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Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

A Royal Occasion

Here at Figure it Out we thoroughly enjoyed the Jubilee weekend, over-indulging in good food and fine English wines whilst huddled under Union Jack umbrellas hoping for a glimpse of the Queen (though the arguably more sensible of us enjoyed it on the TV from the comfort of their living rooms)

Supermarkets must also have enjoyed the Jubilee. Online comparison site moneysupermarket.com had forecast Britons would spend £823m celebrating the Queen's 60 years on the throne – almost double the amount spent during last year's Royal Wedding.

Some key items definitely saw a big boost.  At Marks & Spencer, the week preceding the Jubilee was “an unprecedented week for Champagne and sparkling wine”, said Andrew Bird, head of trading, grocery and drinks. Sales were up by one third on Christmas week. And Tesco also said it was expecting the most profitable couple of days for alcohol sales since the Millennium.

At Waitrose, demand for British favorites such as scotch eggs, sausage rolls and ales to wash down street party festivities helped Waitrose serve up record-breaking sales in the run-up to the Diamond Jubilee. The chain saw total sales jump 19.8% to £123m for the week ending Saturday 2 June - higher than any other trading week in Waitrose’s history with the exception of Christmas and Easter

Party decorations and Union Jacks were also popular, Sainsbury's sold over 364 miles of bunting and 146,000 flags with week-on-week sales of Union Jack cake stands up 2,783 per cent and Union Jack teacups up 5,588 per cent

In order to sell all this party paraphernalia, the supermarkets had to predict the demand and get it all into their shops in time for the Jubilee. They also had to get the amounts right – they may be able to sell off the remaining flags to Olympics supporters in a few weeks, but they wouldn’t want boxes of leftover Jubilee tiaras and crowns.

Supply Chain Analytics can help with this problem; it is the analytical discipline that covers:

  • Analysing the drivers and underlying trends in demand for products and services
  • Building predictive models that enable organisations to effectively manage their supply chain, workforce and finances
  • Using analytics to optimise supply chain strategy -  warehouse design, logistics, merchandising  replenishment and demand planning
For special events, even if you have identified the likely products that will be in demand, it is easy to get amounts wrong. The impact of the royal wedding last year was completely underestimated: Champagne sales rocketed by 28 per cent and even sales of corgis soared by 134 per cent as the royal nuptials captured the spirit of the nation. Building a simulation model and testing a range of scenarios is a safe way to test the possible outcomes.

Beyond planning for known special events, the supply chain can always be thrown by the unexpected. The weekend before the Jubilee had unusually good weather and supermarket shelves were left bare as the UK reveled in the sunshine with impromptu barbeques and parties. Going round my local supermarket on Monday evening, it was a struggle to find enough in stock to see me through the next couple of days, let alone buy up for a big Jubilee celebration. Fortunately supply chain analytics can also help here, providing the understanding of the drivers and process in order to build an adaptive and flexible supply chain. For a large clothing and home wares retailer we used Advanced Predictive Modelling to create a ‘Digital Model Office’ which helped our client understand how best to package stock through its supply chain channels and how to deal with significant peaks and troughs in demand.

 

At the operational level, adaptability is created through modular business processes and capabilities, and through dynamic planning systems that optimise multiple business dimensions such as total cost, inventory, customer satisfaction, and responsiveness. At the execution level, the adaptive supply chain provides an organisation with a sense-and-respond mechanism, allowing it to identify events that go wrong— from materials shortages to plant shutdowns—and react quickly to correct them.

The major supermarkets had the capabilities in place to adapt their ordering and logistics to ensure everything was in place to gain the biggest profits from the Jubilee weekend.

For More Information on Supply Chain Analytics please contact Neal Mistry.

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nmistry-exblogger

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