GDS Global Data Synchronization Reality Impacting Your Supply Chain

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GDS (Global Data Synchronization)
RealityImpacting Your Supply Chain
Spring 2005
Sponsored by FMI/GMA Supply Chain Logistics
Committee

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Project Reality Presentation Agenda
Purpose To discuss the realities of data
synchronization as an enabler to optimized Supply
Chain efficiency

• Introduction Mike Scott/Ahold
• What is global data synchronization (GDS)?
• Why global data synchronization?
• What information is being exchanged?
• Retailer Highlights Ahold/Wegmans
• Supplier Highlights
  Nestle Purina/ConAgra
• Recommended Next Steps
  Wegmans

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What Is Data Synchronization?
A standardized electronic framework for
continuous matching of data between two or more
organizations.

• It is foundational
• It facilitates the movement of products through
  the supply chain at the lowest possible cost
• It is enabled by accurate initial and ongoing
  physical and financial product attributes

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Why Data Synchronization?

• Strong financial impact
• Ability to leverage industry standards and best
  practices
• Will enhance business processes within an
  organization and between trading partners (cradle
  to grave)
• Natural evolution toward collaborative
  applications sourcing, DSD (direct store
  delivery), CPFR (continuous replenishment and
  forecasting), RFID (Radio Frequency
  Identification), etc.

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Item synchronization is the foundation for all
forms of electronic collaboration
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Item synchronization enables higher forms of
electronic collaboration
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Global Standards Attributes

• What type of Item Information will be shared?
• 150 product attributes available for exchange
  today/300 in 2005 (examples below)
• GTIN, GLN, Target Market are considered the
  global keys (who, what, where)

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Summary of Benefits RetailersSource
ATKearney Case Study January 2003
Benefits range from 700,000 to 1 million EBIT
for every 1 billion in sales (in relevant
categories)
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Summary of Benefits Supply Chain
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Ahold Supply Chain Potential Savings Ask
yourself how clean is my data?

• People Resources Wasted
• Headquarters 60
• Procurement 20
• Store Level 60
• Technical 5
• Supply Chain 20

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Ahold Potential Logistics Savings

• Found that 100 of all purchase orders are double
  checked
• Found that we adjust 20 of purchase orders to
  fill a truck
• Found that we re-measure all new items
• Found that pack size, case code and UPC are
  common errors
• Found pallets too tall to fit warehouse rack

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Wegmans Data Sync Update
Includes 95 of Total Wegmans Volume
89 of Volume
20 of Volume
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Key Lessons Learned at Wegmans

• Benefits
• Dont lose sight of the small wins they will
  lead you to opportunity
• Stay focused on the big picture!
• This is not an IT project!
• Engage your merchandising and sales groups in
  driving adoption
• Engage your experts in the process! (Warehousing,
  Logistics, Accounting, Buying, etc.)
• Data Accuracy
• A dynamic problem, not a static one
• A pre-requisite to achieving industry benefits
• 2004 pilot of random item group showed only 12
  had completely accurate information
• 2005 sample showed accuracy at 35

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Result of Data Accuracy Audit Items Completely
Accurate
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Wegmans Business To Business Pyramid
Supply Chain Visibility
e- Payment
Price Sync
Price Sync
Increased Savings
RFID/ePC
Increased Simplicity
Dynamic Logistics
Demand Forecasting
Replenishment
W-Retail
MRO Procurement
Fresh CPG
Dynamic Distribution
e-Negotiation
eProcurement
Data Accuracy
Global Registry
Data Synchronization
Standards
Catalog
IT Infrastructure
Education and Financial Measurement
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Summary of Benefits -Manufacturers Source
ATKearney Case Study January 2003
Benefits range from 800,000 to 1.2 million EBIT
for every 1 billion in sales
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Nestlé Purina Total Benefits Summary
Based on 5 years for full realization of benefits

• Total Potential Benefits 2 MM
• 63 of total savings Sales Force Time
• 14 of total savings Speed to Market
• 12 of total savings Outbound Logistics
• 9 of total savings Out-of-Stock Reduction
• 2 of total savings Customer Service /
  Finance Time

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Nestlé Purina PetCare Outbound Logistics Savings
Based on 5 years for full realization of
benefits

• 12 of total savings Outbound Logistics
• Increased Truck Utilization 83
• Under-utilized space caused by item data
  discrepancies
• Reduced Delivery Errors and Associated Cost 7
• Trailer wait time due to shipment delays at
  delivery warehouses caused by item data issues
• Reduced Return Shipment Costs 10
• Freight and labor costs caused by item data
  issues

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ConAgra Foods

• ConAgra Foods is one of North Americas largest
  packaged food companies with many popular
  consumer brands.
• ConAgra started Data Synchronization efforts in
  October of 2003, and is currently in production
  or piloting with six retailer partners

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ConAgra Foods Summary of ApproachHow we got
started in our organization?

• Executive Sponsorship leaders who recognized
  and believed in the future of Data
  Synchronization and the need to get this started
  at ConAgra Foods
• Consolidation efforts to a centralized location
  leveraging our movement to a single platform to
  enhance data synchronization for cleaner, and
  more accurate information
• Education - what is needed and then compared it
  internally to what data was available today and
  how our processes were working
• Select a strategy then pilot select a trading
  partner then test the data, processes and the
  technology

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ConAgra Foods Summary of GDS Impact

• Short term work-around fixes arent viable.
• Data has to be right now due to industry
  standards and electronic data sharing
• Biggest learning and surprise was the need for
  better quality data internally and the volume
  missing of specific attribute information
• Getting the organization educated has been a
  large undertaking and it is a continuous process
• We now pay closer attention to our product
  information, who is responsible for it and the
  impacts to both internal and external customers
• Improved pallet configurations
• Transportation
• Ti/hi improvements
• More efficient warehousing
• To stay competitive we had to get involved in
  data synchronization

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Next Steps Industry Resources How do I get
started in my own organization?

• Educate your organizations key business
  executives
• Get an internal sponsor or champion
• Conduct interviews with key supply chain
  associates
• Talk with other retailers/suppliers who are
  already active with data synchronization
• Utilize industry information/tools
• GDS launch pad tool www.gdslaunchpad.com
• WWRE Accreditation Program, Transora, UCCnet
• Solution partner web seminars
• GCI Pilot Programs
• Get Started! Take Action!

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Questions?