ECR Europe Forum '05. Use the ECR scorecard to benchmark and improve your performance

The Global Scorecard
Jim Flannery, Procter & Gamble
Rita Marzian, Metro Group
Co-Chairs, GCI Scorecard Project

Martin White Langsdale Crook

Pam Stegeman Vice President, Supply Chain and
Technology
Grocery Manufacturers of America

August Iwanski CEO, Consumer Goods Council of
South Africa
Chris Cave Jones Associate Partner, IBM Business
Consulting Services
Global Scorecard- ECR Europe Conf 2005 · Page

Agenda – “Find out What ECR Can do for
You”

What is the Global Scorecard and how can it help me?
How does it work?
Key Performance Indicators – the Hard Business Results
Help me understand the capabilities.
Show me the benefits !
How Companies and Countries are using the scorecard to
improve results
Case studies
A Challenge from the Scorecard Project team


What is the Global Scorecard?
Background on the Scorecard Project
October 1998 March 1999 – Amsterdam
Wouldn’t it be a good idea First Global Scorecard meeting
to converge the world’s
ECR Scorecards into ONE Mission:
that could be consistently
used by companies around Create a tool to enable
the world? companies to…
Understand performance
Compare results in a
common way
Establish priorities
The tool should be capable
of being used…
Internally
Collaboratively


Scorecard Journey Four Clear Objectives
A tool capable of Globally consistent
supporting single but “modular” useable in
company or joint developing or mature
engagement ECR situations

More pragmatic Simple
linked to KPIs Easy to use
(day-to-day
management)


The Global Scorecard –
a Capability Assessment tool
- a simple solution to 4 business questions

WWW.GLOBALSCORECARD.NET


1. What is it I want to deliver ?
Key Performance Indicators
Implementation Measures


8 Key Performance Indicators
Category Share – Is the organization achieving the category share desired?
Service Level / Unit Fill Rate – Are all items being delivered as ordered?
On-Time Delivery – Are goods arriving when expected?
Inventory – Have we minimized the amount of inventory needed in the
supply chain?
On-Shelf / Point-of-Sale availability – Can the consumer purchase the
product when they want it?
Order to Delivery Lead Time – How responsive are we to changing
consumer needs?
Distribution costs – Have we optimized the cost of product transportation &
storage?
Data Synchronization – Do we efficiently get information flow right the first
time?


KPI Purpose / Comments Measure Definition Timeframe of Example Where Measured Manuf. Retailer Joint
measure Scorecard

InternalScorecards

Service Level To measure if the units / % Of cases / For all cases / trading Use the data A fill measure. (E.g. if 50 cases of Manufacturer to retailer DC. 1 or 3 1, 2 (& 3 if 1, 2 (& 3 if
/ Unit Fill Rate items being ordered are trading units / units / items ordered, systems item “A” and 75 cases of item “B” (for DSD) manufacturer to applicable) applicable)
volume the % delivered as available from the were ordered but 50 cases of item
being delivered complete store
delivered as ordered. (A volume fill enterprise. For “A” and 60 cases of item “B” were
as measured by the Retailer to Store
ordered measure) benchmarking, delivered. The service level would
(for make to order or
recipient. This is a case/ report the be 88% - 110/125)
consumer direct)
trading unit/volume average of these
Manufacturer to Consumer
data points over
measure.
the most recent
Over deliveries and back
6-month period.
orders should not be
included in this measure.

On-Time To measure order % Of orders # Of purchase orders 1700 orders placed, 1560 Manufacturer to retailer DC. 1 or 3 1, 2 (& 3 if 1, 2 (& 3 if
Delivery processing and delivered on delivered on time delivered on-time (per final (for DSD) manufacturer to applicable) applicable)
distribution performance time. Purchase Order) = 91.1%
divided by the store
number of orders. Retailer to Store
“on-time” is based on (for make to order or
the recipients agreed consumer direct)
delivery window Manufacturer to Consumer

Inventory Measure finished goods Days “Value” of finished Finished goods inventory Value = Manufacturer DC 1,2 & 3 2&3 1,2 & 3
inventory in the supply goods inventory $1,000,000 Retailer DC
chain. The participant divided by the “value” Avg. daily sales = $75,000 Store
decided how that inventory of average daily sales Inventory = 13.3 days
is “valued” (e.g. cost of (calculated based on (1000000/75000)
goods or sales value) and past 6 months
uses that “value” in the history) of these
numerator and products.
denominator.

On-shelf / Measure if the product is % Out of stock # Of items / SKUs OOS should be measured as on-shelf or point-of-sale. This 1 1 1
point-of-sale available when the not available divided frequently and as practically as KPI should be reported by
availability consumer wants to buy it. by the number of capabilities allow (e.g. audits- Manufacturers (based on
We will measure this KPI items / SKUs. preferably at peak times. Mkt. their knowledge of their
at the point-of-sale only – Measurement data, statistical brand’s in-stock position) and
as an out-of-stock rate. analysis) 6 items missing versus by retailers.
100 items expected = 6%


11 Implementation Measures
% of consumer units allocated GTIN
% of cases / cartons / inners allocated GTIN
% of pallets / unit loads labelled with SSCC
% of item exceptions to GTIN allocation guidelines
% of shipping or receiving locations that have been allocated a GLN
% of orders transacted via EDI or XML and % of Invoices transacted via
EDI or XML
% of sales with synchronized Master Data between trading partners via
standards compliant and GS-1 Certified data pools
% of SKUs registered in the GlobalRegistry
% of GTIN’ s that are catalogued consistent with Global Product
Classification Standards
For Retailers: % of checkouts that can scan an EAN 13 digit barcode
For Retailers: % of checkouts that can scan Reduced Space Symbology
(RSS)


1. What is it I want to deliver ?
Implementation Measures

2. What capabilities do I need to deliver it?

a nd B est
onc epts
orec ard C
Sc Prac tices

3. How developed are those capabilities within my situation?

Progress vs. criteria / benchmarking

Entry – Are you ready to work collaboratively?
Do you have the basic Supply Chain Infrastructure in place?

