1. Case Study Summary – Primary Success Factors
Each factor is a key driver or barrier if not pursued
purposefully
1. Willingness to Innovate & Change
• Creation of Shopper Value
• Collaborative Understanding of Partner’s
business / Information Sharing
• Aligned Goals & Objectives
• Aligned Measures & Incentives
2005
2. Your Quick ECR Scorecard for Today
1. Do you have demonstrable examples of Yes
Many
Yes
Few
No
collaborative working? eg, significant information sharing
2. Do you & your Trading Partners use Category Mgt Yes Starting No
principles to deliver differentiated shopper offerings?
3. Do you set promotional success criteria and jointly Yes Some- No
Always times
evaluate against them with your Trading Partners?
4. Are you able to see & replenish in line with your Yes
In time
Not in
No
Time
No
customers daily demand?
5. Do you have aligned ECR vision, objectives and Yes Some No
All
measures within your business?
Source: Extracted from Entry Level Scorecard on www.globalscorecard.net 2005
4. Value Chain Analysis - What Did We Do?
Deep-dive analysis across major companies combined with
IBM data
Cost structures of companies analysed using standard set
of activities
Manufacturer and retailer benefit for each ECR area quantified
Key output, expressed in terms of:
• Potential Cost Savings
• Potential Inventory Reductions
• Potential Growth
2005
5. VCA Results – Breakdown by ECR Improvement Concept
Cost Reductions
ECR Improvement Concept
Demand
Integrated Demand Driven Supply
Supply
Enablers
Integrators
(2 000) 2 000 4 000 6 000 8 000 10 000
Total value chain product category: All Values in €m
Europe Manufacturers Europe Retailers
2005
6. VCA Results – Breakdown by ECR Improvement Concept
Inventory Reductions
ECR Improvement Concept
Responsive Replenishment Demand
Supply
Enablers
Integrators
5 000 10 000 15 000 20 000
Total value chain product category: All Values in €m
Europe Manufacturers Europe Retailers
2005
7. VCA Results – Breakdown by ECR Improvement Concept
Combined Potential Growth
Collaborative Responsive Global
Shopper Optimise Replenishment Data
Value Creation Promotions Synchronisation
Europe
+4.9%
Optimise Optimise Operational
Assortments New Product Excellence
Introductions
0 1 2 3 4 5 6
Growth (%)
2005
10. Macro-Economic Analysis - What Did We Do?
Defined relevant indicators
Sourced data from existing databases and
companies
Interpreted economic indices
Explored correlations between ECR and
category performance
2005
11. Market Development
Retail sales share of wallet is in decline – consumers shift
France
Retail Sales / Consumer Spending Germany
(Index 1994=1) Italy
1.15
Spain
1.10 UK
1.05 Iceland
Finland
1.00 Denmark
0.95 Belgium
Austria
0.90 Greece
Switzerland
0.85
Sweden
0.80 Portugal
Norway
0.75
Netherlands
0.70 Luxembourg
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Ireland
Source: Planet Retail, 2005 2005
12. Market Development
Modern grocery formats have grown share within this environment
France
Modern Grocery Distr (Grocery Sales) / Retail Sales Germany
(Index 1994=1)
1.25 Italy
UK
1.20 Austria
Greece
1.15 Switzerland
Sweden
1.10 Portugal
Norway
1.05 Netherlands
Luxembourg
1.00 Ireland
Iceland
0.95 Finland
Belgium
0.90 Spain
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Denmark
Source: Planet Retail, 2005 2005
13. Manufacturer Performance
ECR adopting manufacturers have driven category growth
Sales Index
1.40
ECR adopter sales
Total category sales
1.20
1.00
1999 2004
Source: based on several manufacturers‘ market research data 2005
14. Macro-Economic Summary
Share of wallet shift away from retail has slowed
consumer sales
Most ECR adopting retailers can offset the above through
share growth
The consequences of ECR adoption are noticeable for
shoppers
ECR adopting manufacturers are proven to drive
category growth
As grocery sales show limited potential for growth, efficiencies
& collaborative shopper value creation remain key… ECR can
drive both
2005
18. ECR Implementation Pyramid
Align
Measures
& Incentives
Align Goals
& Objectives
Cultural Intervention
Plan
Evaluate
2005
19. ECR Implementation Pyramid
1. Evaluate the opportunity for greater ECR adoption
within your business
“Quick ECR check-list” is a start!
Assess your business using full GCI Scorecard
Question: what does ECR mean to us?
... what should it mean to us?
2005
20. ECR Implementation Pyramid
1. Evaluate the opportunity for greater ECR adoption
within your business
2. Plan to incorporate proven ECR improvement concepts
into your business strategy
Maintain focus against cost & inventory reductions
Increase emphasis on creating Shopper Value
• Shopper based Joint Business Plans
• Shopper based Value Chain
• Consumer Driven Innovation
2005
21. ECR Implementation Pyramid
1. Evaluate the opportunity for greater ECR adoption
within your business
2. Plan to incorporate proven ECR improvement concepts
into your business strategy
3. Cultural Intervention of the 5 Primary Success Factors
Willingness to innovate and change
Collaborative understanding of partner’s
business
Information sharing
2005
22. ECR Implementation Pyramid
1. Evaluate the opportunity for greater ECR adoption
within your business
2. Plan to incorporate proven ECR improvement concepts
into your business strategy
3. Cultural Intervention of the 5 Primary Success Factors
4. Align Goals & Objectives
Firstly within your own organisation –
vertically & horizontally
With your business partners
2005
23. ECR Implementation Pyramid
1. Evaluate the opportunity for greater ECR adoption
within your business
2. Plan to incorporate proven ECR improvement concepts
into your business strategy
3. Cultural Intervention of the 5 Primary Success Factors
Align Goals & Objectives
4. Align Goals & Objectives
5. Align Measures & Incentives
Internally & externally
2005
29. In Summary
ECR has delivered clear benefits over the last 10 years
Significant opportunity for ECR remains
• Drive cost out of the supply chain
• Stimulate and drive significant growth
Economic environment remains challenging
Proven recommendations to accelerate and reap ECR benefits
Jointly satisfying shopper needs at the core
It’s now down to us…
2005
