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.
Canadian ECR Initiative
The 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
ECR Sponsors
ECR INDUSTRY MODEL
INVOLVEMENT /
COMMITMENT
LOW
Proprietary
MEDIUM
HIGH
Non
Proprietary
ECR INDUSTRY MODEL
INVOLVEMENT /
COMMITMENT
LOW
MEDIUM
Proprietary
•Category Management
•CRP
HIGH
Non
Proprietary
•Barcode Standards
•EDI Standards
•Unsaleables Solution
ECR INDUSTRY MODEL
INVOLVEMENT /
COMMITMENT
LOW
Proprietary
•COMMITMENT to
Information Sharing
on best practices
MEDIUM
HIGH
Non
Proprietary
•COMMITMENT to
Implementation
•Common industry
priorities
•Agreed to industry action
plan
ECR Enablers
HIGH Commitment Implementation Initiatives

• Scan Data Integrity
 • Case Barcoding Critical Mass Target
ECR Enablers
HIGH Commitment Implementation Initiatives


• Scan Data Integrity
• Case Barcoding Critical Mass Target
 • Establishment of Electronic Commerce Council
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
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
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
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
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
ECR YEAR 2000 VISION
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!
ECR Sponsors
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, Sobey’s Inc.
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
Scorecard Focus
To Evaluate
Total Efficient Replenishment
With Five Views :
1. EDI IMPLEMENTATION
2. BARCODING IMPLEMENTATION
3. REPLENISHMENT PROCESS IMPLEMENTATION
4. CONTINUOUS REPLENISHMENT (CRP)
5. CUSTOMER SERVICE IMPLEMENTATION
Canadian Scorecard
Objectives
Objective 1
Trading Partner
Dialogue
•Specific Action
Plans with
Timetables for
Implementation
Between Trading
Partners
Canadian Scorecard
Objectives
Objective 2
Industry
Benchmarking
•Provide Gap
Analysis (Self
Assessment)
versus Industry
Average and Best
Practice
Canadian Scorecard
Objectives
Objective 3
Critical Mass
Feedback
•Generate Industry
Initiatives to
Continue Progress
in Overcoming
Barriers
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
Scorecard Utilization
Recommendations
• Trading Partner Cross - Assessment
• Initiate Trading Partner Dialogue by
Exchanging Self-Assessment Scorecards
• Annual Business Review meetings of MultiFunctional Teams to develop mutual ECR
Implementation Action Plans
The ECR Steering Committee
Invites You to Score Yourself
Check it out
www.ecr.ca
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
Let’s 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.
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.”
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.
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.
What’s 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 - User’s Guide published
 July 21, 1998 - Joint industry recommendation for
a National Roll-out to commence November 1,
1998.
So How Are We Doing So
Far?
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 year’s industry average.
There is a Lot of Work Still
to be done….
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.
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.
What can you
do next?
• If you haven’t already, buy a User’s Guide.
• Attend the breakout session.
• Who should attend?
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.
Canadian Barcode
Initiative
Selling Unit
Case
Pallet
Canadian Selling Unit
Barcode Initiative
• Progress strong with accuracy 99%+
Validation procedures in place
• Driving efficiency in Canadian
Industry
Canadian Case
Barcode 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
Canadian Case
Barcode Initiative
Current Issues
• May survey - 60% cases with bar codes
• Efficiency require critical mass
• Some suppliers hesitate to invest
• Quality/Accuracy an ongoing challenge
Canadian Case
Barcode 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
Canadian Pallet License
Plate/ASN Initiative
Part of Canadian Supply Chain Vision
• Supports efficient
distribution/receiving/warehousing
• Each pallet “Bar Coded” with license plate
• Supported by Advanced Ship Notice
Transaction
Canadian Industry
EDI 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
Canadian Industry
EDI 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
Canadian Industry
EDI 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
Canadian Industry
EDI Overview
Key Initiatives
1) Industry Adoption VIC’s 4010
–
–
–
–
Year 2000 capable
General merchandising standard
Canadian Industry Implementation Guide
Broad Industry endorsement
May 1999 Conversion Deadline
Canada Safeway Ltd.
Co-op Atlantic
Federated Co-operators Ltd.
Great A&P Co. Canada Ltd.
Loblaw Companies Ltd.
Metro-Richelieu Inc.
Overwaitea Food Group
Provigo Inc.
Sobeys Inc.
The Oshawa Group Ltd.
Thrifty Foods
Unilever Cda. Ltd.
The Quaker Oats Co.
of Cda. Ltd.
Proctor & Gamble
Inc.
Pepsi-Cola Canada
Ltd
Parmalat Canada Ltd.
Kraft Canada Inc.
FBI Brands Ltd.
Coca-Cola Ltd.
Indicate in the appropriate box
the planned date for moving to
the EDI-4010 standard for each
trading partner
Culinar Inc.