INTERMEDIATE FULL
• Majority of Joint scorecards • Current tool
• Time, resource constrained • Best tool for internal
• non-strategic business / relationship company assessment
• 80/20 approach • used jointly in strategic
relationships

Scorecard – Progress
Seamless link Completing the Family
from Entry
through
Pioneering Full
Intermediate
(1999) Deep dive
to Global

Improving Intermediate
Cascade down
(2002)

Achieving
Cascade down
Entry
(2001)

(2001)

3. How developed are those capabilities within my situation?

4. How do I improve those capabilities?

e.g. link to VICS CPFR site
www.cpfr.org

2002 also saw the introduction of the GCI Compliance Scorecard: A
shortcut to 3 sections of the Industry tool to measure quantifiable results of
implementation of EAN*UCC Standards and GCI endorsed business
Processes,


GCI Compliance Scorecard
Section 1: Captures The Qualitative Measures for Standards
Implementation – CAPABILITY
Section 2: Captures the Quantitative Measures for KPIs
Section 3:Captures the Quantitative measurement for Standards
Implementation
Compliance
Scorecard


Scorecard Usage continues to grow…
Value being delivered and recognized

3500
3000
2500 KPIs
Full
2000
Intermediate
1500 Entry
Compliance
1000
500
0
1999 2000 2001 2002 2003 2004


Which Scorecard Should I Use?
Compliance Companies
400 - Internal Readiness
KPIs
-Management Committees
686
Country GS-1 & ECR
Efforts
- To Drive Standards
Entry Implementation
500 - To set work plan priorities

Trading Partners
- Just Starting to
Collaborate
Intermediate - Driving for Alignment
125 - Strategic Relations


Let’s start off by understanding the WHAT

The Quantifiable Key Performance Indicators
and Implementation Measures of ECR

Compliance
Scorecard


Click
Here


The Scorecard looks like this…..

Qualitative
Assessment of
Capabilities
(not going to spend much
time here)

Quantitative
Assessment of 88
Resultant Key
96
Performance
95
Indicators
22

Global Scorecard- ECR Europe Conf 2005 · Page 32

97

94

Quantitative 7
Assessment of the
89
Implementation
GS-1 Standards and 92
Business Processes
5

50

75

70

8

40

Global Commerce Initiative

Compliance Scorecard
2004 Benchmark Results

July – Sept.
Complete Scorecards

Spring Board Meeting
Review Improvement Plans & Fall Board Meeting
Launch next year cycle Review Results and Progress

Winter / Spring
Case Studies &
Improvement Plans


So How Did We Do?
PARTICIPATION 2002 2003 2004
# of Scorecards 159 183 326 (+78%)
• Growth of Participation
• Was driven by Companies
# of Companiestheir geographic
Broadening
56 60 71 (+18%)
representation
• To be a better measurement tool,
we need to reach out to more
Countries
companies.

NA 25 20 45 (+130%)
EMEA 85 110 185 (+68%)
LA 25 25 29 (+16%)
Asia 25 25 67 (+168%)


There are 11 Implementation Measures
The first 4 are focused on the use of GTINS, or
barcodes at various stages in the supply chain.
And 9 Key Performance Indicators


What is a GTIN ?

The Global Trade Item Number is a
globally unique number to identify
trade items, and is therefore the
foundation for Global e-commerce.
“Umbrella" term used to describe the
entire family of EAN/UCC codes,
including EAN/UCC-8, UCC-12 (UPC),
EAN/UCC-13, and EAN/UCC/DUN-14.


Product & Shipment Identification – GTIN at Consumer Unit Level

Discussion – Why Not 100%?
Use of EAN/UCC 14 digit Global Trade Identification Number (GTIN) at the consumer item level including (1) the ability to store and process 14 digit numbers in
your interface with your trading partners, (2) the ability of all point-of-sale systems in your company if you have them to scan EAN*UCC-13, UPC-12 and
Simple Weighted
EAN*UCC-8 barcode symbols and (3) application of automatic data capture (ADC) for bar-coding scanning and/or radio frequency applications (RFID).

Because there are items transacted that do not have
barcodes today (flowers, bulk, fresh)
Full Total 92.4% 92.2%
Implementation

These items require RSS technology
NA 86.3% 90.4%
Roll-out
Started

EMEA 94.4% 98.3%
Pilots
Started
LA 100% 100%

Plans
Agreed
Asia 84.2% 76.3%
European Analysis- GTIN at Consumer Unit Level

# of Records Business Type Cum. $US Value Wtd. Result
Nothing
Planned
90 Manufacturers $58.4Billion 97.9% of Units allocated a GTIN
28 C&C / Retailers / Wholesalers $76.7Billion 98.6% of Units allocated a GTIN
118 All $138.1Billion 98.3% of Units allocated a GTIN

Product & Shipment Identification – GTIN at Trade (Case, Carton) Unit Level

Use of EAN/UCC system (14 digit Global Trade Identification Number (GTIN) at the Trade Unit
Simple Weighted
level (case, carton) and application of automatic data capture (ADC) for bar-coding scanning
Discussion
and/ or radio frequency applications (RFID).
The largest GAP is the lack of GTINs application at the “Inner pack” level.
Full
It appears that the 89 responding manufacturers 86.5% job than is
Implementation Total do a better 74.9%
“averagely” seen by the retailer segment.

