Plan, prvisions et approvisionnements concerts

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Using traceability in the supply chain to meet
consumer safety expectations
Brussels
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Agenda

• Introduction
• ECR Europe work context and facts
• Summary on content of the ECR Blue book
• Manufacturer and Retailer positioning
• Concrete examples of implementation of good
  practices
• Kraft International Commercial
• Cora
• Example of collaboration between a manufacturer
  and a retailer
• Panel discussion and Question Answers
• Conclusions

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Introduction - Context and facts

• Business requirements
• Legal requirements General Product Safety
  Directive and General Food Law
• March 2003 ECR Europe Board launched a core team
  under the initiative of ECR D-A-CH, France, Spain
• May 2003 Presentation of core team mission at
  the ECR Europe Conference in Berlin
• June 2003 - January 2004 Blue Book developed and
  validated
• 15th January 2004 Blue Book officially endorsed
  by 21 ECR National Organisations
• End January 2004 Blue Book as ECR Europe
  publication
• Today Breakout session at ECR Europe Conference
  in Brussels

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Content of the Blue Book main aspects addressed

• Chapter 4 Business needs
• Ensure consumer safety and confidence
• Protect brands, companies, product categories and
  the entire industry life
• Limit the impacts of crisis by a joint efficient
  management
• Efficiency comes from collaboration and common
  practices
• Chapter 5 Legal requirements
• Traceability and flow of information (as a tool
  to protect consumer safety)
• Product withdrawal and recall and therefore
  crisis management procedures
• Chapter 6 Traceability Technology Process and
  solutions
• Chapter 7 Incident / crisis management,
  withdrawal and recall processes
• Key business rules along the Blue Book

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As a manufacturer

• Nestle supports Blue Book
• Pragmatic approach to a European and even Global
  Process
• Common framework and guidance to all companies
• Promotes collaboration

The Blue Book enables the one step down, one
step up approach for all companies independently
of their size
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Carrefour and food safety vs EU

• Food safety is non negociable, the precautionary
  principle must be applied where it is necessary
  for consumer safety and health
• Traceability is a fundamental tool for food
  safety but it is also used to improve daily
  operational performances
• ? Carrefour supports legal obligation of results
  and pledges for a voluntary approach of liberty
  of means

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Carrefour and traceability systems

• Traceability must be seen in an evolutionary,
  voluntary context in partnership with every
  players involved, taking into account management
  and/or administrative and/or logistics and/or
  economics and public health objectives
• Carrefour develops systems of products
  specifications management, of logistics
  management, of crisis management which have
  proved their global efficiency. SSCC and EAN-128
  are pragmatic examples
• ? Carrefour supports Blue Book in a voluntary
  context in technological development, taking into
  account, according to food safety requirements,
  specific objectives of the different sectors of
  activities involved

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Carrefour for its consumers with its business
partners

• Traceability applied today by Carrefour allows us
  to guarantee to our consumers fast and efficient
  quarantines, withdrawals and recalls
• Carrefour develops with its business partners
  targeted quarantines, withdrawals and recalls
  taking into account public health (precautionary
  principle), business and economical criteria
• ? Carrefour guarantees first and foremost food
  safety for its consumers, then Carrefour takes
  into account the business context and partners
  economical concerns (contractual)

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Coming Up

• Case study manufacturer
• Kraft International Commercial
• Case study retailer
• Cora

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Kraft International Commercial

• Ronald Grube

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Traceability and Technology Process and Solution

• Practical case profile
• The object Plant buffer whs. and Distribution
  Center in Disena
• Storage equipment conventional rack storage
  block storage
• Material type stored FG,RM,PM,PoS
• Capacity data 10.000 pallets available capacity
• The mission implement efficient traceability
  procedures that fit perfectly into our global
  supply network and sensitise the traceability
  aspect
• The challenge consider different technological
  levels at different sites
• The tools ECR Standard solutions based on
  EAN.UCC Standards

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Traceability and Technology Process and Solution
Migration plan The 8 important steps
Test Run!

• EDI

• Labels

implementation

• Lot Codes

• Identification

• Scorecard

• Assessment

analysis

• SCOPE

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Traceability and Technology Process and Solution
The scope a question of interfaces . . .
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Traceability and Technology Process and Solution
Assess a micro-cosmos your warehouse!
For every flow
? Unique identification ? Data communication ?
Data capture ? Data link management ?
EDI Infrastructure . . .
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Traceability and Technology Process and Solution
Key learning Scorecards are useful

• Use scorecards to measure the degree of
  implementation achieved and compliance
• Identify and document the steps required to
  implement a change programme and achieve best
  practice with the following possible impacts
• Organisational changes
• Investment in technology

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Traceability and Technology Process and Solution
Scorecard results the initial situation

• Traceability is based on manual procedures (e.g
  filing delivery notes)

• We need fast reliable answers to
• What has been received and send out ?
• From whom goods were received and to whom had
  they been delivered ?

