ecr europe supply side topics ecr europe executive board meeting on 12 november 2004
TRANSCRIPT
ECR EuropeECR EuropeSupply Side TopicsSupply Side Topics
ECR Europe Executive Board meeting on 12 November 2004
ECR EuropeECR Europestarted off withstarted off with
Supply Side Topics in 1995Supply Side Topics in 1995
Supply side offered the most obvious opportunity for efficiency
and savings
Summary of supply side topics
– Efficient Replenishment & Electronic Data Interchange (1995-1996)
– Efficient Unit Loads (1996-1997)
– Efficient Replenishment with third party service providers (1998-1999)
– Transport Optimisation (1999 – 2000)
– Integrated Suppliers – ECR upstream (1999-2000)
– Unit Loads Identification & Tracking (1999 – 2000)
– Reusable Transport Items (2000 & 2003)
– Collaborative Planning, Forecasting & Replenishment (2001 – 2002)
– Consumer Direct Logistics (2001 – 2002)
– Shrinkage (1999 – ongoing)
– Optimal Shelf Availability (2003 – 2004)
– Traceability (2003)
‘History’ of supply side topics
1995 – 1996:Efficient Replenishment & Electronic Data Interchange
models for replenishment (e.g. cross-docking, vendor managed inventory, etc.),
necessary EAN communication standards
‘History’ of supply side topics
1996 – 1997:Efficient Unit Loads
dimensions and handling procedures for pallets, crates, cases
‘History’ of supply side topics
1998 – 1999:Efficient Replenishment phase II
involvement of third party service providers in replenishment processconsolidation of shipments/backhauling
‘History’ of supply side topics
1999 – 2000:Transport Optimisationbest practices for optimal use of transport capacity
• Pallet height• Multi-modal transport• Vehicle technology• Efficient network design• Shipment consolidation / backhauling
‘History’ of supply side topics
1999 – 2000:Integrated Suppliers (‘ECR upstream’)
extending ECR collaboration upstream to packaging, ingredients & raw material providers
‘History’ of supply side topics
1999 – 2000:Unit Loads Identification & Tracking
best practices for identification & tracking of pallets & cases based on EAN
standards
‘History’ of supply side topics
2001 & 2003:Reusable Transport Items
reusable pallet & crate dimensions (further development of former efficient unit loads recommendations)handling mechanisms / organisationcommunication
‘History’ of supply side topics
2001 - 2002:CPFR (collaborative planning, forecasting & replenishment)
Simplified version of the VICS modelEuropean case studies & insights
‘History’ of supply side topics
2001 - 2002:Consumer Direct Logistics (on-line shopping)
Impact of consumer direct operations on logistics
guidance on best logistics approaches to consumer direct
‘History’ of supply side topics
2003 - 2004:Optimal Shelf Availability
roadmap to better shelf availabilityharmonised measurement approachnow in implementation stage
‘History’ of supply side topics
2002-2004:Traceability
best practice guide on how to comply with EU regulation 178/2000 (implementation as of 1 Jan 2005), based on EAN standards
‘History’ of supply side topics
1999 - ongoing:Shrinkage – reducing stock loss in the supply chain
roadmap on collaborative approach to shrinkage
studies on various aspects of shrinkageimplementation support
Global ECR Scorecard results (2003-2004)
Overall Supply Strategy & Capabilities
ECR strategyAverageScore Status of activities
Strategic direction 2.5
Roll-out of projects with trading partners to improve supply chain capabilities and reduce cost using actual demand signals.
People & organisation 2.6
Total Supply Chain teams assume responsibility for total logistics system. Building direct links with counter-part teams in key trading partners.
Information management 2.3
Most supply chain data is communicated manually between trading partners. Some point of sale transaction data is communicated electronically with key trading partners.
0 = nothing planned; 1 = plans agreed; 2 = pilots; 3 = implementation started; 4 = fully implemented
Supply Management, Supply Strategy & Capabilities (2003-2004)
Strategic Direction
67 scorecards, average=2.5
4 5
3.5 3
3 24
2.5 10
2 16
1.5 3
1 5
0.5 0
0 1
Supply Management, Supply Strategy & Capabilities (2003-2004)
People & Organisation
67 Scorecards, average=2.6
4 6
3.5 1
3 33
2.5 5
2 12
1.5 5
1 4
0.5 0
0 1
Supply Management, Supply Strategy & Capabilities (2003-2004)
Information Management
67 scorecards, average=2.3
4 3
3.5 1
3 30
2.5 5
2 12
1.5 3
1 8
0.5 5
0 0
Global ECR Scorecard results (2003-2004)
Details on supply side concepts
ECR strategyAverageScore Status of activities
Transport Optimisation 2.9Roll-out started: transport capacity utilisation is part of total supply chain costs; supply chains critically monitored for balance of costs and networks changed accordingly
Product Flow Techniques (Efficient Replenishment) 2.5
Between pilot and roll-out phase; implications of different techniques understood; monitoring of results by ABC;
Integrated Suppliers 2.3 VMI pilots with some upstream suppliers underway
Shrinkage 2.3Isolated, but detailed, programmes on 'hot' products are implemented, based upon information and data gathered. Programmes are reviewed and areas for internal collaborative working are identified.
