-going management of

electronic trading success

IMPLEMENTING PARTNERSHIPS

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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

B2C CAPABLE PARTNERS

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The “legwork” of implementing technology with hundreds of individual companies on an initiative that will cost them time and money

Big

EDI

XML

SME

Mail

Vendors

DSD

Distributors

Carriers

Int’l

10,000’sItems

1000Items

50Items

DomesticShip to DC

Ship to Local

SpreadSheet

100’s of Vendors

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EDI EDI

EDI EDI

IMPLEMENTING ELECTRONIC TRADING

The real integration challenge….

Implementing your partners

• Steps

o Setup

o Testing

• One – one

• Service providers

Implementing Electronic Trading PartnersIMPLEMENTING ELECTRONIC TRADING

PARTNERS

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What happens if they can’t do it (or all of it)

• Eliminate the partnership

• Create a portal

• Exemptions

• SaaS providers

LIMITED TECHNOLOGY

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How to manage and monitor data success

• Management by fire

• In-house systems

• SaaS providers

o Visibility reporting

o Order performance reporting

ON-GOING DATA MANAGEMENT

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ON-TIME SHIPMENTS

ORDERS NOT SHIP

3131

QUESTIONS