Roll-out NA 84.7% 69.4%
Started

EMEA 88.3% 91.9%
Pilots
Started

LA 99.9% 100%
Plans
Agreed
Asia 79.8% 82.3%
European Analysis- GTIN at Trade Unit Level
# of Records
Nothing
Business Type Cum. $US Value Wtd. Result
Planned
89 Manufacturers $57.5Billion 96.4% of Trade Units allocated a GTIN

27 C&C / Retailers / Wholesalers $82.2Billion 88.7% of Trade Units allocated a GTIN

116 All $139.7Billion 91.9% of Trade Units allocated a GTIN

Product & Shipment Identification (GTIN) Violations

What % of items sold / received have exceptions to the Global Trade Identification
Discussion.
Number (GTIN) allocation guidelines?.
It appears that far fewer companies are tracking / measuring data quality.
(30% less records than most other measures) Simple Weighted
Those that are measuring know they have errors that need to be fixed.
Since “you manage what you measure” and since “data quality” is the root of
Total 2.7%
synchronization benefit – this should be a high priority. 3.0%

NA 2.4% 3.5%

EMEA 2.0% 1.1%

LA 0.9% 2.9%
European Analysis- % of items with Know GTIN Allocation Rules Violations

# of Records Business Type
Asia 5.1%
Cum. $US Value
3.8%
Wtd. Result

43 Manufacturers $42.2Billion 1.4% of items have know violations
26 C&C / Retailers / Wholesalers $74.3Billion 1.0% of items have know violations
69 All $116.6Billion 1.1% of items have know violations

Product Classification Standards

Use of the EAN.UCC GPC (Global Product Classification) standards to classify and
categorise products in the areas of forecasting, planning, searching, procurement,
Simple Weighted
category management and global data synchronization in the communication both
Discussion.
internally within the organizations and between trading partners..
Product Classification Standards new in Mid-2004
Full
Implementation
Fast Moving Consumer Goods including Food, Beverage, Tobacco completed
Total 17.0% 10.0%
4
first. Manufacturers just starting to implement.
Gen. Merchandise, DIY, Hardlines, Apparel to follow
Roll-out
Started
NA 25.6% 9.9%
3
Retailers need multiple categories available to use the capability
This critical mass of categories should be available now.
Pilots
Started
EMEA 16.8% 10.1%
2 1.7
1.2 LA 1.1 15.8%
1.2 5.0%
Plans 1.0
Agreed
1
Asia 18.8% 11.0%
European Analysis- GTINs catalogued consistently with GPC Standards

Nothing
Planned 0
96 Manufacturers
NA EMEA LA $65.6Billion
Asia 17.6%
Total consistent with GPC Standards
6 C&C / Retailers / Wholesalers $48.6Billion 0.0% consistent with GPC Standards
102 All
2004
$114.2Billion 10.1% consistent with GPC Standards

Global Data Synchronization

The establishment, loading, registering and synchronizing of item and party data based
on EAN.UCC standards (GDS Network) Discussion.
Simple Weighted
Results are probably overstated relative to new “certified” measure versus simply
“standards compliant”
Full
GDSN Roadmap / GlobalRegistry now in place. Results should grow.
Implementation

Total 16.3%
Sinfos, WWRE, Transora, GXS, GS-1UK Data Pool, UCCNet (and 4 other) Data 12.2%
Pools now “Certified”
Roll-out
StartedThe “work” is to get non-certified data pools “certified” or move to a certified data
NA 16.6% 9.9%
pool.
Only 11 (versus average 28) retailers responded to this measure.
Pilots
Started
EMEA 18.7% 20.8%

LA 10.6% 4.6%
Plans
Agreed
Asia 8.7% 3.0%
European Analysis- % Sales Synchronized via Standards Compliant Data Pool
Note: in 2005, measure will be adjusted to read “GS-1 Certified Data Pool”
Nothing
PlannedRecords
# of Business Type Cum. $US Value Wtd. Result

97 Manufacturers $66.7Billion 21.2% of sales synchronized
11 C&C / Retailers / Wholesalers $65.4Billion 20.4% of sales synchronized
108 All $132.1Billion 20.8% of sales synchronized

Use of Electronic Message Capability
% of Orders % of Invoices
Use of standard electronic messages to support the product replenishment process
Discussion.
between trading partners. These include orders, advanced shipment notices (or
Simple Weighted Simple Weighted
despatch advice), receiving advice and invoices. remains anshould be transmitted using
Electronic Messaging for orders and invoices Messages underutilized capability
in Europe.
EDI via EANCOM, web-EDI or XML standard formats.
In this case, it appears that the 52.5%
Total participating86.9% make 44.8% of 82.8%
retailers more use the
capability than retailers “averagely” seen by suppliers.
Full
Implementation
NA 73.0% 94.6% 65.7% 91.2%
4
3.3
3.2 EMEA 56.3% 71.7% 51.6% 66.1%
Roll-out
Started 3.1
3 2.7 2.9
2.8 2.7 2.8
LA 2.4 2.4 2.3 2.4 2.5 29.0%
41.5% 39.4% 35.8%
2.2
Pilots
Started 2.0
2 European Analysis- % of44.2% Invoices transacted via EDI or XML35.1%
Asia Orders & 48.7% 28.4%

Plans
Agreed 1021 Manufacturers $70.7Billion 62.2% of orders EDI or XML
99 $67.8Billion 57.6 % of invoices EDI or XML

