ECR: een manier van denken en doen

flowerbulb.nl

ECR: een manier van denken en doen

EFFICIENT CONSUMER RESPONSEA way of working:TOGETHER


AGENDA• What did we learn from: Retail Analysis flowerbulbs 2004• ECR: background• Four focus areas• Starting with ECR• Additional information


The chain of the flowerbulbsand the points of interest in researchConsumercustomerFormulaBUYINGSalesBUYINGGROWINGGARDENDIYFOOD & WARENHouse


Consumer wishesThe consumer wants:• quality• good price• choice• service•fresh• convenienceHow can you realise everythingat the same time?


Market trends• Internationalisation• Competition• Stagnating market• Technological developments• Environmental issues• Transportation issues• Focus on core business


The Answer“Working together to fulfil consumerwishes better, faster and at less cost.”Common goals:• Improved efficiency in the supply chain• More value for the consumer


Trademarketing procesRETAILBusinessAnalysesSUPPLIERSTradecommunicationChanneldevelopmentCategorydevelopmentInstoreCommunicationCONSUMER


TM playgroundRETAIL: the shopper•Business analyses•Trade communication•CategorydevelopmentKnowledge&Skills•Consumer analyses•Category-/channeldevelopment• Instore communicationsKnowledgeSUPPLIERKnowledge&SkillsCONSUMER•Channel development


EFFICIENT CONSUMER RESPONSE• EFFICIENT: remove unnecessary costsfrom the supply chain.• CONSUMER: satisfying the consumeris in the best interest of the wholesupply chain.• RESPONSE: the consumer drives thesupply chain.


AGENDA• ECR: background• Four focus areas• Starting with ECR• Additional information


Working in the supply chainInformationGrower Supplier retailer consumerFlowerbulbs


Working TOGETHER in thesupply chainInformationGrower Supplier retailer consumerFlowerbulbs


Frequently Asked QuestionsIs ECR only for the food business?Is ECR difficult?Is ECR only for big companies?


Current status Netherlands• Change in business culture• Consumer at center of attention• A lot of projects have proved that theconcept works• Time for the step from projects totprocess


AGENDA• ECR: background• Four focus areas• How to start with ECR• Additional information


ECR focus areas1. Category Management 3. EnablersDemand Strategy & CapabilitiesOptimized AssortmentsOptimized ProductIntroductionsOptimized PromotionsConsumer ValueCreation2. Supply ManagementResponsive Supply Strategy Operational & Capabilities IntegratedReplenishment Excellence DemandResponsiveOperational IntegratedDrivenReplenishment Excellence DemandSupplyDriven SupplyCommon Data &Cost Communication / Profitan Standards ValueMeasurementCost / Profitand ValueMeasurement4. IntegratorsCollaborativePlanningForecasting &ReplenishmentE-Business B-to B-to B B


ECR focus areas1.Category ManagementDemand Strategy & CapabilitiesResponsive Supply Strategy Operational & Capabilities IntegratedReplenishment Excellence DemandResponsiveOperational IntegratedDrivenReplenishment Excellence DemandSupplyDriven SupplyEnablersCommon Data &Cost Communication / Profitan Standards ValueMeasurementCategory Management:Optimized Assortments Optimized PromotionsManufacturer and retailer workCost / Profittogether to provide an optimal offerOptimized ProductConsumer Value to the consumer. This includes and Value aIntroductionsCreation balanced assortment, Measurementrelevantpromotions and productSupply Management introductions which add value Integratorsforthe consumerCollaborativePlanningForecasting &ReplenishmentE-Business B-to B-to B B


CATEGORY MANAGEMENTBy sharing knowledge andexperiences manufacturer and retailerrealise:• Optimal assortment for the consumer• Effective promotions• Successful product introductions• More value for the consumer


CATEGORY MANAGEMENTCurrent subjects:• Promotion-evaluation• Day-to-Day Category Management• E-category management• Product introductions


CATEGORY MANAGEMENTExamples: BAT/Albert.nlAlbert.nl: : Sharing point-ofof-sale dataincreases understanding of consumer behaviour inspecific situation: assortment changed, turnoverincreased. The Greenery/C1000: Category Management fortomatoes: turnover rises with 35% Procter & Gamble/C1000: E-category Emanagement facilitates data exchange, analysisand creates more time for action.


ECR focus areasDemand Strategy & CapabilitiesOptimized AssortmentsOptimized ProductIntroductionsCategory Management2. Supply ManagementResponsive Supply Strategy Operational & Capabilities IntegratedReplenishment Excellence DemandResponsiveOperational IntegratedDrivenReplenishment Excellence DemandSupplyCommon Data &Supply management:Cost Communication / Profitan Standards ValueMeasurementManufacturer and retailer ensure thatOptimized Promotionstheir logistic streams match optimally. Inthis way it is possible Cost / to Profit replenish thestoreshelves in time with the rightConsumer Valueand Valueproducts in optimal quantities, atCreationMeasurementminimal costs.Driven SupplyEnablersIntegratorsCollaborativePlanningForecasting &ReplenishmentE-Business B-to B-to B B


SUPPLY MANAGEMENT• Demand driven supply: consumerdemand drives the supply chain• Stock management: drive inventoryout of the pipeline by better cooperationin the supply chain• Operational excellence: production isclosely aligned to consumer demand


SUPPLY MANAGEMENTDevelopments:Degree ofcollabor-ationCROSS DOCKINGVENDOR MANAGED INVENTORYCONTINUOUS REPLENISHMENTINTERNAL OPTIMALISATIONCOLLABORATIVEPLANNING,FORECASTING &REPLENISHMENTTime


SUPPLY MANAGEMENTCurrent themes:• Reducing out-of-stocks• Shrinkage• Packaging• Tracking & tracing


SUPPLY MANAGEMENTExamples: Vendor Managed Inventory at AKZO Coatingsreduces stock levels in the supply chain with 25-50% Synchronisation of the supply chain: supply chaincosts drop with up to 50% thanks to: lesshandling, less stock Combined inventory can lead to less handling andtransport costs. Various examples are in progress.


