tpa product freshness team: improving product freshness · rob shifter – nestle bob schuler –...
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TPA Product Freshness Team: Improving Product Freshness
Trading Partner Alliance (TPA) Supply Chain
Background: In May 2013 the FMI / GMA Supply Chain Committee held an Ideation Session to identify areas for TPA focus. Several sub-committees were formed in key focus areas • Our sub-committee’s focus: identify product freshness
issues throughout the supply chain and create initiatives that the TPA could launch to drive improvements
Sub-committee: Product Freshness
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Product Freshness Sub-Team Members
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Scott Andrews – Wegmans Food Markets, Inc.
John Coyle – White Wave
Steve Dollase – Inmar
Greg Johnson – Kraft Foods
Nick Konat – Target
Duane Montague – Reily Foods
Pat Neville – CVS
Marjorie Porzycki – Kraft Foods
Rob Shifter – Nestle
Bob Schuler – Albertsons
Isabel de Sousa – Clorox
Daniel Triot – GMA
Pat Walsh - FMI
= Presenting Today
#1: The Shoppers Mandate Recent Shopper Research1 on Freshness:
– Among some of the most profitable shopper segments, availability of “high quality, fresh products” is the #1 factor driving choice of a retailer
– 82% of shoppers always check freshness / expiration dates when they shop
– 67% of shoppers wish there was a better way to know if food is fresh
– Only 35% of shoppers believe that the freshness / expiration dates on products are always accurate
#2: Expired product is a major source of waste in our shared Supply Chains
– Unsaleable product is a multi-billion dollar problem
– Additional costs and risk throughout the supply chain
1. Inmar shopper study, December 2013
Why Focus on Freshness?
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Product Innovation
Supplier Supply Chain
Retailer Supply Chain
Consumer Pantry
Key Processes:
• S&OP Process • Joint Business Planning
• New Item Launches
• Set Service Levels for New Items
Key Processes: • VMI Performance
• Alignment with Retailer Goals
• New Item Introduction and Execution
• Item Exit Strategy Planning
Key Processes: • Days of Supply Targets
• Store Process for Pulling Product
• Analyzing Unsaleable Data
• POS Data Sharing
• Item Exit Strategy
Key Processes: • Interpretation of Code Dates
• Readability of Code Dates
Product Freshness Framework
Team Focus Areas:
Code Dating Best Practices
Data Visibility
Demand Planning / Forecasting
KPI’s & Collaboration
Product & Packaging Best Practices
Data Visibility
Data to Support Freshness Efforts
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PLANT >>>>> DC >>>>>CUST
WAREHOUSE>>>>> STORE >>>>> RECLAIM
Historical Visibility
More Recent Visibility
Examples of Available Case Quantities Shipment History Quantities Received Quantities Received Units
Data Code Dates Code Dates by Order Inventory Positions Sales Dollars
Inventory Positions Case Quantities Days Of Supply Days Of Supply
Inventory Positions Code Dates
Sources of Data:
Mfg Internal
SystemsX X
Customer Portal X X X
Customer Provided
(Excel)X X X
Cust Data through
3rd Party (Rsi)X X X
X X X X X
Package Quality Receiving Receiving Damage Damage
Case Quality Damage Damage Shelf Management Good Product
Shelf Life Shelf Life Shelf Life
Package Quality Package Quality OSA
Case Quality Case Quality
3rd Party Audits
(Inmar) and
Examples of
Available Data
Item A 11.2 Month
Shelf Life
Length of Arrow Represents Shelf Life in Months
Illustration 1: Customer X Examples of Buying Patterns, shelf life and reclaim Understand Patterns and adjust
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Illustration 2: Customer Y Examples of “Ticking Time Bomb” Go Check Inventory NOW
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Illustration 3: Customer Z Examples of Buying Patterns, shelf life and reclaim Understand Patterns and adjust
Length of Arrow Represents Shelf Life in Months
Reclaim Units Store Receipts Units Store On Hand Units
Total Sales Units
Item A 11.1 Week Shelf Life
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Illustration 3: Continued
Item B 12.7 Week Shelf Life
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KPIs &
Collaboration
Potential Structure and Process Recommendations
Supplier – Concept of ‘Freshness Advisor’
Retailer – Focus on Reverse Logistics
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Freshness Advisor: The Concept
Unsaleables
Industry problem for years without a quick-solve, magic bullet
Best Practices
A variety of approaches may be required to address unsaleables
Solutions
As root causes are identified, implement solutions, assign tasks, and track progress
Forward Change
Change behavior and processes going forward to ensure different results
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Team Approach
Cross-functional involvement to address specific issues:
Use proven menu of ideas to discuss with the team:
• Retailer: Buying, Merchandising, Supply Chain, Distribution Operations
• Supplier: Sales, Customer Service, Supply Chain
• Basic practices • Velocity • Promotion Management • Product Lifecycle • Business Practices and Policies
Team Approach
Proven Menu
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Collaboration:
Data-Driven Solutions
• Identify available sources of data, such as shipments, code dates, unsalesables, etc.