29 0 C&C / Retailers / Wholesalers $85.4Billion 79.6% of orders EDI or XML
Nothing
Planned 72.9% of invoices EDI or XML
NA
All
EMEA LA Asia Total
131 $156.2Billion 71.1% of orders EDI or XML
128 $153.2Billion 66.1% of invoices EDI or XML
2002 2003

Pam Stegeman

Vice President, Supply Chain and
Technology
Grocery Manufacturers of America


GMA’s Work in Supply Chain

Mission: To assist in creating efficient, effective
supply chain
Tools: ECR principles, GS1 Global Standards
Current Focus:
GTINs, GLNs
Global Data Synchronization
Need: Measurement tool


GMA’s Use of GCI Scorecard

GMA and North American Manufacturers have
been working on GTIN implementation and
GDS for past 5+ years
High level support within companies
Strong desire to track progress
Set North American goals in 2004
Too many industry surveys, but nothing tracking
standards compliance


GMA’s Progress on GCI Scorecard
North American Company Presidents (IAC) took lead
to use existing scorecard to measure progress
Results:
2003 20
2004 45 (+130%)

Now, IAC companies are completing scorecards on
same cycle as GCI Board


North American Goals, Timelines, and
Measures
Implementation Measures 2004 Goal Timeframe
Benchmark
% of consumer units allocated GTIN 90.1 95 Jan 2008
Requires
RSS

% of cases/cartons/inners allocated a GTIN 69.4 80 Jan 2007
Gap is
“inners”

% of pallet/unit loads labeled w/ SSCC 74.0 80 Jan 2007

% of item exceptions to GTIN allocation guidelines 3.5 <1 Jan 2006
All about
clean data

% of shipping or receiving locations that have been 62.8 80 Jan 2007
allocated a GLN Move from
Duns to
GLN


North American Goals, Timelines, and
Measures
Implementation Measures 2004 Goal Timeframe
Benchmark

% of orders transacted via EDI or XML 94.6 85 Goal
Achieved

% of invoices transacted via EDI or XML 91.2 85 Goal
Achieved

% of sales with synchronized master data between 9.9 50 Jan 2007
trading partners via standards compliant data pools 20% in 05
50% in 06

% of GTINS catalogued consistently w/ Global 9.9 50 Jan 2007
Classification Standards


GMA’s Use of GCI Scorecard

Results used by GMA and other industry
groups to determine where more work and
education is needed
More education and business case studies on
GDS
Education/communication of GTIN Allocation
Guidelines
Information on Global Product Classification
Push GLNs


2005 Plan to Drive Engagement

Goal:
15%+ increase in number of manufacturers
completing scorecard
Plan:
Present updates at each IAC meeting
Present to other GMA Committees and
conferences
Use output as GMA Benchmarks on Standards
implementation in U.S.


Is ECR dead in the U.S.?

Absolutely NOT!!!
U.S. FMCG and Retail industries have similar
work plans to ECR Europe

We may not have a formal ECR venue,
but the work, the attitude, and the collaborative
spirit is alive and well


A Quick Look at Key
Performance Indicators


2003 2002 Simple
Simple Average
Sample total 2004 Average
revenue Sample
Criterion – EUROPE Totals Units US$m # Records Weighted Avg

Service Level / Unit Fill Rate % 132401 87 95.2 96.9 96.1
On-Time Delivery % 128720 80 90.6 88.4 93.4
Manufacturer/Supplier's Finished Goods days 43605 55 39.2 39.2 42.3
Inventory Cover
Retail Distribution Centre Inventory Cover days 98083 41 19.1 19.1 15.7

Retail Store Inventory Cover days 68219 35 37.9 14.4 17.0

On-Shelf/Point-of-Sale Out-of-Stocks % 76469 48 5.1 4.0 4.3

Lead Time hours 124601 82 61.7 37.1 48.3
Distribution Costs (% of sales value) % 123743 69 4.0 3.6 4.3
Invoice Accuracy - Master Data % 84613 52 94.9 96.4 91.3
Invoice Accuracy % 98055 75 86.3 91.7 88.4


Criterion – EUROPE MANUFACTURERS Sample Weighted Sample total revenue
Key Performance Indicators Units Avg US$m # Records
Service Level / Unit Fill Rate % 98.5 47005 58
On-Time Delivery % 96.3 43324 51
Manufacturer/Supplier's Finished Goods Inventory Cover days 39.2 43605 55
Retail Distribution Centre Inventory Cover days 22.0 17468 18
Retail Store Inventory Cover days 6.7 7823 7
On-Shelf/Point-of-Sale Out-of-Stocks % 5.9 31751 26
Lead Time hours 60.4 39205 53
Distribution Costs (% of sales value) % 5.1 40856 44
Invoice Accuracy - Master Data % 98.6 29160 27
Invoice Accuracy % 92.6 38083 48

Criterion EUROPE C&C / RETAILERS / WHOLESALERS Sample Weighted Sample total revenue
Key Performance Indicators Units Avg US$m # Records
Service Level / Unit Fill Rate % 93.4 85396 29
On-Time Delivery % 87.7 85396 29
Retail Distribution Centre Inventory Cover days 18.5 80615 23
Retail Store Inventory Cover days 41.9 60396 28
On-Shelf/Point-of-Sale Out-of-Stocks % 4.5 44718 22
Lead Time hours 62.4 85396 29
Distribution Costs (% of sales value) % 3.5 82887 25
Invoice Accuracy - Master Data % 92.9 55453 25
Invoice Accuracy Scorecard- ECR Europe Conf 2005 · Page %
Global 82.3 59972 27

