CCGDFCPC Unsaleables Protocol Benchmark and Handling Rate Recommendations - PowerPoint PPT Presentation

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CCGDFCPC Unsaleables Protocol Benchmark and Handling Rate Recommendations

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Since joint protocol was established in 1987, this is 4th relook at benchmark ... Based on handful of distributors with detailed cost studies ... – PowerPoint PPT presentation

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Title: CCGDFCPC Unsaleables Protocol Benchmark and Handling Rate Recommendations


1
CCGD/FCPC Unsaleables ProtocolBenchmark and
Handling Rate Recommendations
  • For Implementation May 1, 2010

2
Context
Where we are in the journey
Protocol Principles
  • Since joint protocol was established in 1987,
    this is 4th relook at benchmark and handling rate
    but first since October 2001
  • Frozen categories integrated into protocol in
    2002
  • Dairy case first tested in 2006 but not
    integrated due to data quality issues
  • Little joint industry focus on this issue in last
    few years
  • Reduce incidence and cost
  • Increase accountability
  • Use fact based decision making
  • Increase visibility/understanding
  • Increase trust
  • Remove profit incentive

3
Methodology
Benchmark and Handling Rate
Dairy Case Evaluation
  • Benchmark
  • Based on broad database of stores over 5 periods
    in 2008
  • Broken into quartiles and compressed via
    concertina analysis to drive achievable
    continuous improvement
  • Handling rate
  • Based on handful of distributors with detailed
    cost studies
  • Lowest credible cost not average cost
  • Based on target database of 150 stores across 4
    distributors and 3 periods
  • Methodology consistent with benchmark calculation
    for current protocol
  • Also examined out of code incidence at request of
    distributors

4
Summary of Recommendations
  • Changes to Existing Protocol
  • The benchmark to be reduced to 9.75 items per
    10,000 of eligible category sales down from
    10.5 items
  • The handling rate for store-identified damage be
    reduced to 0.43/item down from 0.52/item.
    Warehouse damage stays at 0.34/item
  • Timing for these changes to be May 1, 2010
  • New to Protocol
  • Moving forward handling rate will be deducted
    from the net cost rather than an invoice cost.
  • Dairy case
  • This should continue to be managed on a trading
    partner basis outside of the joint industry
    protocol
  • Joint industry committee to agree a work plan
    going forward to manage unsaleables more
    proactively than in the last 8 years
  • E.g. joint projects/investigations into high
    incidence situations
  • Timetable for re-assessing benchmark and handling
    rate going forward
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