• Utilize retailer, supplier, or third party data sources
Pareto Opportunities
• Identify largest financial opportunities or main sources of disruptions
• Focus on trends
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Internal & External
Alignment
• Common Goals and Measures • Aligned Resources • Clear Roles and Responsibilities
Product & Packaging Best Practices
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Packaging Innovation to Facilitate Product Freshness
Secondary Packaging
• Distribution
• Shelf-ready packaging
• Inner pack configuration
Consumer/Sell Unit Packaging
• Date code innovation
• Date code quality
• Tray/display pack
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Secondary Packaging: Distribution
Case design to call attention to date-sensitive products upon receipt and DC pick process
Case coloring
Bold print on cases
Bar coded dates on cases
BOLD
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Secondary Packaging: Retail
Case and inner pack configuration
Tray/display pack configuration
Retail-ready case packaging
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Consumer/Sell Unit Design
Front-facing date code indicators
Color changing labels to show
remaining shelf-life
Consistent date code production
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Code Dating Best Practices
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3 primary considerations related to code dates
Shelf Life Remaining
Days at Manufacture
Days when Shipped
Based on Ingredient Life
Verbiage of Code Dates
Sell by
Best when used by
Best Before
Use By
Based on:
• Category
• History
• Manufacturer
Preference
• Perishability
Actual Printed Code Dates
Legibility
Readability
Clarity
Location on Package
For:
• Consumer
Understanding
• Store Rotation
• Freshness
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Actual Printed Code Dates
Manufacturers and Retailers with private label should ask
Can a Shelf Stocker easily read the date for proper rotation?
Can a Consumer easily find and understand what the code date means?
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Actual Printed Code Dates
• Combining Dates with Lot Numbers on Same Line
• No contrast between Ink and Background Color
(Dark on Dark, Light on Light)
• Hidden Dates (Under flaps or wrapper)
• Font size and Italics (Aging Population)
• Use of Abbreviations (BB=Best By)
• Noting somewhere on label, where and what the
code date means elsewhere
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Examples of Readable Dates with Description
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Examples of Readable Dates with Description Date Line with Lot Number creates confusion
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Examples of Readable Dates with Description Noted Elsewhere on Label:
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Code Date with NO reference anywhere on what the date means:
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Examples of Dates but with Abbreviations:
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Examples of Contrast Issues:
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Examples of Harder to Find or Read:
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Examples of Harder to Find or Read:
Can’t Read Code
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Examples of Problems:
Illegible Date
Almost hidden under flap
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Examples of Problems: Double Stamp – Can’t read
Can’t decipher
No Date
Stamp across color break
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Actual Printed Code Dates: Summary
This is something that EVERY manufacturer and retailer with private label can take on.
• Many opportunities can be addressed internally
• Foster internal education and awareness across functions
• Conduct an audit of all code dates - identify issues, rank
opportunities and execute improvements
• Create a code date score carding process
• Set up a feedback system; 3rd party can collect data and
provide support for continuous improvement
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Update on TPA Leadership Dialog
related to Code Dating
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Summary & Next Steps Summary • Product freshness is an increasingly important issue for our industry,
and there are a variety of opportunities for you to influence freshness within your organization:
• Leverage shared data to identify opportunities and support continuous improvement
• Collaborate internally and with trading partners and apply outcome-based KPIs
• Apply best practices in packaging and code dating
Next Steps for the TPA Product Freshness Team • Build out a total supply chain view of product freshness and shelf life • Collaborate with TPA leadership on standards for code dating
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Volunteers to join our team are always welcome!
Q A &
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