Maximilian Musselius,

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ECR Best Practice implementation. Find out how
you are really performing using ECR Key
Performance Indicators.

• Maximilian Musselius,
• ECR-Rus Executive Director

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What is ECR?

• ECR value is Jointly Created only when the
  Industry as a Whole and Individual Trading
  Partners create aligned strategies, exchange
  capabilities and competencies so that we meet the
  needs of our shoppers better than any individual
  company could do separately.

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Underlying principles of ECR
Focus on the consumer A commitment to the belief
that sustained business success stems only from
providing consumers with products and services
that consistently meet or surpass their demands
and expectations. Working Together The greatest
consumer value can be offered only
when organisations work together, both internally
and with their trading partners, to overcome
barriers that erode efficiency and effectiveness.
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ECR in the world
2 Countries
25 Countries
11 Countries
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ECR Europe 25 national ECR organisations
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Common ongoing projects
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Huge Knowledge Library
Transport Optimisation
Consumer Direct Logistics
gt 150 publications
Guide to Day to Day Category Management
Efficient Replenishment
Shrinkage
Optimal Shelf Availability
Promotion Tactics - Adding Focus, Adding Value
Guide to CPFR Implementation
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ECR-Rus Members

• Akort/ ?? ?????????? ???????? ?????????
  ????????
• Bistroff/ ??? ???????
• Bunge/ ?????
• Clorox / OOO "??????? ?????? ????"
• Coca-Cola / OOO ????-???? ??????? ???????
• Colgate-Palmolive / ??? ???????-????????
• Danone/ ?????
• Dirol Cadbury/ ????? ???????
• KarsnyYar/ ??? ?????????? ???????? ????????
• Gillette Group LLC / ??? ??????? ??????
• Hygiene Kinetics/ ??? ??????? ????????
• JohnsonJohnson / ??? ??????? ???????
• Kraft Foods / ??? ????? ???? ???
• Lenta/ ??? ?????
• MARS / OOO ????
• METRO Cash Carry/ OOO ????? ??? ??? ?????
• Mosmart/ ??? ???????
• Nestle Food / ??? ?????? ???
• ProcterGamble /??? ??????? ??? ?????

5 Retailers
19 Manufacturers
2 Associations
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2005 results
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2006 key objectives
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What we do not really know

• Do we really do as good as we think we do?
• Where do we stand compared to the rest of the
  industry?
• Where can we still improve?
• What areas do we need to address first?

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Where can we find the answers?
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www.GlobalScorecard.net
The Global Scorecard - a Capability Assessment
Tool has been designed to give you a detailed
understanding of your ECR capability and to
highlight specific improvement opportunities for
your company.
Available in Russian
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Lets start off by understanding the WHAT

• The Quantifiable Key Performance Indicators and
  Implementation Measures of ECR

STEP 1
Key Performance Indicators of ECR (KPIs)
The WHAT
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8 Key Performance Indicators

• Category Share Is the organization achieving
  the category share desired?
• Service Level / Unit Fill Rate Are all items
  being delivered as ordered?
• On-Time Delivery Are goods arriving when
  expected?
• Inventory Have we minimized the amount of
  inventory needed in the supply chain?
• On-Shelf / Point-of-Sale availability Can the
  consumer purchase the product when they want it?
• Order to Delivery Lead Time How responsive are
  we to changing consumer needs?
• Distribution costs Have we optimized the cost
  of product transportation storage?
• Data Synchronization Do we efficiently get
  information flow right the first time?

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Core KPIs
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What is a GTIN ?

• The Global Trade Item Number is a globally unique
  number to identify trade items, and is therefore
  the foundation for Global e-commerce.
• Umbrella" term used to describe the entire
  family of EAN/UCC codes, including EAN/UCC-8,
  UCC-12 (UPC), EAN/UCC-13, and EAN/UCC/DUN-14.

