Co-chairs%20ECR%20Education%20and%20Communication%20Committee

1
Welcome

• Co-chairs ECR Education and Communication
  Committee
• Anthony Longo, President CEO, Longo
  Brothers Fruit
• Markets
• David Shaw, President CEO, Pepsi-Cola
  Canada
• Beverages, a Division
  of Pepsi-Cola Canada
• Ltd.

2
Canadian ECR InitiativeThe Nuts and Bolts of
Implementation

• September 24, 1998
• Presented by ECR Steering Committee Co-chairs
• Lawrence Strong, President CEO, Unilever
  Canada Limited
• Allister Graham, Chairman CEO, The Oshawa
  Group Limited

3
ECR Sponsors
4
ECR INDUSTRY MODEL INVOLVEMENT / COMMITMENT
Non Proprietary
Proprietary
5
ECR INDUSTRY MODEL INVOLVEMENT / COMMITMENT
Non Proprietary
Proprietary

• Category Management
• CRP

• Barcode Standards
• EDI Standards
• Unsaleables Solution

6
ECR INDUSTRY MODEL INVOLVEMENT / COMMITMENT
Non Proprietary
Proprietary

• COMMITMENT to Implementation
• Common industry priorities
• Agreed to industry action plan

• COMMITMENT to Information Sharing on best
  practices

7
ECR Enablers
HIGH Commitment Implementation Initiatives

• Scan Data Integrity
• Case Barcoding Critical Mass Target

8
ECR Enablers
HIGH Commitment Implementation Initiatives

• Scan Data Integrity
• Case Barcoding Critical Mass Target
• Establishment of Electronic Commerce Council

9
ECR Enablers
HIGH Commitment Implementation Initiatives

• Scan Data Integrity
• Case Barcoding Critical Mass Target
• Establishment of Electronic Commerce Council
• EDI Standards Compliance Critical Mass Targets

10
ECR Enablers
HIGH Commitment Implementation Initiatives

• Scan Data Integrity
• Case Barcoding Critical Mass Target
• Establishment of Electronic Commerce Council
• EDI Standards Compliance Critical Mass Targets
• Industry Unsaleables Solution Implementation

11
ECR Enablers
HIGH Commitment Implementation Initiatives

• Scan Data Integrity
• Case Barcoding Critical Mass Target
• Establishment of Electronic Commerce Council
• EDI Standards Compliance Critical Mass Targets
• Industry Unsaleables Solution Implementation
• Scorecard Benchmarking System

12
ECR Enablers
HIGH Commitment Implementation Initiatives

• Scan Data Integrity
• Case Barcoding Critical Mass Target
• Establishment of Electronic Commerce Council
• EDI Standards Compliance Critical Mass Targets
• Industry Unsaleables Solution Implementation
• Scorecard Benchmarking System
• Canadian Space Databank Foundation Transfer to
  Create Industry Online Product Catalogue

13
ECR Enablers
ECR Leadership has Started Other Industry
Initiatives

• Efficient Foodservice Response (EFR)
• Drug Industry (ECRx)
• HealthCare (EHCR)

Electronic Commerce Council Hosts WEBSITES for
ECR, EFR, ECRx, EHCR
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ECR YEAR 2000 VISION
15
Key Messages for the Future

• ECR continues to evolve
• ECR institutionalized in companies
• ECR now a global initiative
• ECR benefits need re-enforcement
• ECR will drive Activity-Based Costing
• Consumer Wins!

16
ECR Sponsors
17
Scorecard Committee Report

• September 24, 1998
• Presented by ECR Industry Scorecard Committee
  Co-Chairs
• Irene Rosenfeld, President, Kraft Canada Inc.
• Doug Stewart, Vice Chairman CEO,
  Sobeys Inc.

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Scorecard Design Objectives

• Keep it Simple
• Focus on Canadian Enabler Initiatives
• Use Website Data Collection and Password
  Protection for Data Security

Two Types of Information
Level of ECR Implementation Scoring
Critical Mass Implementation Statistics
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Scorecard Focus

• With Five Views
• 1. EDI IMPLEMENTATION
• 2. BARCODING IMPLEMENTATION
• 3. REPLENISHMENT PROCESS IMPLEMENTATION
• 4. CONTINUOUS REPLENISHMENT (CRP)
• 5. CUSTOMER SERVICE IMPLEMENTATION

To Evaluate Total Efficient Replenishment
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Canadian Scorecard Objectives
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Canadian Scorecard Objectives
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Canadian Scorecard Objectives
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Scorecard Utilization Recommendations

