ecr europe forum '05. the case for ecr
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Shopper at the Core
Shopper based Joint Business Planning
Shopper based Value Chain
Consumer Driven Innovation
2005
What Did ECR Set Out to Achieve 10 Years Ago?
The 1995 value chain analysis opportunity projection• Cost reduction of: 4.8% of consumer sales value
• Inventory reduction of: 42%
• Cost impact of inventory reduction: 0.9% of consumer sales value
• Total cost impact: 5.7% of consumer sales value
The 1999 Transport Optimisation study • Additional benefit: 1.2% of consumer sales value
Total potential cost savings: 6.9%of consumer sales value
2005
Project Overview
Academic Partnership and IBM commissioned to review the Business Case for ECR in Europe:
1. Assess achievements over the last 10 years
• Determine future opportunity for ECR
• Make recommendations for accelerating the adoption of ECR
• Re-energise the ECR communities
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Project Components
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Project Components
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Project Components
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Project Components
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Project Components
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Project Components
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Project Components
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GCI Scorecard Analysis – What Did We Do?
Reviewed a total of 908 records (Global)
Date: August 2001- February 2005
Balance of retailers / manufacturers
Key outputs:• ECR adoption scores
• Supply side performance indicators
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GCI Scorecard Analysis – The Scorecard
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0 20 40 60 80 100
Italy
Switzerland
Greece
UK
France
Germany
GCI Scorecard Analysis – Adoption Levels
Significant variation between countries and within countries
Source: GCI Scorecard database
Average
Range
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GCI Scorecard Analysis - Highlights
ECR-adopters report:
• An increase of Service Level by +5.7 percentage points…
• ...which means improved by 7%
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GCI Scorecard Analysis - Highlights
ECR-adopters report:
• Finished Goods Inventory cover reduced by -10 days…
• ...lowered by 20% on average
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GCI Scorecard Analysis - Highlights
ECR-adopters report:
• Reduced Out of Stocks by 4.9 percentage points…
• ...which means halved
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Successful Initiatives Driven Through ECR
On Shelf Availability & Shrinkage
• A leading global retailer quantified €122m saving through the OSA Road Map
• Another global retailer delivered a 75% reduction in shrink across hypermarkets
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Successful Initiatives Driven Through ECR
Global Data Synchronisation
• A leading European retailer delivered 30% productivity improvement in their data management
• A leading Japanese retailer reduced item management costs by $2m
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Successful Initiatives Driven Through ECR
CPFR
• Between a leading Global retailer and a major Health & Beauty manufacturer
• Reduced lead-times from 21 to 11 days
• Increased sales by $8.5m
• Improved instock levels from 87-98%
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Project Components
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Case Studies – What Did We Do?
37 case studies, retailer-manufacturer collaboration across Western Europe
Range of categories, food and non-food
In-depth interviews with industry leaders
Objective:
• Identify patterns of drivers and barriers to ECR adoption
• Quantify implementation and results
Clear patterns are evident