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11 Implementation Measures

• of consumer units allocated GTIN
• of cases / cartons / inners allocated GTIN
• of pallets / unit loads labelled with SSCC
• of item exceptions to GTIN allocation
  guidelines
• of shipping or receiving locations that have
  been allocated a GLN
• of orders transacted via EDI or XML and of
  Invoices transacted via EDI or XML
• of sales with synchronized Master Data between
  trading partners via standards compliant and GS-1
  Certified data pools
• of SKUs registered in the GlobalRegistry
• of GTIN s that are catalogued consistent with
  Global Product Classification Standards
• For Retailers of checkouts that can scan an
  EAN 13 digit barcode
• For Retailers of checkouts that can scan
  Reduced Space Symbology (RSS)

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Packaging Coding Standards

• Group targets promote common packaging and
  coding standards for Russia
• 3 areas of improvement
• Coding (use of Global Trade Item Numbers use of
  Global Location Numbers)
• Catalogues (use of all mandatory attributes in
  catalogues (barcodes (consumer units), boxes)
  to add information about types of packages
  (Consumer Units/Ordering Units/ Despatch Units)
• Packaging (Shelf Ready Packaging, SSCC (Serial
  Shipment Container Code) and Standard logistic
  label (EAN-128 barcodes with Application
  Identifiers) for logistic units Pallet height
  Returnable pallet tray).

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Implementation measurers
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EDI market is booing
- 1800 Companies connected to EDI channels. - 16
Retailers (2 DIY, 2 Childrens Goods, 12 Food/Non
Food) - 4 Multinational Retailers, 12 Russian
retailers - 2 Logistic operators End of 2006 2
700 EDI User Companies
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• Progress on Enabling Technologies

• The Industry needs to collaborate on capabilities
  that require a critical mass of users in order
  for that value to be created.

Published 3 new EDI Messages based on EANCOM 2002
Standard (since March 2005) DESADV Despatch
Advice, very important for Logistic to enable
Traceability RECADV Receiving Advice, INVRPT
Inventory Report. Now 6 Messages in total
together (with ORDERS, INVOICE and ORDER
RESPONSE). EDI market grows not only
extensively, but also more intensively by
enabling other business processes.
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Enabling Technology Committee pillars
(FY05/06FY06/07)
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Now That We Know WHAT Performance Measures Need
to ImproveWe Need to Understand HOW To Improve
Them - The Best Practices

• Step 2

Lets start with a look at the demand side
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Collaborative Consumer Value Creation

• Manage Assortment
• Manage promotions
• Introduce new products
• Shopper loyalty Management
• Category/ brand management

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The Supply

• Main focus is on two best practices
• Reliable stockloss and shrinkage management

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Supply Example (OSA)
From nothing planned - 0
Out-of-stock rate not known. Trading partners
have no plans to tackle on-shelf availability,
because it is not seen as an issue
To fully implemented - 4
OSA is an integrated business process. Continuous
measurement with automatic and alert based data
capture, regular root cause analysis and
continuous actions based on consumer value
creation strategies is undertaken
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OSA (Optimal Shelf Availability)

• ECR gets now hard data and quantifiable results
  based on consistent methodology (ECR Europe)
• ECR Community target
• - Reduce OOS by 50 in 3 years
• - Reduce Inventory by 50 in 3 years
• Step 1 OOS Pilot Measurements
• Establish the Baseline (Nov 2005 Feb 2005)
• Step 2 OSA Panel (Sept 2005 continuous)
• Increased Accuracy of forecast
• Products shelf availability
• Service level

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Case fill rate
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Case fill rate (cont.)
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ECR-Rus Shrinkage Survey 2006
ECR Europe 37 External Theft 36 Internal
Theft
5 Top Hot Products

• ECR-Rus
• 22 External Theft
• 48 Internal Theft

48 Internal Theft in Russia is a big challenge!
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Conclusions

• Scorecard could be fast completed when having all
  the necessary data training
• CEO Commitment essential
• Cross-functional team - directors and senior
  management attendance at the workshop is
  essential
• Choose the right partner/facilitator
• Do not compare against your local competitor
  benchmark against global

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Education - priority for ECR

• THANK YOU!
• www.ecr-rus.ru
• www.ecr-edi.ru
• www.shrinkage.ru
• www.ecr-osa.ru