Bill Bishop

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Bill Bishop

• President
• Willard Bishop Consulting, Inc.

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Scan Based Trading
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Conference Survey

• What is the Biggest Barrier toScan-Based
  Trading?
• 40 Synchronization of Data
• 10 Cost of Technology
• 20 All of the Above

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Conference Survey

• Retailer, When Will Your Company Adopt Scan-Based
  Trading?
• 20 Currently Engaged in SBT
• 50 1-3 Years
• 20 3-5 Years

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Session Objective

• To provide an update on SBT and to showcase how a
  leading grocery manufacturer is using the tool to
  create win/win situations with key customers

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Do Retailers Believe That SBT Can Drive
Incremental Magazine Sales?
Retailers
Wholesalers/National Distributors
Do you believe SBT can drive incremental sales?
Do retailers believe that SBT can drive
incremental sales?
100 Yes
Yes
No
80 20
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SBT Barriers

• What is preventing SBT from moving forward?

Size of Barrier
Size of Barrier
Wholesalers/National Distributors/Publishers
Retailers
Barriers
2 2 2 3 3 2 1 1
Cost of SBT Pilot Cost of Implementation Unclear
ROI SBT Complexity Internal Systems Lack of
Understanding Time/Resources Required Not a
Company Priority
2 1 3 2 3 1 2 3
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SBT Committee

• Steve Burbridge
• Carol Kloster
• Larry Scheur
• Mike Gillen
• Rick Wietzel
• Robert Kerekes
• Stephanie Justice

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What Well Cover

• This session will include
• A presentation that will give you insights into
  how a leading manufacturer, i.e., Dreyers
  Corporation, approached SBT and used it to
  produce stronger win/win relationships with key
  customers.
• Follow-up panel discussion including guest
  speakers and magazine industry executives

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Mike Corby
Stephanie Justice
President CA Consulting Services
Senior Vice President Information B2B
Services CMG
Carol Kloster
John Shreve
President CEO Chas Levy Company
Manager Scan BasedTrading Development Dreyers
Corporation
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Scan Based Trading
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Dreyers Grand Ice Cream

• Largest Ice Cream Company
• in U.S.
• 36,500 Customers
• Over 1,000 DSD Routes
• DA Routes
• Sales Routes
• Merchandising Routes
• Over 450 Skus
• Our Products include
• Dreyers / Edys
• Dreamery
• Starbucks
• Godiva
• Whole Fruit Sorbet
• Partner Brands
• Nestle
• Ben Jerry
• Healthy Choice
• Silhouette

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SBT Background

• First Pilot 1994
• Safeway Northern California
• Current Participants
• 28 Retail Divisions Nationally
• Critical Mass Achievement
• Northern California - 76 of stops
• Southern California - 87 of stops
• Future Growth in 2003
• Opportunity for critical mass in 3 additional
  profit centers
• Participation in growth stage with National
  Retailer

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SBT Background
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Win/Win Proposition

• SBT Benefits exist in all areas of our business
• Distribution Benefit
• No Check-In for deliveries
• No Receiving Window
• Improved product quality
• Sales Marketing
• Scan Sales for Order Forecasting
• Micro-Marketing opportunities for flavor
  selection and optimized service

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Win/Win Proposition

• SBT Benefits exist in all areas of our business
• Accounting
• Reduction in invoice discrepancies through
  synchronization
• Aligns payment with Consumer Purchase
• Information Systems
• Aligned Technology to exchange information
  between the retailer and supplier
• Valuable sale data to support Next Generation
  projects

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Investment for Success

• Retail
• I.S. Investment to support collection of data and
  exchanging of files
• Enhancement to accounting system
• Training at store operation level
• Front end register enhancement

• Supplier
• Dedicated person to monitor flow of data
• Dedicated auditors to track inventory
• I.S. Investment to support collection of data and
  exchanging of files
• Inventory tracking program

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Key steps to Managing SBT

• Daily review of Scan Data
• Identify missing sales by store
• Ensure all active items are scanning
• Weekly review of Scan data
• Flow of Del Vs. Scan units by store
• Flow of Del Vs. Scan units by UPC by week
• Physical Audits
• Monthly for Management of inventory shrink
• Quarterly for shrink reconciliation with customer

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Identifying inventory shrink ...
Is the first step to controlling shrink
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How can you be successful at SBT

• Retailer and Supplier must be partners in this
  initiative
• Operation teams must be ready for change
• Proven Practices at the operation level
• Technical support is critical
• Open lines of communication when a breakdown in
  the process occurs
• Small start to prove concept and identify
  potential risks

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In Closing ...

• SBT is a growing initiative in the grocery retail
  industry
• Dreyers Grand Ice Cream has created a Win/Win
  proposition for their business
• In order to make this work you must find the
  Win/Win for your industry
• You dont have to be good to start,
• but you have to start to be good

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Mike Corby

• President
• CA Consulting Services

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Key Points for Consideration

• SBT as a Fundamental Change
• Trust is the Barrier to Adoption
• Invest in Ownership
• Create a Win/Win
• Separating Wheat from Chaff
• A visit to Mt.Olympus
• Building Broader Relationships
• Conclusions

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Whats your perspective?
Magazine Cover or Content?
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Fundamental Change

• SBT is not solely a technology project.
• SBT was created to solve a business need.
• SBT may be only one possible solution.
• Starting at the solution and working back.

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Trust is the Barrier to Adoption

• Shrink is the Monster in the closet.
• When beginning an SBT relationship, over
  communicate.
• Openly discuss key concerns with your trading
  partner and develop mutually acceptable
  resolutions.
• Dont wait for the building to catch fire before
  practicing a fire drill!

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Adequately Managed

• New processes often involve shifting of costs.
  For example
• Lower accounting or clerical costs are achieved
  through technology investments.
• With SBT, some of the realized savings must be
  reinvested.

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Invest in Ownership

• SBT is a business process which must be managed
  similar to any other.
• It must be adequately resourced and actively
  managed.
• Each party should appoint someone who owns SBT.

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Create a Win/Win

• Carefully determine the benefits and the costs.
• If SBT cannot deliver a win/win opportunity for
  both parties, search for a better solution.
• Understand the key business points required to
  make this process successful to your operation
  and do not compromise from them.
• Be sure both parties have some skin in the game.

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Separating Wheat from Chaff

• Separate SBT issues from non-SBT issues
• Often the SBT process forces you to face issues
  that preexisted SBT by years.
• Example

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A Visit to Mt. Olympus

• Start your discussions at the top.
• CEO, SVP, etc.
• SBT Requires Strategic Thought
• A fundamental business change
• Requires broad organizational cooperation
• SBT Requires Binding Agreements
• Contracts must be both binding and enforceable.

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Building Broader Relationships

• Expanded interaction beyond the traditional
  buyer/seller relationship.
• Collaboration between technology groups.
• Broader dialogue between the financial and
  accounting groups from both companies.
• Improved communication between operating groups.

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Conclusion

• SBT is a viable business process delivering
  positive results today.
• The SBT process requires active management
  oversight.
• Mistrust can be overcome.
• Dont let SBT be confused with preexisting
  problems.
• Work from the top down.

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Conclusion

• In the new business era, it is those companies
  that can put aside mistrust and work
  collaboratively toward a better model that will
  succeed.
• It is not the strongest of the species that
  survive, nor the most intelligent, but the one
  most responsive to change. - Charles Darwin

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Do you view SBT as this
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Or this?
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Thank You
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Scan Based Trading