Strategies for Mobile DSD and Impacting the Physical to Digital Product Journey

Strategies for Mobile DSD and Impacting
 the Physical to Digital Product Journey

Agenda

    Introduction
    Things you may not know about Dr Pepper Snapple
    Direct Store Delivery Defined
    DSD generates value for all
    Mobile DSD – DPS Style
    2nd Generation - Ante for the game
    Capability: Must Haves
    3rd Generation Strategy: Changing the game
    Lessons Learned – So Far!
    Conclusion

2

Things you may not know
                                                    about Dr Pepper Snapple Group

              Dr Pepper Snapple Group, Inc. has a brand heritage spanning more
              than 200 years
              #1 in all the major flavor categories in which it competes
              Employs ~20,000 people. ~7,000 Mobile Workers
              Based in Plano, Texas
              Operations in US, Canada and Mexico
              24 bottling and manufacturing facilities
              Operates more than 200 distribution centers.
              2011 revenues of $5.9 billion (+5%)
              IT Infrastructure and Applications Management are outsourced

                                                           Explore our fun and flavorful world.
Source: 1.Beverage Digest 2009. 2.Nielsen F/D/M/C 2010 Dollar Share.

Why DPS FLAVORED CSDs Matter?

               DPS is #1 in delivering CSD flavor brands that consumers love

             Flavored CSD Mix
                                                                          #1 in Pepper
       The Top 6 flavors = 86% volume
100%

90%
                         14%                                              #1 and #2 in Orange
                         7%
80%
                         7%
70%                      9%
                                                       AO Flavored CSDs   #1 in Rootbeer
                                                       Gingerale
60%
                                                       Rootbeer
                         18%
50%                                                    Orange             #1 and #2 in Ginger Ale
                                                       Pepper
40%
                         20%                           Lemon/Lime
30%                                                    Citrus
                                                                          #2 in Lemon/Lime
20%
                         25%                                              Gaining Share and
10%
                                                                          targeting Teens
 0%
                     L52wks 2011

           Source: Nielsen Scantrack, L52wks 4/23/2011, Total US FDMCx

Direct Store Delivery (DSD) Defined

DSD is an alternative to to centralized distribution
Product is taken from the plant to the retailer directly
Used extensively for high velocity or fresh products such as milk,
bread and, of course, soft drinks
DSD is also used for full truckload orders where bypassing
distribution centers makes economic sense
DSD is also a favored approach when there is a strong requirement
for supplier knowledge or service
To quote Mark Twain, with some license, “The rumors of my [DSD]
death have been greatly exaggerated”

DSD generates
                                     value for all

    DSD increases the efficiency of innovations and new product
    introductions
     Manufacturers get more efficiency to their product innovation and new product
      introduction processes.
     According to the GMA 70% of most successful product introductions in North America
      are distributed via DSD

    DSD allows direct access to customers/consumers
       Get product-consumer-interface point of sale information regularly
       Respond faster to trends
       Allows easy localization of merchandise mix
       Can respond to local events automatically if on broadband

6

DSD generates
                                    value for all

    Sales & Marketing benefits for ALL!
       Market opportunity reaction time is shortened
       Eliminates out of stocks in the visual merchandise
       Information gathering for consumer impressions and driving innovation
       Merchandizing, stocking, placement & positioning
       Category management

    Retailers like the Logistics and Merchandising benefits
       Retailers do not have to worry about warehousing product
       Retailers can eliminate the need for certain perishables in the DC
       Reduces out of stocks by quicker responsiveness to demand
       DSD companies also merchandise/stock the shelves; build displays
       The distribution process is accelerated
       Overall supply chain inventory is reduced

7

Mobile DSD – DPS Style

                                                                                                                         Order
                                   Sales
                                                                                                                         Transmitted
                              1    Person
                                                                                                                         to Dispatcher
                                   arrives at                                                                        2
                                   store and
                                   takes order
                                                                                                                                         Process continues through
                                                                                                                                         the day till a designated
                                                                                                                                3        ‘Order Cut-Off’ time at the
                                                                                                                                         location. Warehouse can
    8                                                                                                                                    start building orders.
        Next Day the Delivery Driver                                     9   Arriving at the store the driver will
        meets with a supervisor to                                           print a pick ticket, load his dolly,
        verify the load with a                                               check in with the manager, perfect                     4
        supervisor and leaves on his                                         the invoice, stock the shelf, print a
        route                                                                customer invoice copy, capture                         Orders to
                                                                             signature and proof of delivery.                       Routing

