X5 Corporate Center · RUS:X5
X5 Corporate Center — X5 Retail Group — X5 Russian Retail Days 2009
14 slides from X5 Corporate Center's conference presentation, Oct 20, 2009
Slide 1: Operational Excellence: Supply Chain Efficiency
Operational Excellence: Supply Chain Efficiency Dmitry Ishevskiy Logistics & Supply Chain Director X5 Russian Retail Days 20 October 2009, Moscow p. 1
Slide 2: Disclaimer
Disclaimer This presentation does not constitute or form part of and should not be construed as an advertisement of securities, an offer or invitation to sell or issue or the solicitation of an offer to buy or acquire or subscribe for securities of X5 Retail Group N.V. or any of its subsidiaries or
Slide 3: Efficient Supply Chain Management: Key Objectives
Efficient Supply Chain Management Key Objectives Improve Service Level and Availability to Drive Sales Improve Product Quality Controls to Strengthen Customer Loyalty Further Improve Purchasing Terms to Enhance Price Leadership Improve Inventory Turnover to Maximize Cash Flows Reduce Shrinkage to En
Slide 4: Strategic Approach
Strategic Approach Creation of a Fully Integrated & Efficient Supply Chain Purchasing/ Optimal Warehouse Efficient Efficient Sourcing DC Network Productivity Transportation In-Store Structure Logistics Areas of Focus • Assortment • Optimization of DC • Warehouse • Fleet utilization • In-store proces
Slide 5: Optimal DC Network Structure
Optimal DC Network Structure Regional DC Coverage Has Been Substantially Improved… Fruit & DC locations as at Region # of DCs 000 sq. m. Dry Veg Fresh Frozen Non-Food 30 September 2009 Central 8 153.9 v v v v v North-West 5 55.2 v v v v Volgo-Vyatsky 1 17.5 v v v Urals 4 18.8 v v v Centralno-Chernoz
Slide 6: Optimal DC Network Structure: Supply Centralization
Optimal DC Network Structure …Improving Supply Centralization Levels for every Region and Format Supply Centralization by Region Supply Centralization by Format Sep-08 Sep-09 Sep-08 Sep-09 74% 75% 62% 62% 62% 60% 58% 54% 52% 45% 43% 42% 41% 35% 40% 28% 27% 19% 5% 1% 1% 1% Discounters Supermarkets Hy
Slide 7: First National Non-Food DC
First National Non-Food DC Servicing Increased Non-Food Needs. Case Study Key Deliveries • Non-food supply centralization level to reach 46% in 2010 • Non-food sales volumes for goods that go through DC surged 150% • Direct contracts with non-food suppliers – Purchasing terms improved on average by
Slide 8: Target Supply Centralization Level for 2013 is 84%
Optimal DC Network Structure Target Supply Centralization Level for 2013 is 84% Supply Centralization and Warehouse Space Growth 84% Supply Centralization, % Warehouse space, th.sq.m. 74% 59% 61% 52% 53% 48% 144 189 191 228 293 FY 2007 H1 2008 FY 2008 H1 2009 2009E 2010E 2011E 2012E 2013E p. 8
Slide 9: Optimal DC Network Structure
Optimal DC Network Structure B. Determine target DC network А. Determine target flow types for suppliers in 2013 structure A Central Regional B cross-docking warehouse facility Central Regional C cross-docking cross-docking facility facility Suppliers Stores Regional D warehouse Regional E cross-doc
Slide 10: Better Warehouse Productivity
Better Warehouse Productivity… … through Upgrade of IT Systems and Modern Technologies Utilization • Better control over movement & storage of • 13 DCs operate with Warehouse goods within a warehouse Exceed (seven switched Management • Processing of associated transactions, to Exceed this year) Syst
Slide 11: Efficient Transportation
Efficient Transportation… …through Optimal Fleet Utilization, Modern Technologies and Alternative Transportation Means • Cost balance between own fleet (500 trucks) & • No trucks purchases in 2009 Optimal third party services • Benefits from reduced third- Fleet • Tachogram control system (prior to
Slide 12: Efficient In-Store Logistics
Efficient In-Store Logistics… …through In-Store Processes Improvement Delivery management Personnel education Stock optimization Optimization of warehouse space p. 12
Slide 13: Supply Chain - Determined to Deliver!
Supply Chain - Determined to Deliver! Customer Operating Working Loyalty and Costs Capital Targeted Improvements by 2013 Sales Growth Optimization Improvement Product availability improvement from current 85% to 95% 9 9 9 Supply centralization increase from current 59% to 84% 9 Improved product qual
Slide 14: Thank You!
YX5RETAILGROUP THANK YOU! @ z p.14