• To consider risk of mistakes for initial
  situation is high and even increasing with a
  higher shipping volume

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Traceability and Technology Process and Solution
Unique identification of locations and products

• GLN identifies legal, functional and physical
  entities with a unique identifier and is key
  concept in EDI
• GTIN must be allocated to each product
• GTIN changing based on GCI allocation rules

GLN
GTIN for SKU
GTIN for CU
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Traceability and Technology Process and Solution

• Implement the linkage of unique product
  identification with a lot code

• A lot code is necessary at any point in the
  supply chain
• A lot code should never be manipulated or changed

Example of lot code structure
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Traceability and Technology Process and Solution
Logistics label the serial shipping container
code (SSCC)

• Any pallet needs to carry an SSCC
• Implement EAN.UCC pallet label toguarantee
  common design
• Ensure product identification integrity

Lot code
GTIN of SKU
SSCC
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Traceability and Technology Process and Solution

• The edge electronic data interchange

Applicable EAN.UCC standards are EANCOM and
EAN.UCC XML messages EANCOM Despatch advice EDI
message is the enabler for efficient
traceability Each physical movement of a product
is linked to a transactional flow

Message
Pallet with SSCC
SSCC scanned
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Traceability and Technology Process and Solution
Test run (the mock- recall)
Can your warehouse tell you exactly and on time
for a randomly chosen product - how much was
delivered to the warehouse and when? - how much
is still remaining in the warehouse? - how much
and to which customer has it been dispatched?

Example of a sequence diagramm visualising a test
run
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• The figures
• Planning time 4 months
• Time needed to migrate 6 months
• Implementation core team 4 6 FTE
• Investment 10 20 of WMS project cost

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Traceability and Technology Process and Solution
The efficiency of the traceability network is
determined by its weakest link. Every single
component of your supply chain must be in line
with defined traceability processes and solutions
- do not forget the THE DEVIL IS IN THE DETAIL
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CORA

• Gérard Ferry

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ECR France and Cora support the Blue book

• AUCHAN, BONGRAIN SA, Brasseries KRONENBOURG,
• CARREFOUR France, CASINO, COCA COLA, COGESAL
  MIKO,
• COLGATE PALMOLIVE, CORA, DANONE (EVIAN VOLVIC),
• DANONE Groupe, DECATHLON, DUCROS SA, EASYDIS,
• ELVIR, Fromageries BEL, GENCOD EAN France,
  GEORGIA-
• PACIFIC France, Gilbert LEMELLE, KELLOGG'S
  Produits
• Alimentaires, KRAFT FOODS France, LACTALIS, LEVER
• FABERGE France, L'OREAL, METRO, NESTLE Produits
• Laitiers Frais SA, NESTLE WATERS France, PANZANI,
• PEPSICO France, PROCTER GAMBLE, SOLINEST,
  SYSTEME
• U, SYSTEME U OUEST, UNILEVER BESTFOODS France,
• YOPLAIT.
• Coordination with the following French
  organisations FCD, ANIA, Gencod EAN France,
  AFNOR, AFISE, CFA, CFCA, and public agencies

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Definitions (1)

• Definition of an incident
• An incident is any situation, that might imply a
  real, presumed or perceived product safety or
  serious quality deviation from legal requirements
  and / or internal quality norms
• Definition of a crisis
• It is any incident situation where there is
  reason to believe that a product distributed in
  the supply chain or placed on the market may be
  injurious to human or animal health and /or to
  environment protection, and / or have serious
  negative impact on the business organisation and
  / or image of the company

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Definitions (2)

• Withdrawal
• shall mean any measure aimed at preventing the
  distribution, display and offer of a product
  dangerous to the consumer
• Recall
• shall mean any measure aimed at achieving the
  return of a dangerous product that has already
  been supplied or made available to consumers by
  the producer or distributor
• from Directive 2001/95/EC

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Recommendations on organisation, documentation
and training

• Organisation to have in place to efficiently
  withdraw/recall a product
• Defined responsibilities
• Contact list (internal/external)
• Documentation
• Internal documentation
• Personal skills
• Training
• Self assessment
• ? Procedures, roles and responsibilities are to
  be documented in prevention of an incident, not
  in reaction to an incident

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Recommendations on responsibilities at each
organisational level

• Crisis management at company level is coordinated
  by a crisis management group
• This group is headed by one central crisis
  coordinator
• The crisis management group is the committee
  responsible for deciding and controlling the
  actions
• ? At the start of a crisis, the organisational
  requirements for dealing with incident management
  in the firm's organisational hierarchy must be in
  place

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Recommendations on contact list
(internal/external)