• Individual Company Self -Assessment
• Annual Reviews to track Progress
• Generate Action Plans with
• Internal Multi-Functional Teams
• Distribution / Logistics / Customer Service
• Merchandising / Marketing
• Systems / Finance
• Manufacturing
• Senior Management

24
Scorecard Utilization Recommendations

• Trading Partner Cross - Assessment
• Initiate Trading Partner Dialogue by Exchanging
  Self-Assessment Scorecards
• Annual Business Review meetings of
  Multi-Functional Teams to develop mutual ECR
  Implementation Action Plans

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The ECR Steering CommitteeInvites You to Score
Yourself

• Check it out www.ecr.ca

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ECR Unsaleables Committee - Progress Report

• September 24, 1998
• Presented by ECR Unsaleables Committee Co-Chairs
  
• Al Graham, Chairman CEO, The Oshawa Group
  Limited
• Brian Mirsky, President, Campbell Soup Company
  Ltd

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Lets Review A Case for Change

• Trading Partners
• Were not satisfied with previous joint industry
  recommendations
• No incentive to reduce the incidence of
  unsaleables.
• Distributors
• Did not feel they were adequately compensated.
• The handling rate did not cover their costs.
• Manufacturers
• Saw unsaleables as ever increasing cost with no
  accountability.

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ECR Vision - to eliminate / minimize unsaleables
in the supply chain

• ECR Unsaleables Recommendation - Objective
• To facilitate a cost effective reduction in the
  incidence of unsaleables products through fair
  and equitable practices.

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ECR Unsaleables Solution - Principles

• Be compatible with the philosophy principles of
  ECR
• Address resolve issues in a least cost manner,
  with an
• Accountability a monitoring-audit capability.
• Unacceptable practices should bear the cost
• Not for profit solution.

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ECR Unsaleables Solution - Components

• Recommendation includes handling rates which more
  accurately reflects distributors costs.
• Distributor compensation for unsaleables is
  determined by performance versus a declining
  industry benchmark.

31
Whats new in 1998.. Progress report

• CCGD Board endorsed the recommendation.
• November 24, 1997 FCPMC members voted yes
• January 1, 1998 - Ontario Roll-out began
• March 1, 1998 - Users Guide published
• July 21, 1998 - Joint industry recommendation for
  a National Roll-out to commence November 1, 1998.

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So How Are We Doing So Far?
33
Top Line Observations of the Ontario Roll-out

• Prior to the roll-out, the average rate of
  incidence for the industry was measured at 15
  items / 10,000 retail sales.
• Three distributors are currently participating in
  the Ontario roll-out.
• All 3 are performing below the current industry
  benchmark of 13 items / 10,000 retail sales.
• Representing collective performance 13 below the
  previous years industry average.

34
There is a Lot of Work Still to be done.
35
Next Steps

• National Roll-out to begin November 1, 1998.
• Regional Seminars will be conducted during
  October / November
• Evaluation of 1998 Ontario roll out
• evaluation of handling rates and,
• declining benchmarks going forward
• Work groups to address product categories outside
  the current recommendation.

36
Next Steps continued
Further
development of the trading partners roles

• We now have actionable data the incentive to
  act on it.
• Trading partners will have to initiate dialogues
  to address identified issues.

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What can you do next?

• If you havent already, buy a Users Guide.
• Attend the breakout session.
• Who should attend?

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Barcoding and EDI Implementation

• September 24, 1998
• Presented by
• Dave Morton, President CEO, The Quaker Oats
• Company of Canada Limited
• Nick Jennery, President CEO, CCGD.

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Canadian Barcode Initiative

• Selling Unit
• Case
• Pallet

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Canadian Selling UnitBarcode Initiative

• Progress strong with accuracy 99
• Validation procedures in place
• Driving efficiency in Canadian Industry

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Canadian CaseBarcode Initiative

• Current Situation
• Required to drive efficiencies
• Warehouse receiving
• Warehouse picking accuracy
• D.S.D. receiving
• Canadian Standard case bar code one side
• Some distributors live - others investing
• Industry agreed Compliance Date September 98

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Canadian CaseBarcode Initiative

• Current Issues
• May survey - 60 cases with bar codes
• Efficiency require critical mass
• Some suppliers hesitate to invest
• Quality/Accuracy an ongoing challenge

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Canadian CaseBarcode Initiative

• Next Steps
• Grace period established to January, 1999
• All Distributors will take the action required
  to ensure compliance to the January 1999
  deadlines
• Cost recovery a real possibility

