1 June 2009

A pilot implementation was conducted at a store located in London’s Heathrow Airport

Compass Group, a UK-based holding company, provides food, retail and support services to customers in airports, corporate offices, schools, colleges, hospitals, military posts, sporting and cultural venues, as well as remote locations in the energy, mining and construction sector. Each and every day, Compass Group serves more than one million meals to clients in 64 countries around the world. In the UK, it operates over 1,200 retail outlets in the workplace, selling a targeted range of products including drinks, snacks and convenience goods.

The ever-increasing demands of delivering quality food and superior service in today’s competitive retail environment can be challenging. To continue to provide exemplary provisions and retail services to its customers, Compass Group defined business objectives, operational challenges and requirements to maintain its market leadership position and improve the efficiency of its business. Additionally, the company wanted the capability to provide store-specific planograms to more effectively display products in its stores, as well as provide a targeted category mix of products to stock on the shelves.

To achieve these objectives, Compass Group realised it needed a space planning solution that would also streamline category management processes across the organisation and optimise business performance.

“We were looking for a space planning solution that would deliver unsurpassed visibility into sales, collaborative planning, category management, and most importantly, insight into what customers want,” said Matthew Harker, space planning manager at Compass Group. “Additionally, the solution needed to be quickly implemented and integrated, as well as be able to adapt to our changing needs in the future.”

Compass Group researched many IT solution providers during its vendor selection process. Compass Group decided upon JDA Software for a number of criteria: JDA’s proven track record as a best-in-class retail solutions provider, the ease of use and functionality its Category Management solutions offer, as well as the fact that the Microsoft-based system is consistent with the rest of Compass Group’s enterprise.

Compass Group selected JDA Space Planning to streamline the execution of top-level category plans, manage its store-specific planograms, achieve store-specific assortment management, maximise profits and extend customer loyalty by precisely placing the right products in the right positions at the right time.

“JDA Space Planning performed the best in terms of functionality and ease of use,” said Harker. “In regards to features, Compass Group’s in-house steering team liked that Space Planning is a Windows-based system compatible with our previous versions and is already used by most of our suppliers.”

Implementation of JDA Space Planning was completed within six weeks and Compass Group was up and running in no time. The first range review was delivered, on time, within ten days.

“Implementing JDA Space Planning was a quick and easy fit for our business,” explained Harker. “It also will result in less of a need for modifications further ahead. Furthermore, we will be able to collaboratively plan our offer with our manufactures and suppliers and speed up the whole range review process as we can share data quicker and in the same format.”

Since installing JDA Space Planning, Compass now has far better insight into what and where it should stock certain products. The company can now provide complete range planning across all of its retail outlets to help appeal to different demographic types. For instance, the company stores that Compass Group operates for large manufacturers that employ blue-collar workers prefer soft drinks during their breaks, in contrast to the different range of products in Compass stores located in airports where flight crews tend to be looking for quick, ready-to-eat meals or toiletries while in transit. Schools, on the other hand, prohibit the sale of confectionary items and high-sugar drinks, so Compass Group has leveraged JDA Space Planning to ensure it has exactly the right products in the right place.

“Regionality is also a huge factor that has to be taken into account when planning layouts and planograms for every store, as well as our overall category management strategies,” explained Harker. “Specific brands of soft drinks have to be stocked in Northern Ireland or Scotland for example, while we have a larger demand for mineral water in the south-eastern region of England.”

With the implementation of JDA Space Planning, Compass Group can quickly analyse how much of a product can be sold, how long it will take to sell, how much inventory must be kept in stock and how much space is needed to support sales requirements. Compass Group can now easily determine target inventories for each product, helping to reduce inventories while keeping the right amount of product on hand.

In a pilot test at a store located in London’s Heathrow Airport, Compass Group used JDA Space Planning to analyse sales and deduced that more toiletries were being sold, but that sales were lagging in its health and beauty ranges. It also noticed that flight crews only had a limited amount of time to shop and wanted ‘grab and go’ food items. Stocking liquids with more than 100 millilitres was also not sensible because of the safety issues of carrying such items through airport security. The company used these insights to expand certain product ranges and cut back on others. Since revamping its space planning strategies, Compass Group has achieved sales increases of around six per cent at its Terminal 5 Heathrow store and is seeing similar benefits across its 1,200-store retail enterprise. In some categories, sales have grown by as much as 17 and 25 per cent, but overall trials have shown an increase of between three and five per cent.

With the implementation of JDA Space Planning, Compass Group effectively optimised specific operations, including budget simulations and being able to adjust its merchandise mix to better align with seasonal and promotional constraints.

“We have streamlined our processes and achieved a lot more control and autonomy,” said Harker. “Previously, all range reviews were from suppliers, so we weren’t really very independent. Now we have complete visibility and optimisation.”

Since implementing the solution, Compass Group has achieved improved decision-making thanks to more reliable information, improved operational efficiency, optimal information flows and better after-sales service.

“As part of the business’s retail strategy, the JDA Space Planning software is expected to save Compass Group millions of pounds,” said Harker. “In the current economic climate, with rising food costs having to be absorbed by the retailer, the company has successfully optimised the category management of its products to become more profitable.

“JDA has given us a sustainable IT platform for surviving the tough economic times. With food inflation becoming particularly severe in the last year, investing in proven software solutions through vendors like JDA is proving to be one of our main drivers for growth.”

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