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Despite its retail leadership in Brazil, Grupo Pão de Açúcar has set a strategic intent to grow the business and to innovate to meet customer needs and to operate more efficiently—all within a fiercely competitive retail environment.
To create a solid foundation for the future, the company launched a multiyear transformational “Future of Retail” program focusing on implementing innovative capabilities and world-class operational excellence practices.
Grupo Pão de Açúcar has chosen to collaborate with Accenture on this transformational program that includes the implementation of 16 solutions of Oracle Retail and PeopleSoft. The program is helping the company achieve high performance by improving business operations in a number of ways: improving stock availability while reducing inventory levels; providing a process and systems platform to enable operations for a significant larger number of stores and warehouses; improving warehouse utilization while optimizing distribution, optimizing mark-downs and promotion decisions to improve margin; integrating and collaborating with vendors; and simplifying operations through automation and exception-based management.
Accenture deployed a team of professionals skilled in retail industry processes and with deep solution experience in Oracle Retail to work together with Grupo Pão de Açúcar. Moreover, Accenture proposed a differentiated approach for the implementation, focusing on creating business value in each phase of the program.
The “Future of Retail” program was divided into three phases:
Phase 1—Supply chain optimization
Oracle Retail Demand Forecasting delivered very positive results: Grupo Pão de Açúcar’s stores, with an inventory of approximately 80,000 active products (SKUs) per store, are constantly challenged to forecast sales accurately in an environment where demand is highly volatile, consumers are price sensitive and more than 40 percent of sales (in dollars) are promotional. Sales forecasts are now generated daily for each store helping support better decision making for improved customer experiences.
The sales forecasts are an important input to a new replenishment capability that uses the Oracle Retail Advanced Inventory Planning application. The new model brings an end-to-end replenishment view of the supply chain from stores through distribution centers to suppliers and new replenishment algorithms improving the replenishment capabilities. To date, solution deployment has shown significant inventory benefits: increased product availability with reduced total inventory levels.
Phase 2—Improving store and supply chain operations
Currently under way, this phase is focusing on improving operational efficiency of the distribution centers and stores, creating the foundation to support Grupo Pão de Açúcar’s growth plans. The program has already completed the solution design to optimize transportation management and warehouse operations, leveraging the Oracle Retail Warehouse Management system and Oracle Transportation Management applications.
Phase 3—Collaboration and improving bottom-line margin
Efforts in this phase will concentrate on building better decision-making capabilities and optimizing the aspects of markdowns and promotions and replenishment. Also in this phase, further steps will be taken toward integration with strategic suppliers.
All the solutions are planned to be deployed in phased releases across all stores and distribution centers throughout Brazil.
With Accenture’s help, Grupo Pão de Açúcar is making progress in deploying its “Future of Retail” program. The program is positioning the company to achieve high performance by improving business operations in a number of ways.
"The program aims to create efficiencies for the next 20 years. Through the program we want to bring science to retail management, create a new management mind-set to differentiate Grupo Pão de Açúcar’s performance from that of local competitors and make our company’s standards comparable to world-class standards,” according to Program Lead Alexandre Vasconcellos.
As a result, Grupo Pão de Açúcar is laying the foundation to provide customers with a better shopping experience at each one of its stores, differentiating its stores from the competition and creating a foundation for sustainable business growth.
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