Key Performance Indicators and Implementation Measures


We now have Benchmark Data to Establish GLOBAL
Goals, Timelines and Measure Real Progress
Implementation Measures 2004
Timeframe
Goal
Benchmark

% of consumer units allocated GTIN %
92.2 95 Jan 2008 Requires RSS

% of cases/cartons/inners allocated a GTIN %
74.9 95 Jan 2007 Gap is “inners”

% of pallets/unit loads labeled with SSCC %
65.7 80 Jan 2007

% of item exceptions to GTIN allocation guidelines %
3.0 < 1 Jan 2006 This is all about clean data

% of shipping or receiving locations that have been allocated %
a GLN
66.0 80 Jan 2007 Requires GLN allocation rules

% of orders transacted via EDI or XML %
86.9 85 Jan 2005

% of invoices transacted via EDI or XML %
82.8 85 Jan 2006

% of sales with synchronized master data between trading %
partners via standards compliant data pools
12.2 50 Jan 2007
From 13 – 26 in 05, 26 – 50 in 06
% of GTINs that are catalogued consistently with Global %
Product Classification Standards
10.0 80 Jan 2007

% of checkouts that can scan a 13 digit barcode %
99.9 99 Jan 2005

% of checkouts that can scan Reduced Space Symbology %
(RSS)
6.3 99 Jan 2008

What Goals, Timelines and Measures Will You Set for your Company /
Country / Business unit?
Implementation Measures WW 2004 WW Europe 2004
Benchmark Goal Benchmark Europe goal

% of consumer units allocated GTIN % 92.2 95 (1/08) 98.3

% of cases/cartons/inners allocated a GTIN % 74.9 95 (1/07) 91.3

% of pallets/unit loads labeled with SSCC % 65.7 80 39.8
(1/07)

% of item exceptions to GTIN allocation guidelines % 3.0 <1 1.1
(1/06)

% of shipping or receiving locations that have been % 66.0 80 82.1
allocated a GLN (1/07)

% of orders transacted via EDI or XML % 86.9 85 71.7
(1/05)

% of invoices transacted via EDI or XML % 82.8 85 66.1
(1/06)

% of sales with synchronized master data between trading partners % 12.2 50 20.8
via standards compliant data pools (1/07)

% of GTINs that are catalogued consistently with Global Product % 10.0 80 10.1
Classification Standards (1.07)

% of checkouts that can scan a 13 digit barcode % 99.9 99 100.0

% of checkouts that can scan Reduced Space Symbology (RSS) % 6.3 99 **
(1/08)


The same can be done with the Key Performance
Indicators
Key Performance Indicators - Benchmark Results

Sample Sample total My Weighted
Criterion Units Weighted Avg revenue US$m # Records Avg My Goal
Service Level / Unit Fill Rate % 95.2 132401 87 99.7
On-Time Delivery % 90.6 128720 80 96.4
Manufacturer/Supplier's Finished Goods Inventory Cover days 39.2 43605 55 37.3
Retail Distribution Centre Inventory Cover days 19.1 98083 41 23.2
Retail Store Inventory Cover days 37.9 68219 35 30.0
On-Shelf/Point-of-Sale Out-of-Stocks % 4.1 76469 48 6.2 <4%
Lead Time hours 41.8 124601 82 58.8 48
Distribution Costs (% of sales value) % 4.0 123743 69 5.0
Invoice Accuracy - Master Data % 95.1 83513 51 98.1
Invoice Accuracy % 86.5 98055 75 96.1

1. Performance Gaps can be identiﬁed
2. Objectives can be set

And now we can use the Global Scorecard to Identify
HOW to improve those results

Rita Marzian

Title: Metro Stores


Now That We Know WHAT Performance Measures Need to Improve
We Need to Understand HOW To Improve Them - The Best Practices

Lets start with a look at the demand side……

Collaborative Shopper Value Creation
1. Collaborative Information Management

Panel
Retailer Services
Market Research
Company
POS DATA

Capture and share
Consumer- and Shopper-
Data needed for joint Value
Qualitative creation Shopper
Data research

Consumer supplier 2
research

Research Agency
Supplier 1

Collaborative Shopper Value Creation
2. Shopper Targeting


Collaborative Shopper Value Creation –
Differentiated Solutions


Collaborative Shopper Value Creation –
Differentiated Solutions

Shopper loyalty Relationship based
management solutions

Category / brand Integrated value
management solutions


Supply Scorecard

Martin White


Supply Management

Focus
of expansion

Reliable operations is an increasingly relevant theme in a fast changing
business environment


Operational Excellence
We have enhanced the concept definition and the
definition of best practices today
Concept
it is about continuous improvement strategies and techniques
a focus on minimising service and quality defects e.g.out of stocks
Definitions
store operations
reflects emphasis to the shelf
need for compliance
drive to improve shopper availability
distribution
reflects increased use of track and trace
production
reflects practices of synchronisation and lot traceability


But the main focus is on two best practices
(1)Reliable stockloss and shrinkage management

From nothing planned – 0 there is limited awareness of the problem. There are no plans
Stock loss is not measured and
to alter stock loss measurement processes, to share information or to take individual or joint
proactive measures to reduce stock loss

To fully implemented - 4
Stock loss is tackled as a part of corporate policy, in a proactive manner. Within the
organisation there is a dedicated department for handling stock loss. The problem is
measured and analysed on a regular basis. A systematic plan to tackle shrinkage, both
individually and collaboratively, is in place, which is acted upon and regularly reviewed.
Optimisation of shopper satisfaction achieved through integrating markdown and loss
management with product availability

Applicable to known and unknown stockloss
Reflects practices from the ecr shrinkage group