• Contact list must always be complete and
  up-to-date
• The list must include
• all contact options both during and outside
  office hours
• substitutes in case one of the people responsible
  is not available
• The list must be made available
• at a suitable place (e.g. the firm's intranet,
  posters)
• to enable access mainly outside office hours
• ? If the product in question has already left the
  firm's own organisation, the external partners
  involved must be contacted

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Recommendations on ethical code

• Four principles
• Co-operation and co-ordinated action
• Provision resources throughout the chain
• Non-use of crisis situations as support to
  marketing actions
• Communication
• Apply the golden rules
• ? Companies are committed not to deliver
  communication to the media that refer to third
  party companies without having previously
  co-ordinated it

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Is your company ready? Self assessment scorecard
0 No action taken 1 Plans have been established
but the work has not started 2 Implementation
has started with a limited scope (e.g. some
product categories) 3 Roll-out of full
implementation has started 4 Plans fully
implemented
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Cora experiences

• More than 250 alerts and withdrawals per year,
  around one per day
• 2 to 5 recalls per year (food and non- food)

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How to manage a crisis? Coras vision
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Preventing crisis

• Four recommendations
• Implementation of a (cheap) phone number (ie n
  azur)
• Updating names of the people to contact in case
  of crisis
• Permanence of email addresses and phone numbers
• Commitment to insure products quality and
  traceability

Notification in the trade terms (selling and
buying) of the companies
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How to manage a crisis? Coras vision
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Alert crisis or incident?
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How to manage a crisis? Coras vision
Crisis
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Managing crisis

• Withdrawal
• Recall
• Freezing (quarantine)
• shall mean any temporary measure aimed at
  freezing the products shipment in the supply
  chain and not to deliver them to the consumer
  during an agreed time period. After analysis, the
  following choices can be taken the product
  de-freezing (put back for sale) or its withdrawal
  (ECR France proposal)

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How to inform rapidly and effectively our partner?

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Products flow reverse logistics
PoS by DSD
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How to manage a crisis? Coras vision
Crisis
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Collaborative approach
Cora and Nestlé
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Experience in 2003 in France

• Nestlé Quality Management detected a "plastic
  foreign body" in a product already distributed to
  the Trade
• Crisis Team alerted
• Assessment
• What is it?
• Is it dangerous to consumers? (NO)
• Who received the product?
• Should we alert our Customers? (YES)
• Communication developed
• Customers contacted
• Not serious issue but Nestlé decision to withdraw
  the product
• No need to remove the product from the shelves,
  only DCs
• Product, Batch number, pallet numbers (SSCC),
  Distribution Centres

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Experience in 2003 in France - 2

• Dialogue between Cora and Nestlé Teams
• Better understand the issue
• Further information sharing
• Cora Internal assessment of the issue reported
• Withdraw the product from the distribution
  centres only ?
• Cora's usual way of dealing with incidents
• Common Cora / Nestlé decision
• Withdraw the product from distribution centres
  and shelves
• Common agreement on the event is now over
• Archive

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Experience in 2003 in France - 3

• Key learning and recommendations
• Even if minor issue, do not underestimate it and
  treat it as an incident
• The experience shows
• Each retailers is different in terms of
  organisation and internal process
• Need for regular discussions / meetings in order
  to understand each other ways of working and
  align as much as possible the approach
• at least one meeting per year where information
  is shared what's new? proposals for improvement,
  etc.
• The absolute need for regular joint exercises
• The absolute need to take stock of the way each
  issue / alert / incident was managed in order to
  improve

Nothing really new It is documented in the ECR
Europe Blue Book
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Panel discussions and Q A

• Facilitated by Saliha BARLATEY

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Key message and conclusion

• Saliha BARLATEY

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ECR Europe Core Team's Key message

• As a Project Team, we have done our very best
• Help us to ensure the implementation of this
  European best practice
• In your own company
• By your trading partners (co-manufacturers,
  co-packers, suppliers, third party logistics
  solution providers)

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Just contact...

• ECR Europe secretariat
• ecr_at_ecreurope.com
• ECR D-A-CH - CCG
• Ruediger HAGEDORN
• Email ecr_at_ccg.de
• ECR France
• Olivier LABASSE
• Email ecr.france_at_wanadoo.fr
• ECR Spain - AECOC
• Jordi MUR
• Email info_at_aecoc.es

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Many thanks to ...

• ECR Europe Core and Validation Teams
• And to the 84 companies, which have contributed
  to the Blue Book

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ECR Europe Traceability Core Team
Saliha BARLATEY NESTLE Europe,
Chairman Philipp BOTZENHARDT ECR D-A-CH Hugo
BYRNES CIES Géraldine FOUQUE ECR
FRANCE Ronald GRUBE KRAFT FOODS Ruediger
HAGEDORN ECR D-A-CH Ingemar HANSSON ECR
SWEDEN Olivier LABASSE ECR FRANCE Jürgen
MATERN METRO Miodrag MITIC EAN
INTERNATIONAL Jordi MUR AECOC, ECR Spain