"Space Planning is the core application," says Dan Desmarais, JDA's vice president of category management solutions. "There are three phases of space management. The first is the planogram, which basically shows the display. The second phase is when you add images to it, or make it three-dimensional. Manufacturers will use the 3-D model to present to retailers what they want to sell on an end cap, for example, and retailers will use it to communicate to the store what should actually be merchandised.
"The third phase, where CSAB is at, is when you add financials to a planogram and start to understand the days of supply and target inventory and balancing the space to make it the most efficient-efficient being defined by whatever you want," says Desmarais. "Do you want to maximize days of supply or are you maximizing profitability, or turns, or units? Those can be different measures and targets by sub-segments of product."
The JDA Space Automation is a scripting tool that enables users to automate day-to-day activities performed within Space Planning. It uses the same terminology as other space management applications, making scripting easy to learn and understand. It can combine repetitive tasks to eliminate error and ensure data consistency. The application allows users to perform large-scale batch processing and complete tasks while they're away from the computer.
The solution has helped manufacturers and retailers achieve demand-based precision merchandising, which maximizes category and overall profitability and sales per square foot.
In 2005, using Space Planning and Space Automation, CSAB was able to save 79 minutes per planogram over an 11-week period with a team of 10 personnel. In 2006, the company was able to reduce the time to 12 minutes per planogram over a seven week period with two people.
"With the automation of more tasks, we improved our process per planogram," says Hodnett. "This directly contributed to our increased efficiency, productivity and reduction in man hours."
Over a three year period, the retailer's total CSD dollar sales has grown 27 percent and baseline sales by 36 percent. For CSAB, CSD dollars sales growth was 66 percent and baselines sales growth was 75 percent.
"We squeezed out every bit of automation out of the project," Hodnett adds. "The entire category experienced double-digit growth, including Coke and Pepsi. The account was ecstatic to have that kind of productivity."
Taking It Up A Notch
A good category management manufacturer will sit down with the retailer and decide what the inventory model will be, says Desmarais.
"What are the rules and regulations? Is it different by distribution center, is it different by store? A lot of beverage producers are DSD (direct store delivery) and that makes their life a little bit easier. They can set the days of supply themselves," he says. "They really have to work with the retailers to come to an understanding as to what they're going to do."
CSAB was one of the first manufacturers to use automated planogramming, says Desmarais. "One of the biggest advantages of this product is it allows the retailers to change the planogram enough to create excitement in the category, yet not to confuse the consumers."
Recently, CSAB was contacted by one of its largest retail customers to conduct store-specific planograms for its Texas locations. The company and JDA put together templates capable of mass producing accurate, store-specific programs. Collaborating with JDA, the company learned to incorporate JDA's Intactix Knowledge Base and Space Automation in several phases of the process, allowing the tools to do the work.
Intactix Knowledge Base is an integrated data warehouse that can store merchandise data and manage key business objectives over time. "You can load a list of all of your stores, or load POS data from a retailer and get that information right into the planograms. The big advantage with this product is it creates one record of a product," says Desmarais.
"When you work in a flat file planogram world and you're saving files to network drives or laptops, you can have a different description in every one of those planograms. You can have different manufacturing segment and sub-segment data for every product," he says. "That means that when you put them together, you can't analyze them-you can't look at your share of shelf with one retailer vs. another. Once you put it into a single database, the data is consistent.