(2)Reliable on–shelf availability management

From nothing planned - issue partners have no plans to tackle on-shelf availability,
Out-of-stock rate not known. Trading
because it is not seen as an
0

To fully implemented - 4
OSA is an integrated business process. Continuous measurement with automatic and alert
based data capture, regular root cause analysis and continuous actions based on consumer
value creation strategies is undertaken

Reflects the need to balance availability with a cost to serve and the
customer reaction
Best practice is a continuous real time process, fully linked to consumer
value creation – but is independent of the technologies required to do this


Enabler Changes

Chris Cave Jones
IBM


Enabler Changes


Use of product classification standards
The EAN.UCC Global Product Classification
(GPC) standards allow products to be grouped
into a standard hierarchy.
The business objectives of the standard are:
To support buying programmes by allowing buyers
to pre-select groups of applicable products.
To provide a common language for category
analysis, thus speeding up the ability to react to
consumer needs.
To be a key enabler of the data synchronisation
process

Electronic messages for supply

Advanced Shipment Notice Receipt Advice
Or
Despatch note Order
Invoice

Manufacturer Retailer


Electronic messages for CPFR

Sales History
Inventory

Manufacturer Retailer

Forecast


Electronic messages for data
synchronisation

GTINs plus all mandatory attributes
GLNs plus all mandatory attributes
Messages exchanged between users and
datapools, between data pools, with the single
item registry, between trading partners


Global Data Synchronisation

Registry 3. The registry holds this
basic information about all
items and the location of each
items’ source data pool.

Manufacturer
Data 2. The data pool sends very 4. A retailer will search the
registry, via a selected data pool,
Pool basic information about the
for an item (by GTIN or by
item to the Global Registry.
description). The registry returns
the details of the items to the data
pool.
1. A manufacturer will Data
publish item information to the Pool
source data pool.

5. The trading partners
synchronise the item information
between their respective data Retailer
pools.

This model supports a rich network of data pools.


Electronic Product Code


How the EPC network automates the supply chain


Web site demonstration

Chris Cave Jones
Associate Partner
IBM Business Consulting Services


Select your
language
Site fully translated

Full site translation
in progress

Some elements
translated
Getting Started


Introductory material
on
• ECR
• Key Performance
Indicators
• The different levels of
scorecard
• How to use the
scorecard
collaboratively with a
trading partner
• How to do
benchmarking
• How to customise
your scorecards and
KPIs


Guide to ECR
Improvement
Concepts

Click on the name
any of the
improvement
concepts to find out
more about it.


Scr
oll
D
Global Scorecard- ECR Europe Conf 2005 · Page o

Additional resources
section with links to
related sites or other
downloadable
material


Data synchronisation movie


Use Key
Performance
Indicators

“the What”


Insert new KPI
record


First enter your
profile data so your
KPIs can be
correctly registered

Enter your annual
revenue so that the
weighted average
can be calculated

New feature to allow
data to be entered
for a single country
or a region

Next
enter
your KPI
values

Click on the
KPI name if
you want to see
the definition

S
c
Global Scorecard- ECR Europe Conf 2005 · Page r

Here is where you enter
your Implementation
Measures

Optional KPIs for those
who want a wider range of
benchmarking measures

S
c
Global Scorecard- ECR Europe Conf 2005 · Page r

Click the “Save” button once
you have finished entering
your data


KPIs must be
submitted for error
checking before they
can be benchmarked


Next, we’ll use the
capability scorecards


First, we’ll
demonstrate the full
global scorecard


You have to enter a
scorecard before
you can do
benchmarking!


Enter your profile
data, then click
“Submit”


Enter your capability
scores by clicking on
the radio button

…or click on the
concept name to see
the scorecard details


Enter your capability
scores by clicking on
the radio button

Enter comments or
justification for the
score here


The GCI data entry
short cut combines
the Enablers section
of the full scorecard
with the KPIs and
the Implementation
Measures


Enter KPI
values
here then
scroll
down


Enter
Implementation
Measures, then
when ready click
“Submit”


I signed on to the
KPI section using
the P&G master user
name

I will now
demonstrate how to
benchmark KPIs


The P&G Master User can see
all the KPI records submitted
by each of his subsidiary users
as well as his own KPI
records.

He can select which records
he wants to include in the
benchmarking report


I selected to benchmark
against European KPI values

For manufacturers

And to display the
results in a table

I could have chosen to display
the results in a set of
distribution charts

Similar charts can be
produced for ECR Capability
scores

I will now demonstrate how to
use the Entry Level Scorecard
Collaboratively with a trading
partner


Enter a new joint scorecard


You have to know the master
user name of your trading
partner. Ask them if you don’t
know


Enter your profile data and then
select who you want to work with
at your trading partner


At the bottom, I enter my
proposed actions

I then click “Save” to save it as a
draft. My trading partner can’t
see the scorecard at this stage


After saving, I am returned to the
view screen and can submit the
scorecard to my trading partner
when ready.

My trading partner will get an
automatic e-mail telling him that a
scorecard has been submitted for
his attention


My trading partner signs on, and
then finds my scorecard in his
“Available Scorecards” list.
He clicks the “View” icon to see
Global Scorecard- ECR Europe Conf 2005 · Page it.

He reviews my scores and
comments

He can either choose to accept
them as is, or can edit them


At the bottom of the “Edit” screen
the trading partner can enter his
own comments

End then clicks “Save”


Status changes to “Edited By Partner”


I can review the trading partner’s
comments and the approve the
scorecard or edit again.


