common goals common measures webinar slides€¢ wegmans • cvs • daymon ... zone / area /...

Enhancing Trading Partner Relationships with Common

Goals and Common Measures

The New GS1 Trading PartnerPerformance Management (TPPM) Standard

26 February 2009Matt Johnson, Oracle / Kraig Adams, The Coca-Cola Company

Global Standards Management Process ©2007 GS1 US

Trading Partner InitiativesState of the Industry

Challenge• Trading partner initiatives are ad hoc• Goals are not aligned• Evaluation metrics vary from company to company• No common basis for understanding results

DC VENDOR # VENDOR NAME ACTUAL �CASES ON HAND WEEKLY �SHIPMENTS AVERAGE �DAYS ON HAND Service Level1 8 99.72 14 96.43 14 98.44 10 100.06 22 99.87 13 100.0

Avg Days On Hand = 13.5 Avg = 99.1Avg Wks On Hand = 1.9

Last WeekTY LY Diff

VENDOR SUMMARY : Vendor Nbr : Date :

WAREHOUSEShips At Cost $0 $0 0.00%Demand LevelWarehouse Turns 0.00 0.00 0.00%Warehouse Weeks On Hand 0.00 0.00 0.00%Cost On Hand $0 $0 0.00%Cost On Order $0 $0 0.00%STORESales $0 $0 0.00%All Comp Store Sales $0 $0 0.00%Avg Price 0.00 0.00 0.00% Plan Plan % of Change

Weeks Service ServiceWeek Weeks Coverage Store Turns Level Level

Ending Inv. Movement Coverage Goal Cuts Turns Goals Stores GoalsFY '07

01/06/07 6,500 4,485 1.4 2.0 2 35.9 26.0 99.96% 95.0%01/13/07 10,208 4,837 2.1 2.0 16 24.6 26.0 99.67% 95.0%01/20/07 12,073 4,268 2.8 2.0 16 18.4 26.0 99.63% 95.0%

Average FY '07 9,594 4,530 2.1 2.0 11 26.3 26.0 99.8% 95.0%Goal per week 5,000


Industry Track (Collaborate)

Best Practices/ Standards

Documentation, Education,

Communication

Guiding Principles and Frameworks

Share Results

• StrategyAlignment

• JAG Framework

Focus on

Consumer

• Sustainability• Cross

Industry Integration

• Integrated Supply Chain

Share Our Supply Chain

Trading Partner Track (Competitive Advantage)

*Note: Utilizations of Industry Standards

Strategic Issues Between Trading

PartnersCommon Goals,

Common MeasuresSpecific Measures

& Priorities

Other Data Sharing

Opportunities

Consumer/ Shopper

Satisfaction• Knowledge, Skills & Capabilities

• Incentives & Rewards

• Organisation Design

Prepare People for New World

Industry ResponseNew Ways of Working Together

• Common Goals & Measures

• Information Sharing*

• EPC• Data Sync

Connect our Business

Information


Eliminate Disruptions

Prom

ote

Gro

wth

Collaborative ProjectsWith Great Return!

Aligned StrategiesAligned Resources: Butterfly to Diamond

Butterfly Diamond

BuyingSalesITDistributionLogistics MerchandisingAccountingMarketing

ITDistribution

Logistics Sales

AccountingMarketing

Weekly/MonthlyWeekly/MonthlyDay to Day interactions

QuarterlyQuarterlyCross functional Reviews

AnnuallyAnnuallyReview results, strategies, goals for year

Joint Business Planning Standard Measures and Common GoalsShared Tracking and Scorecard

Measured Results

New Ways of Working TogetherBest Practices


Eliminate Disruptions

Prom

ote

Gro

wth

Collaborative ProjectsWith Great Return!

Aligned StrategiesAligned Resources: Butterfly to Diamond

Butterfly Diamond

BuyingSalesITDistributionLogistics MerchandisingAccountingMarketing

ITDistribution

Logistics Sales

AccountingMarketing

Weekly/MonthlyWeekly/MonthlyDay to Day interactions

QuarterlyQuarterlyCross functional Reviews

AnnuallyAnnuallyReview results, strategies, goals for year

Joint Business Planning Standard Measures and Common GoalsShared Tracking and Scorecard

Measured Results

o

New Ways of Working TogetherBest Practices

Focus of today’s session


A New StandardTrading Partner Performance Management (TPPM)

• GS1 specification approved in November 2008• Approved by major companies:

• Wal-Mart• Carrefour • Safeway• Wegmans• CVS• Daymon

• Standard business measuredefinitions – ready to use

TODAY

• P&G• Coca-Cola• J&J• General Mills• Brown Forman• Georgia-Pacific• JM Smucker


17 Measures in 4 Categories

• Item Data Synchronisation (%) • Item Master Data Accuracy (%)

• Out of Stock (%)• Finished Goods Inventory Cover (Days)• Service Level / Fill Rate (%)• Order to Delivery Cycle Time (Hours)• On-time Delivery (%)

TPPMMeasuresTPPM

Measures

SalesSales OperationsOperations

Supply ChainSupply Chain Data AccuracyData Accuracy

• Sales Growth (%)• Share (%)• Sales Forecast Accuracy (%)• Retail Item Gross Margin (%)• Retail Gross Profit Margin (%)• Markdown (%)