ECR Canadian Grocery Industry Migration
Schedule to EDI VICS-4010 Standard
Latest Scheduled Date Is To Be May 1999
Canadian Industry
EDI 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
Canadian Industry
EDI Overview
Summary
• Major financial benefits
• Execution of implementation plan
critical
Unexplained Deductions
September 24, 1998
Presented by:
Bill McEwan, President & CMO, The Great Atlantic &
Pacific Company of Canada, Limited
Taking the “Unexplained”
Out Of Deductions
Deductions Are Not Necessarily A Problem
This Is A Business Process Issue
Result - Costly Non-Productive Activities
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”
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
Efficient Deductions Process
Unexplained Deductions
Trading Relationship
A
D
90%
Deductions As…
Legitimate
Business Process
C
B
A
Trading Relationship
B
Trading Relationship
C
Trading Relationship
D
Deduction Responsibility
…not just
Distributor
Accounting
…must include
Merchandising
Procurement
Warehousing
Operations
more
Supplier
78
Accounting
78
78
78
78
Marketing
Sales
Logistics
Field Sales
…and
The Problem
Can Be Solved
Implementing The Committee’s 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
Three Critical
Imperatives
Communicate
Communicate
Communicate
Recommended
Next Steps
Attend The ECR Deductions Committee
Break Out Session At 2:30 P.M. This
Afternoon
Buy The New ECR Publication “Taking
The Unexplained Out Of Deductions”
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
STAKEHOLDER
COMMITTEE
Co-Chairs
Leonard Marks
Aldo Baumgartner
London Drugs Ltd.
Wyeth-Ayerst Canada
Committee
Larry Andrews
Chris Bisanz
David Bloom
Claudio Bussandri
Don Cameron
François Coutu
Brenda Drinkwalter
Judy Erola
Jeremy Ferdinands
Frank Ferlaino
Leroy Fevang
Theresa Firestone
Ronald Frisch
AltiMed Pharmaceuticals
FCPMC
Shoppers Drug Mart Ltd.
Medis
Lawtons Drug Stores
Le Groupe Jean Coutu
CDMA
PMAC
Overwaitea Food Group
Cosmair
CPhA
CWDA
Kohl & Frisch
STAKEHOLDER
COMMITTEE …cont’d
Co-Chairs
Leonard Marks
Aldo Baumgartner
London Drugs Ltd.
Wyeth-Ayerst Canada
Committee
Colleen Jay
Steve Johnson
Jack Kay
Charles Low
John Makepeace
Gerry McDole
Malcolm Seath
Monika Simon
Art Smith
Gersh Sone
Robert White
Procter & Gamble
Mead Johnson
Apotex
CCTFA
Wal-Mart Canada Inc.
Astra Pharma Inc.
Whitehall Robins
CACDS
ECCC
Pharmx Rexall
NDMAC
ECRx
CATEGORIES
• Rx
• OTCs
• Cosmetics
ECRx
ENABLERS
• Barcoding
• Electronic Data Interchange
(EDI)
• Central Product Catalogue
• Scorecarding
INDUSTRY
ASSOCIATIONS
“UNITED WE STAND…..
DIVIDED WE FALL”
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
EFR Completes the Food
Supply Chain Puzzle
1972
Efficient Foodservice Response
C
O
N
S
U
1972
Efficient Consumer Response
M
E
Quick Response
R
S
Canadian EFR
Vision
• To facilitate a more competitive,
demand-driven foodservice supply
chain, by encouraging adoption of
recommended Best Practices for
industry-wide processes
EFR Motivators (Why
do we need it?)
Eroding
Profit
Margins
Time Poor,
Value Conscious
Consumer
Adversarial
Relationships
Foodservice
Supply
Chain
Channel
Blurring
Operator
Labor
New
Technology
Enablers
Lack of Basic
Capabilities
NonTraditional
Competition
Synergy with ECR, timing is
right!
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
Savings share by segment (U.S.)
(Source: 1997 FDI EFR Report)
28
%
1%
36
%
35
%
Manufacturer
Distributor
Operator
Broker
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
FCPMC
CCGD
EFR
ECR
CFBA
Product ID Bar Code
ECCC
U.S.
EFR
Electronic Commerce
Supply Chain Demand
Forecasting
Education/Communication
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.
What are
we doing?
4 EFR Committees
1.
Product Identification/Barcodes
2.
Electronic Commerce
3.
Supply Chain Demand
Forecasting
4.
Communications and Education
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
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.
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
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
Electronic
Commerce
Objective:
•To integrate Electronic Commerce (EDI) into
common business practices, from the order
through to reconciliation.
Electronic
Commerce
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
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.
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
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.
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)
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
Conclusion
“The future just ain’t what it used to be”
Yogi Berra
Canadian ECR Initiative
Centralized Product Catalogue
September 24, 1998
Presented by:
Jean Noelting, President, Cheese & Tablespread Division,
Parmalat Canada Ltd.
ANNOUNCING
ECCnet
The Online Industry Catalogue
Canada
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
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
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
Rationale for a Centralized
Product Data Repository
Single Industry Solution
Overcomes
Technology Investment
Hurdle
•Web Access
•Broad Functionality
Future Vision ECCnet
WEB
Central
Database
- Product
- Location
Suppliers
Retailers/
Distributors
Functionality
Sales
Management
Planogram
Location
Data Base
Marketing
Item
Synchronization
- POS File
- Logistics
- Orders
Gov’t
Regulations/
Ingredients
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
ECCnet
The Online Industry Catalogue
Canada
“IN HOC SIGNO VINCES”
“ He who bears this sign will win”
Emporera Constantine I 332 AD