44
Canadian Pallet License Plate/ASN Initiative

• Part of Canadian Supply Chain Vision
• Supports efficient distribution/receiving/warehous
  ing
• Each pallet Bar Coded with license plate
• Supported by Advanced Ship Notice Transaction

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Canadian IndustryEDI Overview

• EDI A Key Enabler To Overall Supply Chain Cost
  Reduction

• Provides accurate and timely information
• Reduces manual effort
• Eliminates many errors
• Supports many ECR initiatives

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Canadian IndustryEDI Overview

• Current Status
• Canadian Industry Progress - Unsatisfactory
• Limited to P.O. and Invoices
• Advanced practitioners few - little benefit
• Key Industry Issue - Critical Mass
• Broad EDI transaction base
• Wide partner usage

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Canadian IndustryEDI Overview

• Barrier to Development
• Benefits unique/tough to quantify
• Large - long-term investment
• Competing corporate priorities - Year 2000
• Multiple versions - Labour intensive
• Overall - Lack of future vision

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Canadian IndustryEDI Overview

• Key Initiatives
• 1) Industry Adoption VICs 4010
• Year 2000 capable
• General merchandising standard
• Canadian Industry Implementation Guide
• Broad Industry endorsement

May 1999 Conversion Deadline
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ECR Canadian Grocery Industry Migration Schedule
to EDI VICS-4010 StandardLatest Scheduled Date
Is To Be May 1999
Indicate in the appropriate box
the planned date for moving to
Parmalat Canada Ltd.
The Quaker Oats Co.
Pepsi-Cola Canada
Proctor Gamble
Unilever Cda. Ltd.
the EDI-4010 standard for each
Kraft Canada Inc.
FBI Brands Ltd.
Coca-Cola Ltd.
trading partner
of Cda. Ltd.
Culinar Inc.
Inc.
Ltd
Canada Safeway Ltd.
Co-op Atlantic
Federated Co-operators Ltd.
Great AP Co. Canada Ltd.
Loblaw Companies Ltd.
Metro-Richelieu Inc.
Overwaitea Food Group
Provigo Inc.
Sobeys Inc.
The Oshawa Group Ltd.
Thrifty Foods
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Canadian IndustryEDI Overview

• Key Initiatives
• 2) Industry Adoption - Supply Chain Vision
• Covers 4 major Supply Chain processes
• Data Alignment
• Efficient Replenishment
• Physical Distribution/Warehousing
• Financial Reconciliation
• Specific EDI transactions/timing

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Canadian IndustryEDI Overview

• Summary
• Major financial benefits
• Execution of implementation plan critical

52
Unexplained Deductions

• September 24, 1998
• Presented by
• Bill McEwan, President CMO, The Great
  Atlantic
• Pacific Company of
  Canada, Limited

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Taking the Unexplained Out Of Deductions

• Deductions Are Not Necessarily A Problem
• This Is A Business Process Issue
• Result - Costly Non-Productive Activities

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Deduction Descriptions

• Unexplained - Inadequate Or No
  Documentation
• Unresolved - Valid Deductions, Agreed By
  Both Trading Partners, But Not Adequately
  Documented or Communicated
• Unauthorized
• - Not Agreed To By Supplier And Distributor
• - Random Act Of Violence

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Results Of 1996 Survey

• Canadian Grocery Distributors Process 1.4 Million
  Deductions Annually
• Represents 1.8 Billion Dollars
• 90 Percent Of Deductions Are Valid
• Cost The Industry 30 Million To Resolve Them -
  27 Million - Suppliers Costs - 3 Million
  - Distributors Costs

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(No Transcript)
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Deduction Responsibility not just

• Distributor Supplier
• Accounting 78 Accounting
• must include
• Merchandising 78 Marketing
• Procurement 78 Sales
• Warehousing 78 Logistics
• Operations 78 Field Sales and more

58
The Problem Can Be Solved

• Implementing The Committees Recommendations,
  including
• Detailed Best Practices For Processing Deductions
  Reducing Unexplained Deductions
• Revised Standard Forms
• Recommendations For The Implementation Of EDI
  Transaction Sets With Respect To Deductions
• Revised Deductions Guidelines

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Three Critical Imperatives

• Communicate
• Communicate
• Communicate

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Recommended Next Steps

• Attend The ECR Deductions Committee Break Out
  Session At 230 P.M. This Afternoon
• Buy The New ECR Publication Taking The
  Unexplained Out Of Deductions

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(No Transcript)
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ECRx in the Drug Channel

• September 24, 1998
• Presented by
• Aldo Baumgartner, President CEO, Wyeth-Ayerst
  Canada
• Leonard Marks, Vice-President, Cosmetics
  Pharmacy,
• London Drugs

