Notes

Outline

Bob Drury Sr. VP Logistics, Manufacturing, & IT Schnuck Markets

"Regional," Regional, Self-Distributing Supermarket Chain Owned & Operated by the Schnuck Family 92 Stores in Missouri, Illinois, and Indiana

Data Driven Supply Chains of the New Millennium

OR, What Mama Never Told You About Doing Business on the Web

OR, How to become a Bazillionaire Using Stuff You Just Learned If You Were Paying Attention Bob Drury Schnuck Markets Inc.

Pop Quiz How Old is eCommerce on the WWW?

How Old is Electronic Commerce on the WWW? 1971 1976 1980 1991 1993

1969 Department of Defense Contracts with a Team of Business, Academic, and Government Researchers to Build ARPANET Four Sites Connected - UCLA, SRI, UCSB, and University of Utah Network Working Group formed to develop Communications Protocols Apollo 11 Mission Lands on the Moon

Bell 103 Modem

1971 ARPANET (Advanced Research Project Agency Network) Grows to 15 Sites and 23 Hosts FTP and TELNET Protocols Defined by Network Working Group Ray Tomlinson of BBN invents email program to send messages across a distributed network.

How Al Gore Became the Father of the Internet Tipper Gore:       "When my husband Vice President Gore served in the House of Representatives, he coined the phrase "information superhighway" to describe how this exciting new medium would one day transport us all. Al Gore represented Tennessee for eight years in the U.S. House of Representatives (1977-1985)

1976 Elizabeth II, Queen of the United Kingdom, is first politician to send out an Internet e-mail

1980 Tim Berners-Lee Writes Program “Enquire-Within-Upon-Everything”, which allows bi-directional links between arbitrary nodes.

1983 Domain Name System server developed at U of Wisconsin, no longer requiring users to know the exact path to other systems. TCP/IP becomes Internet Standard Berkeley UNIX is developed for small computers

Bell 212A Modem

1989 Tim Berners-Lee Proposes Global Hypertext Document Sharing Project Project is named World Wide Web over Information Mesh, Information Mine, & Mine of Information.

1991 CERN Releases WWW Hypertext Technology and Line Mode Browser on Internet Commercial Use of Internet Approved by National Science Foundation

V.32bis Modem

1993  InterNIC created by National Science Foundation to provide: directory and database services registration services US White House comes on-line as WWW.WHITEHOUSE.GOV

1993 Mosaic Browser released by National Center for SuperComputer Applications at University of Illinois First Browser to offer Color Image Support

1994

V.34 Modem

Number of Commercial WEB Servers

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You Know Your Web Site is in Trouble If: Marketing Got it for Free The CEO’s Greeting Doesn’t Work The Host Computer Will Fit in Your Briefcase A Security Key is Something That Starts Your Car Your Internet Provider Goes Bankrupt

5 Reasons To Build a Commercial Web Site Fastest Growing Consumer Media in Human History If We Don’t the Other Guy Will Remodeling Is Easy in a Virtual Store

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Volume Drivers of the Internet Grocery Shopping Industry Convenience Response Time Simplicity Solutions Personalization Information Content Value

Pop Quiz What 17th Century Scientist Discovered the Reasons for the Failure of eCommerce in 2001?

Sir Isaac Newton (1642-1727) formulated laws of universal gravitation and motion—laws that explain how objects move on Earth as well as through the heavens established the modern study of optics         or the behavior of light—and built the first reflecting telescope His mathematical insights led him to invent the area of mathematics called calculus

Moving Products is Expensive

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Volume Drivers of the Internet Grocery Shopping Industry Convenience Response Time Simplicity Solutions Personalization Information Content Value NO NO NO NO Yes Yes NO

Traditional Volume Drivers of the Retail Grocery Industry Location, Location, Location Price Assortment Newspaper Ad Coupons

The Winners Must Do Both Convenience Response Time Simplicity Solutions Personalization Information Content Value Location, Location, Location Price Assortment Newspaper Ad Coupons

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Bar Code Technology (circa 1973)

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ePC & Smart Objects

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Inlay 2D, Square Dimensions  4 x 4 inches x 12 mils thick Frequency  UHF band, 902-928 MHz Power Source  Tag powered from the reader signal (battery free) Read Distance  Up to 20 feet with General Purpose Antenna Memory  80 bits that provide a unique factory programmed ID, plus CRC check. Simultaneous ID  Up to 200 tags/second

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Next Generation of Self Checkout

Retailer Strategic Tradeoff’s Space Allocation Variety Price Gross Profit Labor Service Inventory Investment Out of Stocks

Out of Stocks Industry Averages: 8% of Gross Sales 3% Actual Lost Sales

Out of Stocks Industry Averages: 8% of Gross Sales 3% Actual Lost Sales Why? DSD Receiving Windows

Out of Stocks Industry Averages: 8% of Gross Sales 3% Actual Lost Sales Why? DSD Receiving Windows Inventory Investment Constraints

Out of Stocks Industry Averages: 8% of Gross Sales 3% Actual Lost Sales Why? DSD Receiving Windows Inventory Investment Constraints Forecasted Replenishment Based on Shelf Conditions instead of Consumer Sales

Out of Stocks

Professor Don Bowersox Law of Sales Forecasting There are Two Types of Organizations that Do Sales Forecasts: Those Who Don’t Know What Sales Will Be Those Who Know They Don’t Know What Sales Will Be

Demand Forecast

Forecast Variables Price Point Merchandising

Promotion Forecast

Forecast Variables Price Point Merchandising Demographics

Store Promotion Forecasts

Forecast Variables Price Point Merchandising Demographics Week of the Month Day of the Week Weather Competitive Response

Bob Drury Laws of Sales Forecasting The Only Thing Less Reliable than a Monthly Sales Forecast is a Weekly Sales Forecast Only the Consumer Knows What They Want and When They Want It They Won’t Tell Us

Consumer Demand

Worst Sales Forecasts of All Time

Worst Sales Forecasts of All Time “I think there is a world market for about five computers.”

Worst Sales Forecasts of All Time “I think there is a world market for about five computers.” Thomas Watson, Chairman of IBM, 1943

Worst Sales Forecasts of All Time “There is no reason for any individual to have a computer in their home.”

Worst Sales Forecasts of All Time “There is no reason for any individual to have a computer in their home.” Ken Olson, CEO of Digital Equipment, 1977

Worst Sales Forecasts of All Time “640K of memory ought to be enough for anybody.”

Worst Sales Forecasts of All Time “640K of memory ought to be enough for anybody.” Bill Gates, CEO of Microsoft, 1981

How?

Knowledge Is Power Machiavelli, Niccolò (1469-1527)

Be Prepared

Respond Quickly

Point of Sale Consumption Replenishment Model Continuous Flow of Product

Thank You for Your Time Bob Drury