The objective of Integrated Planning & Execution (IP&E) is to join the functions from end to end. Only by doing so does it become possible to plan the business, including the movement of stocks, strategically.

In this section:

• Benefits of Integrated Planning & Execution
• Capgemini’s approach
• Capgemini’s capabilities
• Success stories

Benefits of Integrated Planning & Execution

With IP&E, everyone in the business can see, and act on, the same stock information at the same time. This makes it possible to achieve optimal availability with the lowest possible level of inventory, keeping tight control of working capital and the supply chain. We find that retailers can increase inventory turns dramatically by adopting this approach.

The end result is more sales – as much as 15% more  because customers find their preferred products prominently displayed and in adequate quantities. Transport costs can also be reduced as a result of better capacity management and consolidation of requirements. You can use consistent KPIs to monitor activity across all categories and channels because sales, margin and inventory targets become standardised.
IP&E also makes the supply chain greener, because it eliminates unnecessary stock holdings and unnecessary movement of goods.

Capgemini’s approach

The principle of IP&E is to link overall strategy to physical stock movements. This essentially means joining up three elements: retail planning, inventory management and physical distribution (the execution part).

This is a complex task for retailers, not least because of the different measurements used by different functions. Financial and range plans tend to be done in terms of currency, whereas inventory and merchandise planning is done in terms of volumes and units. Using averages to convert from currency to units, as most retailers do, is all very well until the product range changes significantly, but when it does change the conversion will no longer give you realistic projections. This applies not only to obvious changes, like switching from selling iPods to selling plasma screens, but also to apparel.

Capgemini has tackled these problems many times before and knows how to structure the data to allow the output of one plan to be used meaningfully as input to the next. An IP&E exercise begins with an end-to-end assessment of the situation to build a business case for change. Areas we look at include everything from space allocation to promotions and demand forecasting.

The ultimate solution that we’ll recommend depends on retailers’ individual needs and starting point. Very often it involves making point investments in technology, people and/or processes to create the necessary connections. Sometimes, the better option is wholesale replacement of retail ERP systems.

Either way, our emphasis is on joining up processes, without necessarily reorganising the company – there will always be an element of managing the matrix. The outcome is an inventory management approach that copes with both “push” (from new season’s products) and “pull” (from customers’ demands for continuity of supply).

We help you work out how to deploy a single inventory pool efficiently across your different channels and locations. Any capacity issues in the supply base get resolved so that stock moves smoothly through the supply chain to where it needs to be.

Capgemini’s capabilities

We have a global team of over 500 retail specialists who understand these processes from end to end, and further specialists within the key areas of range and space, demand forecasting and physical distribution (warehousing and transport). Where the analytical challenges are significant, Capgemini has a team of Operational Research consultants who can find innovative ways around the problem.

Success stories

Specialty retailer

This multi-billion-dollar retailer’s operating structure was “brand siloed”, with significant duplication of cost and capital structure. It had been unable to develop the necessary level of capability excellence within each silo to service its growth ambitions, both within each brand and across the organisation as a whole. Capgemini has helped to develop a new core operating model incorporating processes and capabilities to support all the brands; a greater focus on capability, and a common technology platform for the entire enterprise. Now in rollout, the project is expected to decrease out-of-stocks and inventory levels while providing a range of other benefits including sophisticated demand forecasting for initial allocations, consumer-driven replenishment and optimised promotions.