63
STAKEHOLDER COMMITTEE

• Co-Chairs
• Leonard Marks London Drugs Ltd.
• Aldo Baumgartner Wyeth-Ayerst Canada
• Committee
• Larry Andrews AltiMed Pharmaceuticals
• Chris Bisanz FCPMC
• David Bloom Shoppers Drug Mart Ltd.
• Claudio Bussandri Medis
• Don Cameron Lawtons Drug Stores
• François Coutu Le Groupe Jean Coutu
• Brenda Drinkwalter CDMA
• Judy Erola PMAC
• Jeremy Ferdinands Overwaitea Food Group
• Frank Ferlaino Cosmair
• Leroy Fevang CPhA
• Theresa Firestone CWDA
• Ronald Frisch Kohl Frisch

64
STAKEHOLDER COMMITTEE contd

• Co-Chairs
• Leonard Marks London Drugs Ltd.
• Aldo Baumgartner Wyeth-Ayerst Canada
• Committee
• Colleen Jay Procter Gamble
• Steve Johnson Mead Johnson
• Jack Kay Apotex
• Charles Low CCTFA
• John Makepeace Wal-Mart Canada Inc.
• Gerry McDole Astra Pharma Inc.
• Malcolm Seath Whitehall Robins
• Monika Simon CACDS
• Art Smith ECCC
• Gersh Sone Pharmx Rexall
• Robert White NDMAC

65
ECRx CATEGORIES

• Rx
• OTCs
• Cosmetics

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ECRx ENABLERS

• Barcoding
• Electronic Data Interchange (EDI)
• Central Product Catalogue
• Scorecarding

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INDUSTRY ASSOCIATIONS
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UNITED WE STAND..DIVIDED WE FALL
69
Efficient Foodservice Response

• September 24, 1998
• Presented by Co-Chairs, Canadian EFR Steering
  Committee
• Peter McLaughlin, President, Clover Group Gord
  Wilson,General Manager, Nabisco Out of Home
• Channels Division

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EFR Completes the Food Supply Chain Puzzle
Efficient Foodservice Response
C O N S U M E R S
Efficient Consumer Response
Quick Response
71
Canadian EFR Vision

• To facilitate a more competitive, demand-driven
  foodservice supply chain, by encouraging adoption
  of recommended Best Practices for industry-wide
  processes

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EFR Motivators (Why do we need it?)
Adversarial Relationships
New Technology Enablers
Eroding Profit Margins
Time Poor, Value ConsciousConsumer
FoodserviceSupply Chain
Lack of Basic Capabilities
Channel Blurring
Non-TraditionalCompetition
Operator Labor
Synergy with ECR, timing is right!
73
Why should we do EFR?

• 1996 KPMG supply chain review concluded
• 52 days of inventory in the supply chain
• Supply chain technology not well used
• Potential savings 400 million (Canada)
• 1997 U.S. study -- 14 billion annual savings

74
Process in Canada

• - Steering Committee comprised of manufacturers,
  distributors, operators, brokers
• - 4 project committees each co-chaired by
  manufacturer distributor
• - EFR Steering Committee aligned with ECR
  Steering Committee
• - share learnings, avoid duplication, share
  resources
• - 4 sponsoring associations (secretariats
  resource support)
• - Co-operative alliance with U.S. EFR initiative

EFR
ECR
Product ID Bar Code
Electronic Commerce
Supply Chain Demand Forecasting
U.S. EFR
Education/Communication
75
Principles .

• Agenda based on common enablers pertinent to all
  companies, irrespective of size or sector.
• Companies to pilot recommendations to identify
  implementation issues and critical success
  factors.
• Participating companies to set an example by
  implementing EFR recommendations.

76
What are we doing?

• 4 EFR Committees
• 1. Product Identification/Barcodes
• 2. Electronic Commerce
• 3. Supply Chain Demand
• Forecasting
• 4. Communications and Education

77
What are we doing?

• Three project committees to
• assess situation in foodservice industry through
  surveys, etc. (form hypotheses, assumptions)
• conduct pilots and/or studies to determine
  business case, critical success factors,
  barriers to implementation
• publish best practice recommendations in report
  to industry
• scorecard and benchmark

78
Product Identification/ Barcodes

• Objective
• To implement and use standard product
  identification codes as per industry (ECCC)
  standards and guidelines, including barcodes on
  SKUs, cases and pallets.
• Guiding Principle
• Use accurate and timely information in a
  computer-based system to support effective
  marketing, production and logistics decisions.

