Learn From Retail Leaders
Supply chain executives will gather next month in Berkeley, Calif., to discuss best practices implemented across retail supply chains to create and enhance the customer experience. The two-day conference will include hands-on experiences as well, including a private tour of the Port of Oakland and an opportunity to board the APL Thailand, a 4800-TEU* container vessel operated by Sacramento, Calif.-based APL.
A global container-transportation company, APL serves more than 90 ports in Asia, Europe, the Middle East and the Americas. During tours of the Port of Oakland’s APL Middle Harbor Terminal and the container ship, attendees of the Supply Chain Summit will witness how goods are being transported to the U.S. from suppliers around the world.
Co-hosted by Chain Store Age and ChainLink Research, Cambridge, Mass., the inaugural Supply Chain Summit will be held June 25-27 at the Claremont Resort and Spa. Speakers and sessions on the agenda include:
Dan Currie, senior VP of global supply chain, Best Buy, will discuss how the leading electronics retailer has utilized RFID in its supply chain to support a strategy of market segmentation by customer personalities, thus improving the customer experience on a granular store-level, and in some cases, item-level basis.
Mike Graham, VP of logistics, Tractor Supply Co., will share how retailers can build flexibility into the supply chain to achieve consistent service levels across a diverse product mix that ranges from tiny quarter-inch bolts to massive farm tractors, while maintaining efficiencies across a fast-growing portfolio of stores throughout multiple regions.
Randy Lewis, Walgreens’ senior VP of distribution and logistics, will present a moving case study of how the drug store chain’s decision to employ disabled workers in its distribution centers has contributed to improved performance.
John Ling, VP of logistics at Crate & Barrel, and a panel of retailers will join moderator Greg Johnsen, executive VP of marketing and sales for GT Nexus, Alameda, Calif., in a discussion of challenges and innovations associated with international trade logistics.
Retailer case studies on the use of item-level RFID tagging will be the focal point of another session, with specific attention on supplier compliance and interaction with the end customer. Phillip Calderbank, director of global marketing, RFID, for Avery-Dennison, Pasadena, Calif., will lead this discussion.
*One twenty-foot equivalent unit (TEU) is equivalent to a 20-ft. ocean container of cargo.
Risk consultants with New York City-based Marsh will lead a session on building a resilient supply chain and mitigating risk. The discussion will address external factors, such as sourcing of raw materials, storage, production, integrated logistics and delivery to the end customer, as well as internal dynamics, such as regional management processes, information flow and store-level operations.
In another RFID-oriented session, Jonathan Golovin, Ph.D, chairman and CEO of Sunnyvale, Calif.-based T3Ci, will report case studies that illustrate improvements in inventory management as learned from RFID analytics.
Additionally, co-host ChainLink Research will deliver results from its recent survey of more than 100 retailers that are using RFID to enhance customer experiences. Milwaukee-based RedPrairie will be on hand to discuss its comprehensive suite of integrated supply chain solutions.
For more information, or to register to attend the Supply Chain Summit, please visit www.csasupplychainsummit.com.
Weekly Retail Fix
THE NEWS: SAM’S REALIGNS STORE-LEVEL MANAGEMENT
BENTONVILLE, ARK. Sam’s Club is changing the management structure in its stores. In the realignment, approximately 250 positions will be eliminated, Wal-Mart Stores announced last week. The company said it’s replacing five lower level management positions at each Sam’s Club location with three new higher level and higher paying assistant manager positions. —
“This is not a cost cutting effort. We expect a slight increase in payroll upon completion of this change,” said Sharon Orlopp, senior vp of Sam’s people division.
THE FIX: Differentiation would better help Sam’s
Since Sam’s decided that its refocus on the business customer was too narrow, it has sought to find ways to make its clubs more attractive to primary shoppers, i.e., women. And that’s a pretty tough row to hoe, as Costco has done a pretty good job at satisfying the club customer in general and BJ’s has been going after female shoppers for several years now, with some success.
Having fewer managers with more direct responsibility could create a tighter knit club-level management and shorten lines of responsibility and accountability. Yet, without differentiating the offering, execution isn’t going to overcome all of Sam’s challenges.
That being said, a store-level management realignment might be overlooked at other retailers, but, this being Wal-Mart, everyone has to make a big deal about it. But that’s the price you pay as the big guy on the block.
Weekly Retail Fix
THE NEWS: TOYS ‘R’ US EARNINGS GAIN 40.1%
WAYNE, N.J. Toys “R” Us today posted net earnings of $199 million for its critical fourth quarter, which meant it turned a profit for the fiscal year ended Feb. 3. But special charges and gains had an impact on its numbers. —
Sales for the previous fiscal annum were $142 million, the difference translating into a net earnings increase of 40.1% year over year. For the last fiscal year, Toys “R” Us posted net earnings of $85 million versus a net loss of $384 million for the previous period.
Operating earnings in the fiscal 2006 fourth quarter gained 53.1% to $571 million versus $373 million for the fourth quarter of fiscal 2005. For the last fiscal year, operating earnings were $649 million versus an operating loss of $142 million for the previous period.
THE FIX: Improved shopper experience ups comps
Of course, any observer has to take into consideration special financial circumstances. Fiscal 2006 operating earnings were positively impacted by $96 million from gains on property sales, slightly offset by restructuring and other charges. In fiscal 2005, operating earnings were negatively impacted by $410 million in costs relating to the merger of the company, as well as $58 million of costs and charges relating to contract settlement fees, restructuring and other charges.
Still, sales were trending up at last year’s end. Net sales gained 15.8% to $5.7 billion. In the full fiscal year, net sales advanced to $13 billion, up 15.2%.
Comparable-store sales for the Toys “R” Us’ U.S. division gained 0.6% in fiscal 2006, and that represents the division’s first comps increase in six years. Comps at Babies “R” Us were up 4.8% and those at Toys “R” Us international were up 2.6% for the fiscal year.
Jerry Storch, chairman and ceo of Toys “R” Us, said the company is “pleased with the strides we made in fiscal 2006 to improve at all levels of the organization and reposition the company for profitable growth over the long term.”
He said the company’s new management team has been focusing on executing a strategy that would turn the retailer into a global toy and baby products authority.
“This translated into higher overall sales, positive comparable-store sales, improved gross margins and strong operating earnings growth for the 2006 fiscal year,” Storch asserted. “The key to our strategy has been improving the customer shopping experience in our stores. We are accomplishing this by delivering a more compelling merchandise selection, better service and a cleaner and more comfortable shopping environment.”