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“Winning the Expired Products Battle”

“Winning the Expired Products Battle”. Ensuring Adequate Remaining Shelf Life to Maximize Sell Through and Avoid Product Expiry – the Keys to Success. Presented by GENCO ATC July 20,2011. Topics for Today’s Discussion. Size of the Issue Complexity Recommendations Panel Discussion.

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“Winning the Expired Products Battle”

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  1. “Winning the Expired Products Battle” Ensuring Adequate Remaining Shelf Life to Maximize Sell Through and Avoid Product Expiry – the Keys to Success Presented by GENCO ATC July 20,2011

  2. Topics for Today’s Discussion • Size of the Issue • Complexity • Recommendations • Panel Discussion

  3. The Issue

  4. The Issue “Outdated items at XXXXXXXX upsets customers” Chicago Tribune “Expired Food—Is It on Your Grocer’s Shelves?” Shelf Life Advice “On Your Side: Expired food for sale” ABC Channel 7 News “Expired groceries sold at Hampton Roads grocery stores” ABC Channel 13 News

  5. The Issue

  6. The Size of the Issue • 2008 FMI/GMA Unsaleables Report – 20% of Total Unsaleables • 2010 Discussions with Retailers – 35% of Total Unsaleables • $3 - $5 Billion

  7. The Complexity of the Issue • 21 Factors Identified that Affect Delivery of Sufficient Shelf Life at Shipment • Collaboration is a Key Element for Success • Ultimate Goal is to Delight the Consumer

  8. The Complexity of the Issue

  9. The Complexity of the Issue

  10. The Manufacturer’s View R&D and Quality Want minimum days Demand Planning / Distribution Sales Want customer requirements Want maximum days Plants Want maximum days

  11. The Retailer/Wholesaler’s View Manufacturer Want minimum guaranteed days Distribution Centers Retail Stores Want maximum days Want maximum days Consumer Want maximum days

  12. Recommendations for Joint Adoption • Understand the Challenges • Collaborate with Trading Partners • Rationalized Stock Assortment • Speak a Common Language • Embrace and Commit to Continuous Improvement • Top Management Sponsorship and Commitment

  13. Recommendations for Joint Adoption • Speak a Common Language MCRSL > [A x (B+C)] + D MCRSL – Minimum Customer Remaining Shelf Life (days) A – Safety Factor (whole number based on category experience) B – Average Retail Sales Velocity (days) C – Warehouse Inventory (days of supply) D – Consumer Pantry Life (days)

  14. Recommendations for Manufacturer Adoption • Create a “Customer Remaining Shelf Life” Internal Team to Manage the Process • Audit Performance • Continually Improve the Process and Adjust Standards • Incorporate Sales Considerations into the Process

  15. Recommendations for Retailer/Wholesaler Adoption • Work with Manufacturers to Establish Achievable Standards and Continually Improve the Process and Adjust Standards • Request Open Lot Codes • Manage Inventory to Consumption • Incorporate ASN Technology for Inbound Shipments • Incorporate the Ability to Capture Expiration Dates into the WMS • Monitor Operations Processes for Improvement Opportunities

  16. Panel Discussion • Oscar Fussenegger, Corporate Reclamation Manager, The Kroger Company • Don LaChance, Senior Director, Inbound Quality Logistics & Reclamation, C&S Wholesale Grocers • Gary Piwko, Director, Remarketing and Returns, The Kellogg Company • JaceSwartzendruber, Unsaleables Manager, Supply Chain, ConAgra Foods • George Thrower, Manager of Unsaleables, Harris Teeter

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