79
Product Identification/Barcodes

• Action
• 1. Reviewed standards and ECR best practices
• 2. Mapped out business requirements to identify
• gaps for foodservice
• 3. Surveyed industry (April) to understand level
  of
• barcode activity and implementation readiness
• 4. Established recommended industry
• implementation timeline
• 5. Publishing Barcoding Basics report

80
Product Identification/Barcodes

• Recommendation
• UPC and SCC-14 numbers assigned to all products
  and cases, price lists updated, by October 31,
  1998
• All cases marked with scannable barcodes by
  October 31, 1999
• Major distributors to sign-off and send letter to
  suppliers requesting compliance
• Endorsed by EFR Steering Committee, FCPMC
  Foodservice members, CFBA

81
Electronic Commerce

• Objective
• To integrate Electronic Commerce (EDI) into
  common business practices, from the order through
  to reconciliation.

82
ElectronicCommerce

• Action
• 1. Survey of foodservice manufacturers, operators
  and distributors conducted. Information session
  for distributors held (April)
• 2. Pilots/projects underway - Lipton/SERCA
• Lynch/Gordon Cara/Summit/Nabisco
• Business case (based on ABC analysis) being
  developed for each
• 3. Technical analysis of applicability of VICS
  4010 to
• foodservice being done

83
Supply Chain Demand Forecasting

• Objective
• To develop communication and information sharing
  guidelines (bar coding, EDI, demand data sharing,
  etc.) that facilitate trading partner planning
  processes and results in the reduction of
  waste/cost throughout the supply chain.

84
Supply Chain Demand Forecasting

• Action
• 1. Extensive list of issues affecting the ability
  to effectively forecast developed
• 2. Three separate Manufacturer/Distributor pilots
  established to test hypotheses regarding key
  issues of SCDF effect on inventory levels and
  communication
• 3. Study conducted to identify operators
  perspectives regarding EFR, technology, and
  SCDF-related issues

85
Education Communications

• Objectives
• To communicate progress and promote participation
  in EFR initiatives to all participants in the
  foodservice supply chain through trade media and
  associations.

86
Education Communications

• Action
• 1. Extensive mailing list 5,000 of key audiences
  developed (operators, distributors,
  manufacturers, media, associations,etc.)
• 2. Associations actively spreading news
  (newsletters, events, press releases) CRFA to
  support communicating
• 3. Updates given at industry conferences/events
• - September 24 session at ECR Conference
• - February 15 EFR Conference
• 4. Series of fax bulletins initiated
• 5. Presence on Web (through ECR)

87
Summary

• Work in progress--12 - 18 month timeframe to
  complete recommendations
• Regular progress reports through associations,
  foodservice events
• Quarterly Steering Committee meetings
• Seek more operator involvement on all four
  committees

88
Conclusion
The future just aint what it used to be Yogi
Berra
89
Canadian ECR InitiativeCentralized Product
Catalogue

• September 24, 1998
• Presented by
• Jean Noelting, President, Cheese Tablespread
  Division,
• Parmalat Canada Ltd.

90
ANNOUNCING
ECCnet The Online Industry Catalogue
C a n a d a
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Current CSDF Database Offering

• Over 46,000 Items, Including Images, FMI measured
  Dimensions
• Sponsored by FCPMC and CCGD
• Information in English French
• UPC Certification Service

92
Rationale for a Centralized Product Data
Repository
Economic Benefits for Single Industry Standard
Manufacturers
Distributors / Retailers
To reduce costs of supporting multiple
Distributors in multiple Channels
To reduce costs of Building and Maintaining a
Comprehensive Database
Solution to Product Data Accuracy
93
Rationale for a Centralized Product Data
Repository
Economies of Scale

• Opportunity to reduce costs and improve services
  by adding product volume from other channels
• Drugs and Pharmacy,General Merchandise
• Convenience, Hardware, Alcohol, Food Service
• Electrical, Health Care, Computer Components

94
Rationale for a Centralized Product Data
Repository
Single Industry Solution Overcomes Technology
Investment Hurdle

• Web Access
• Broad Functionality

95
Future Vision ECCnet
WEB
Central Database - Product - Location
Retailers/ Distributors
Suppliers
Functionality
Govt Regulations/ Ingredients
96
ECCnet Next Steps

• ECR Grocery and ECRx Committee Established to
  finalize Industry requirements
• Supplier / Marketer Accountabilities
• Category Completion Activity for CSDF
• Request for Proposal for Web Portion Issued
• Targeted Implementation for Early 1999

97
ECCnet The Online Industry Catalogue
C a n a d a
IN HOC SIGNO VINCES He who bears this sign
will win Emporera Constantine I 332 AD