Status changed to Joint Confirmed


Now we will demonstrate using the
intermediate scorecard with a trading partner


The trading partner is selected, profile set up
then scores and comments entered using the
Intermediate Level Scorecard


Submit to trading partner when ready


My trading partner can see that I have created a scorecard,
but cannot view it until I have submitted it.
In the meantime he can start his own scorecard, by click in
the “Respond” button. His scorecard will be linked to mine


He completes his Intermediate Scorecard and
then clicks “Save”


Once both parties have submitted their
scorecards, we are ready for the workshop.

Once both parties are in the same room, we
can start the workshop.


My score, comments and actions are shown here

My trading partner’s score, comments and actions are
shown here
Our jointly agreed score, comments and actions are
entered during the workshop


The Sainsbury Master User can monitor the
state of all of the Intermediate Scorecards
whether under progress or completed


Intermediate Scorecarding in Action


The last area is for the deeper KPI
benchmarking systems


The Glosup programme allows retailers to
carry out deeper benchmarking analysis

Click here to apply to Templeton
College, Oxford University, for
membership of the programme

A full set of downloads is available on the site
APQC is an organisation which supports
standardised in-depth benchmarking of
business measures.


www.globalscorecard.net


Case Studies

1. How ECR South Africa Used the Global
Scorecard to Galvanize Action

2. How Metro is using the Global scorecard
3. P&G’s use of the Full Scorecard as a
collaboration tool


South Africa – Scorecard
in action

August Iwański
Chief Executive - CGCSA

Mission

To enable retailers, wholesalers,
manufacturers, logistics and service
providers in the South African Consumer
Packaged Goods industry to WORK
TOGETHER to meet consumer needs
better, faster, and at least cost.

Vision
 “A single voice, adding value”

Key activities

 Supply and Demand Chain efficiencies –
under the banner of ECR
 Crime Prevention Programme
 Global Standards including data
synchronisation and catalogue (PDC.za)
 Legal and Regulatory (non-competitive
issues including Food Safety)

Objectives
 Best practice processes
 To develop and promote best practice processes for joint
demand and supply management projects.
 EAN●UCC standards endorsed by GCI
 To support and disseminate the adoption of identification
and communication standards i.e. the Enablers and
Integrators (as agreed through EAN●UCC and endorsed
by the GCI) which enhance inter-company logistics and
increase efficiencies for trading partners.

Objectives (cont. 1)

 Industry research and education
 To improve market understanding of member
companies through industry research and
education.
 A voice for the industry
 To provide a voice for the industry to government
and other key bodies on all relevant industry,
legal & regulatory affairs.

Underlying principles

 Focus on the consumer
A commitment to the belief that sustained business
success stems only from providing consumers with
products and services that consistently meet or surpass
their demands and expectations.
 Working Together
The greatest consumer value can be offered only when
organisations work together, both internally and with
their trading partners, to overcome barriers that erode
efficiency and effectiveness.

South African FMCG Value Chain
Analysis (VCA)

 First study commissioned in 1999
 To determine the potential cost savings in the SA FMCG
Industry
 11 Manufacturers and 6 Wholesale / Retail participants
 Key Results
• Manufacturers were ahead of retailers
• R2.55 billion potential saving for consumers
• R5.1 billion potential saving in a once off inventory reduction

South African FMCG Value Chain
Analysis (VCA) cont. 1

 In 2004 a new study was commissioned
 To measure progress of ECR implementation in
the SA FMCG Industry
 To Identify opportunities for further improvement
 22 Manufacturers & 6 Retailers/Wholesalers

VCA Project - Purpose
 Snapshot - Determine the degree of implementation,
 Trend - Identify whether there has been progress
since the 1999 study
 Industry - Identify opportunities for industry initiatives
to implement improvements
 Benchmark - Allow participating organizations to
benchmark themselves against the SA FMCG industry,
as well as run global benchmarks
 Action - Help participants identify opportunities and
improvement potentials and specific action steps
 Trigger - Deliver a trigger for the SA industry to start
talking TO rather than AT one another

Working together
22 Manufacturers, 6 Retailers

National Brands

Sample Composition
22 Manufacturers, 6 Retailers/Wholesalers

Participant Composition

NB: Some participants have filled in more than one scorecard, as they
scored for several categories.

Survey Findings – Key
Performance Indicators
 The Supply Chain is neither lean nor efficient
 17 days more inventory in the SA Supply Chain
than the global
 Averages Case fill / service level is inadequate:
• Averages On time delivery: Manufacturers 90.2% vs.
retailers 87.3%, which means that 10-12% of deliveries
are late
 Unnecessary frictions in order cycle & sorting out
problems

Survey Findings – Key
Performance Indicators (cont. 1)
 Retailer DCs seem to not yet have yielded the expected
benefits
 Similar store inventory levels for DSD and DC replenished operations
 Supply Chain as a whole is not very responsive
 Long lead times / replenishment cycles, NDDs
 Average level out-of-stock on shelf is between 9 and 10%
 Supply Chain operates in a traditional push approach
 Despite pledges towards collaboration current business practices
between retailers and manufacturers remain predominantly “push” and
deal driven
 Performance measuring is not standardized or a regular
practice
 The South African FMCG industry needs to operationally a standard
set of performance measures which is continuously monitored,
reviewed and acted upon

1999 – 2004 – 2007 (total ECR)

80%
70%
60%
50%
Manufacturers
40% Retailers
30%
20%
10%
0%
1999 2004 2007
(target)

1999 – 2004 – 2007 (total ECR) cont. 1
 Since 1999 survey – ECR-SA implementation shows
moderate progress.
 Retailers embracing ECR principles slightly more than
manufacturers, both parties are virtually on par on overall
ECR score.
 Participants have indicated that over the next three years
they want to get from a piloting stage to the point where
the roll out of ECR principles is starting to yield real
benefits to the business.