ECR focus areasCategory ManagementEnablers:Demand Strategy & Capabilities1. Communication standards and electronicalOptimized information-exchange Assortments facilitate Optimized supply Promotionschain collaboration.2. By calculating ECR effects it becomesOptimized Product clear which improvements Consumer are possible Value in theIntroductionsCreationsupply chain.Supply ManagementResponsive Supply Strategy Operational & Capabilities IntegratedReplenishment Excellence DemandResponsiveOperational IntegratedDrivenReplenishment Excellence DemandSupplyDriven Supply3.EnablersCommon Data &Cost Communication / Profitan Standards ValueMeasurementCost / Profitand ValueMeasurementIntegratorsCollaborativePlanningForecasting &ReplenishmentE-Business B-to B-to B B


ENABLERSCurrent THEMES:•EAN-DAS• EDI (Electronic Data Interchange)• Product classification• RFID (Smart barcode)• Direct Product Profitability


ENABLERSExamples:• Albert Heijn and suppliers of fresh products: Tracking& tracing with the EAN-128 label and EDIcommunication• RFID technology: new possibilities for supply chainmanagement (Metro Store and Wal-Mart)• EAN DAS: central data pool for non-commercialproduct data (size, weight, pack size): most retailersand manufacturers are connected


ECR focus areasDemand Strategy & CapabilitiesOptimized AssortmentsOptimized ProductIntroductionsCategory ManagementSupply ManagementINTEGRATORS:By Optimized integrating Promotionscollaboration in the areasof logistics, Category Management andIT, new Consumer possibilities Value arise to improve theservice to the consumer together.CreationResponsive Supply Strategy Operational & Capabilities IntegratedReplenishment Excellence DemandResponsiveOperational IntegratedDrivenReplenishment Excellence DemandSupplyDriven SupplyEnablersCommon Data &Cost Communication / Profitan Standards ValueMeasurementCost / Profitand ValueMeasurement4. IntegratorsCollaborativePlanningForecasting &ReplenishmentE-Business B-to B-to B B


INTEGRATORSCurrent themes:• Collaborative Planning, Forecasting &Replenishment (CPFR)• E-marketplaces (WWRE, GNX,Transora, CPGmarket)


INTEGRATORSEXAMPLES: Albert Heijn & Procter & Gamble testingCPFR: Start with improving currentprocesses Douwe Egberts & Laurus: use ‘light’’ CPFRto deal with specific issues Marketplaces develop collaborativesystems, , e.g. the WWRE offers CPFR


AGENDA• ECR: background• Four focus areas• Starting with ECR• Additional information


GETTING STARTED• Start with an internal evaluation:---• what can be improved? (the ECR Scorecard canhelp you with this)• what are the bottlenecks?• is it an internal or a joint subject?• Retailer feels that out-of-stocks are too high.


STARTING


GETTING STARTED• Select supply chain partner:---•commitment•trust• mutual dependence• Certain product category has more than average out-of-stocks levelduring promotions.• Chosen supplier for project is category captain and has done moreimprovement projects with the retailer.


GETTING STARTED• Choose subject:---• improvement potential• complexity• mutual subject• Reasons for out-of-stocks are researched.• Conclusion: Collaboration valuable for out-of-stocks duringpromotions (e.g. collaborative demand forecast).


GETTING STARTED• Start with a project:• define clear goals• gain experience on a small scale---• Define scope: out-of-stocks during promotions• Method: collaborative forecasting• Goal: reduction of out-of-stocks to max. 3%• Tests: measurements on 30 items during 2 years• Results: 4,2% in 2002 => 2,6% in 2004


GETTING STARTED• Evaluation of the project:• implementation?• follow-up project?---• Succesful results• Better forecast leads to less out-of-stocks• System support needed


GETTING STARTED• Implementation:• involve all disciplines• training for involved persons• user-friendliness of the solution• effectivity = functionality x acceptation---• Implement new promotion management system


GETTING STARTED• Evaluation of new situation:---• Stay focused• Compare: before and after• Further roll-out with other supply chainpartners?• Regular evaluation• Use new tools for effective monitoring


AGENDA• ECR: background• Four focus areas• Starting with ECR• Additional information


MORE INFORMATIONUseful websites:• www.ecrnet.org: Information and projects from ECREurope• www.ean-int.org: EAN international• www.autoidcenter.org: Latest developments in RFIDtechnology• www.globalscorecard.net: Global scorecard for yourown use• www.igd.com: UK’s retailing organisation, for news &background on European retailing


Example Praktiker Case:Category building and pricebuilding+Price and QualityOPrice€ 9,99The expensiveproductPrice€ 4,99The common everydayproducts for daily usePrice€ 2,99Price€ 0,99Cheap discount-likeproductsVolume +Special products forspecial purposesExample Praktiker classificationThe total salesgrowth was 30%!Label PrestigePrice up till € 9,9918% of the salesIt is a grow-category in whichthey want to invest.This is the big middle-segment in which they are active withthe Florel label. 80 to 90 sorts with the average price of €2,99.This division is good for 55% share of sales.Another 5% sales of “border-assortment” falls in this category.In the past they had 40 to 50 sorts cheap; nowadays only 12 sorts!These are ‘Preisanstieg’ products.This division is good for 22% of sales.

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