                                                                                         Dispatcher
                                                    6                             5      Adjust routes if
10                                               Dispatcher will                         necessary.                  Dynamic
                                                 palletize the orders                                                                           Route Manager
                                                                                                                      Routing
                                                 and provide
    Upon return, the driver counts the
                                                 paperwork to the
    remaining inventory and enters the
                                                 pickers for build the
    quantities into the hand held. A                                                                                                                 Invoice/order
    supervisor will validate the driver
                                                 pallets and load                            7
                                                 documents for the                                                                                    is sent to ERP
    counts and enter the final counts into                                            Orders for a truck
                                                 loaders to load the
    the hand held.                                                                    are picked and                                                   11
                                                 product.
                                                                                      loaded                                            ERP
    Driver will then run a series of reports
    that will summarize his day from an
    inventory and a cash perspective. He
    turns in those reports along with any
    cash to a cashier at the location for
    compliance.
8

2nd Generation Strategy:
                             Ante for the Game

    Wait…what about 1st Generation? Can I tell you some stories!
    Evaluate, design, and deploy a new selling and delivering solution
     Get off paper
     Decommission older ERPs
    Position for bottler acquisition integration (DPS specific)
    Simplify landscape and reduce the ERP sprawl
    Target end state
       one ERP
       one mobile order management system
       one “perfect” invoice for the customer
       one route optimization system
       one EDI system
       Wireless, secure, manageable, company provided & BYO Devices*

9

Capability Must Haves

     Provide a reliable sales and delivery solution
     Increase sales
     Ensure timely delivery
     Increase warehouse efficiency
     Improve truck loading accuracy
     Drive greater customer and employee satisfaction
     Deploy proven, scalable and modern technology
     Technology capable of working into the future

10

Other Expectations

     Accurate invoices and proof of delivery
     Real-Time Orders, Price, Inventory and Customer Master Updates
     Customer Impacting Selling Tools
     Wireless Communications from anywhere at anytime
     Open Ended Architecture and Development Platform
     Accurate Load-Out and Check-In Procedures
     Improved Cashiering and Route Reconciliation
     Efficient Routing, Truck Loading and Route Tracking
     Paper Reduction

11

3rd Generation Strategy:
                    Changing the game

Migrate team to a consultative sales approach that will drive top-
line revenue growth and benefit the retailer
Arm the sales force with new tools and technology that leverage
tablet screens and displays more decision info
Address end-of-life technology and plan more refreshes
Adopt the “BYOD” approach to devices so sales force can choose
what makes them most productive
Connect to the supply chain so that sales in the field can feed
plans, production and logistics to prevent stock outs and shelf
voids
Provide real time data on what’s happening in the store for agile
reaction and retailer feedback adjustments

Lessons Learned for
                     Mobile DSD and all Mobile

Try not to do everything at once!
You must establish corporate mobility policy
Users are bringing their own. Better deploy a mobile device
management solution
Start with giving everyone e-mail access and chat and watch your
email volume tank!
Create a strategy for enterprise applications
   MEAP
   Purpose Driven
   HTML5
   Ap Store????
Pick an experienced partner who knows your business!
Deploy applications

DSD: Critical Success Factors

     Value comes with a commitment to IT, DSD and Retailer
      Watch out: prepare all partners for the changes
      Changes will be both technical capability and staff shift/increase will occur in certain areas
     Meaningful reduction in distribution cost will be offset by the need
     for better IT-support (can’t directly pass to retailer)
      DSD becomes most evident in the route prep & physical distribution
      Retail companies look for better supplier communication capabilities for their planning
          DEX, ASN or other advanced notice systems
          Confidence the DSD company can execute what it promised
     Centralize, Centralize, Centralize – ERP Convergence
     Handhelds, Handhelds, Handhelds – Single Route Accounting
     Execute, Execute, Execute – Selling tools must be compelling an
     robust

14

QUESTIONS?

     Are you a BYOD company?

15

Must see video
SNAPPLE
http://www.youtube.com/watch?v=Vs936V
NkaS4&feature=related
SUNDROP
http://www.youtube.com/watch?v=ZXyMB7
BKPqo&feature=relmfu