ECR Europe Forum '05. Use the ECR scorecard to benchmark and improve your performance

2005 Action Steps

 CGCSA Board agreed to focus on 4
projects identified from the VCA
Analysis:
1. On Shelf Availability
2. Standardized Industry Key Performance
Indicators
3. Category Management Methodologies
4. Training and Skills Development

Lessons Learned
 Understanding of the principles depicted on the
scorecard is critical
 CEO Commitment essential
 Cross-functional team - directors and senior
management attendance at the workshop is
essential
 Choose the right partner/facilitator
 Adequate time is given for the completion of KPI’s
 Three workshops per company must be held

Lessons Learned (cont. 1)
 Enough time must be allocated after the
workshops to re-visit participating companies to
review data before presenting
 Do not compare against your local competitor –
benchmark against global
 Less is more
 Regular feedback
 Conduct the survey at least every 4-5 years to
monitor progress and keep top of mind

Finally, to conclude

Just do it!

Global Scorecard at the
METRO Group

Rita Marzian
METRO Group


What it started with

We have been doing ECR since the early 90‘s
We have seen many successful projects
Each project has it‘s individual KPI‘s
Numerous projects have become daily
processes

However….


What we did not really know:

How are we doing in our distribution lines?
How are we doing in our countries?
Do we really do as good as we think we do?
Where do we stand compared to the rest of
the industry?
Where can we still improve?
What areas do we need to address first?


Where can we find the answers?


That is what we did
Identify ‘Scorecard Ambassadors‘ in the various
distribution lines
Train people on using the Global Scorecard
Evaluate process maturity for demand, supply and
integrators
Collect KPI‘s and Implementation Measures
Fill in the Full Global Scorecard for Germany
Fill in the Compliance Scorecard for all our countries


First Results

Group wide we were equal to or above the
average in most of the areas
There are areas where we can do much
better:
Strengths and weaknesses differ by distribution
line and country
We need to push the application of enablers with
our business partners!!!


Current Status

Roll-Out of compliance scorecard under way
to all our countries across all distribution lines
Setting targets for implementation
Develop plans to implement the missing
pieces / drive implementation further


Time Permitting

Retailer Scorecard Use

The Sainsbury’s Journey


Sainsbury’s have been using the
scorecard over many years

Full global 20 suppliers
Intermediate 200 suppliers

Entry 2000 suppliers

The process has been integral to delivering sustained
collaborative improvements


Over the years many lessons have
been learnt

Senior level guidance, but user driven
Focus on process and getting people going,
not the quality of the scores and output
Overcome the fear factor
The benefit from each scorecard is different
Each relationship is unique


Over the years many lessons have
been learnt

The process works, but individuals will adapt
the process in a way that works for them
Set targets, then manage, monitor and
appraise
Creating “champions” encouraged healthy
competition and enthusiasm


Improvements came in many different
areas

In 2003 for example we reported on:
- produce supplier
- depot service level improvement 1.8%
- stock loss reduction 22%
- pack at source saving 1.5m euros
- wine supplier
-50% reduction in supply chain inventory
-10% improvement in forecast accuracy


With some suppliers this was a
Collaboration over many years
journey
Collaboration Facilitation of
journey Performance Review performance reviews
CPM
Benchmark Data
Scorecard Report
Management of Process Configuration
CPS Process & Business Rules

Alerting & Exceptions User Defined Alerts &
Exceptions
AR
M Data Publishing Reporting of KPI’s
PDS
GCI Entry Scorecard Collaborative
Scorecard Business Evaluation


Conclusions
Over the course of the journey the Sainsbury’s
team undertook:
Over 1000 scorecards
Over 2500 agreed, joint, actions
The real power lies in local benchmarking and
the development of improvement plans with
your trading partner
There is no excuse for not getting started


Time permitting

Procter & Gamble Case Study

Jim Flannery
Procter & Gamble


Using the tool to improve Business Results

A Practical Example of using the
scorecard to get started
Customer “A” / P&G

Can we find Common Ground to drive Better
Business Planning and Long Term Results?


So we got started..
These goals
Strengths included
Assessment & • Category Share
Weakness targets
• Inventory targets
• Cycle Time
• Data
Key Performance synchronization
Indicators

Opportunities
(Finding
Common Ground)

So we got started..

Strengths • Execute
Assessment &
Weakness
the
Plans
Joint Action Plans • Review
Results
Opportunities Prioritize
(Finding
Common Ground)

Review Results
Customer’s Market Share objectives exceeded
Category Management projects running
Shelf technology
Promotional Effectiveness
Weeks inventory reduced (P&G stock on hand
reduced by 2 weeks)
# of orders reduced
claims reduced from $120,000 to Nil !!
Order / delivery cycle time reduced by 3 days
Full Scorecard will be updated annually


Financial Results

Customer / P&G sales up 9% (Ahead of P&G’s
market growth & Retailer’s business)
P&G “Cost of business” down 2%
plus profits from added sales
Customer’s “Cost of business” down 3%-3.5%
Plus inventory savings & Cash flow improvement
Bottom line profit improvements for both
Customer and P&G


Global Scorecard results vs.
Operational Indices

150
Year 3
140

Year 2 Year 4
130
NOS Volume Index
Retailer's Gross Margin
120 P&G Profits

Year 1
110

100
209 318 520 369


Thank you

www.gci-net.org/gs
www.globalscorecard.net


ECR Europe Forum '05. Use the ECR scorecard to benchmark and improve your performance

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