• Order Item/ Quantity Change (%)• Unsaleables (%)• Invoice Accuracy (%)• On Time Payment (%)


“P&G has supported the development of the GS1 TPPM Standards and is committed to implement them. With the Standards defined, we will begin the process of incorporating them into our systems. This work is the foundation for setting common goals and common measures with our trading partners.”Milan Turk, Managing Director, Customer eCollaboration, Procter & Gamble Global Operations

“Wegmans Food Markets is eager to integrate the GS1 TPPM Standards into the framework of our New Ways of Working Togetherprogram. Having a clearly defined set of measures for the industry ensures the same language is being used in trading partner relationships, which is an important step in eliminating disruptions and allowing the trading partners to focus on the consumer.”Marianne Timmons, Vice President, Supply Chain and Global Business to Business, Wegmans Food Markets

Putting the Standard into Action


Sample DefinitionOrder-to-Delivery Cycle Time

Definition• The average length of time between order placement (fax, phone,

EDI) and the time product arrived and was available for unloading at the agreed customer location.

Formula

Where ReceivedDateTime = Date Time on which product is ‘checked in and available for unloading’ by the customer (including transit, warehousing, appointment delays)Elapsed time is measured in calendar hours, not business hours

( )

i

imeOrderDateTteTimeReceivedDaTimeiveryCycleOrderToDel i

ii∑ −=

GCI Scorecard BM11 (Lead Time)


Multiple Levels of Measurement

Product Scope Location Scope TimeframeGTINProductStyle / Color / SizeFlavorVarietyBrandClass / SubclassCategory / DepartmentLine of BusinessTrading RelationshipTotal

Stocking LocationStoreStore Region / ClusterZone / Area / ChannelDC / PlantLane or RoutePostal CodeCity / State / CountryGeographic RegionGeographic SubregionTotal

Day / Week / Month Quarter / YearMonth to DateQuarter to DateYear to dateRolling 4-week PeriodRolling 13-week PeriodRolling 12-month PeriodTime-Independent

For each measure, companies select the appropriate levels of product scope, location scope and timeframes to evaluate.


Calculation ParametersSupport Different Trading Relationships

Param

eters

Delivery time measurement basis

•P.O. need-by date•First appointment time•Last appointment time

Values

Out-of-stock measurement

method

•Manual audit•Perpetual inventory•Sales data analysis•RFID / EPC•Other

Inventory basis •On hand only•Pipeline inventory included

Demand estimation basis

•Forecast basis•Historical basis

Service level measurement basis

•Shipped quantity•Received quantity

Cost allocation basis

•Miscellaneous costs excluded•Miscellaneous costs included

Forecast type •Total•Promotional•Baseline

Synchronization calculation type

•Total items•Incremental items

RecommendedParametersare in Bold

©2008 GS112 Global Standards Management Process

Applying TPPM to your Business3 Cases

1

2

3


Case 1Existing measure is in TPPM

Use TPPM

Suggest TPPM

Extension

NO YES

NO

YES

YES

NO


Case 2Existing measure is *NOT* in TPPM

Drop Use of Measure

Suggest TPPM

Extension

NO

YES


Case 3TPPM measure is not currently used

Do not use TPPM

measure

Do not use TPPM

Measure

YES

NO

YES


Scorecard ModelCategory 1 Category 2 Category 3 Category 4 Category 5 Category 6

Coke Dollar Sales

Coke Unit Sales

Supplier Penetration

Coke Case Sales

Category Dollar Sales

Wegmans Share

Item Data Synch

Invoice Accuracy

Deductions

Cat

egor

yB

rand

Com

pany

Supp

lyC

hain

Item Data Accuracy (WH)

Item Data Accuracy (DSD)

Coke Gross Margin Dollars

Fill Rate

Category Unit Sales

Category Gross Margin Dollars

Measure meets or exceeds goal

Measure is within 10% of goal

Measure is more than 10% off of goal

No data is available for this measure

No new data available this week (previous value shown)

Key

WK 13WK WK 13WK WK 13WK WK 13WK WK 13WK WK 13WK


Investigating issues


Value of Scorecard

• Single source of the truth managing common goals and common measures• Less time preparing information and more time evaluating

business performance

• Snapshot against clearly defined goals• Consistency for monitoring health of business• Highlights areas needing potential clarification or

corrective action to alleviate disruption• Measures vary between DSD and Warehouse suppliers

• Fewer Supply Chain measures• Goal variance of 10% better for monitoring Scorecard• Weekly & Rolling 13wk monitoring was most valuable


TPPM Work Group

• 38 Retailer and Manufacturer Participants• Business Design Phase• Two Conference Calls

per Month• GS1 Community Room

for details• GSMP event March 23-26

(Los Angeles)• TPPM meeting March 23rd

JOIN THE TEAM!

1Statement of

Business Need

2Requirements Gathering &

Analysis

4Technical Solution Design

3Business Solution Design

5Pilot

6Posting

Implementationand

Feedback


Contact Details

Kraig ADAMSThe Coca-Cola CompanyO +(1) 404.676.0059E [email protected]

Matt JOHNSONOracleD +(1) 781.744.0548E [email protected]

common goals common measures webinar slides€¢ wegmans • cvs • daymon ... zone / area /...

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