Efficient Unit Loads 2.2Pilots with some trading partners underway to harmonise tertiary & secondary items
Collaborative Planning, Forecasting & Replenishment (CPFR) 1.9
Plans are combined to form a jointly agreed single plan. Occasional joint review of the plan takes place. Raw data is exchanged between trading partners and is actively incorporated in forecasts. Processes exist to convert sales forecasts into order forecasts. Accuracy of forecasts is measured.
Optimal Shelf Availability 1.6
Plans to measure and set targets. Mostly irregular manual collection of on-shelfavailability data, plus ad hoc reviews.
Product Flow Techniques - Efficient Replenishment (2003-
2004)44 scorecards, average=2.5
4 11
3.5 1
3 7
2.5 7
2 9
1.5 4
1 2
0.5 0
0 3
Transport Optimisation (2003-2004)
63 scorecards, average=2.9
4 17
3.5 6
3 19
2.5 5
2 8
1.5 1
1 4
0.5 2
0 1
Efficient Unit Loads (2003-2004)
65 scorecards, average=2.2
4 9
3.5 3
3 10
2.5 12
2 13
1.5 3
1 6
0.5 4
0 5
Integrated Suppliers (ECR upstream)(2003-2004)
26 scorecards, average=2.3
4 0
3.5 1
3 5
2.5 11
2 6
1.5 1
1 0
0.5 1
0 1
Reliable Stock Loss Management (Shrinkage)
(2003-2004)
50 Scorecards, average=2.3
4 5
3.5 6
3 13
2.5 2
2 11
1.5 3
1 5
0.5 1
0 4
On-Shelf Availability Management(2003-2004)
51 scorecards, average=1.6
4 1
3.5 1
3 12
2.5 3
2 9
1.5 0
1 12
0.5 6
0 7
Supply side implementation
Average Scorecard results between 1.6 and 2.9
Pilot stage Implementation started
New supply side topics
In June, the national ECRs, together with theAdvisory Group, generated a list of 8 broadsupply side areas for potential action by ECREurope:– Impact of new technologies on supply side practices– Waste Management– Visibility and control of product movement– Reaching out to other supply chain partners– Cross border supply chains– Efficient Pallet Management– Factory Gate Pricing– Quality management in supply chain management– Effect of standards on supply chain management
New supply side topics
In July, the supply side break-out session of the ECRBoard recommended to focus on the following:
– Impact of new technologies on supply side practices– Waste Management– Reaching out to other supply chain partners– Visibility and control of product movement– Cross border supply chains– Efficient Pallet Management– Factory Gate Pricing– Quality management in supply chain management– Effect of standards on supply chain management– + new: Re-mapping of the supply chain
Supply Chain Re-mapping
• Proposal at July Board meeting– Update 1995/96 supply chain mapping carried out
under Efficient Replenishment & EDI project– Include new developments
• Conclusion by September Advisory Group– Supply chain transformation due to new
technologies is handled under EPC business case of GCI
ECR Europe should examine the transformational scenarios identified by this study and their impact on ECR best practices
Waste Management
• Proposal at July Board meeting– Impact of European waste regulations on
supply chain operations– Mapping of requirements for companies and
best practice guidance• Conclusion by September Advisory Group
– Already well covered by existing European and national organisations
– Waste management implementation is a local affair
No need for an ECR Europe project
Cross-border supply chain optimisation
• Proposal at July Board meeting– Impact of EU enlargement on distribution,
warehousing, supply chain configurations
• Conclusion by September Advisory Group– This addresses genuine logistics &
distribution issues– EU expansion very topical
Worthwhile to have a group look at this in greater depth
Overall outcome
– Emphasis needs to be on learning and implementation of ECR supply side best practices
– Analysis of impact of RFID/EPC on supply chain practices
– Potential project on cross-border supply chains