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Action for Improving Supply Chain Efficiency

Action for Improving Supply Chain Efficiency

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Action for Improving Supply Chain Efficiency

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  1. Action for Improving Supply Chain Efficiency - A Report to ECR China Board Supply Chain Efficiency Committee, ECR China Zhengzhou, Nov 6th, 2008

  2. 1. Action Plan • Order Fulfillment Improvement Improve Supply Chain efficiency by enhancing order fulfillment, focusing on fill rate and lead Time reliability. • Supply Chain Standard Development Improve Supply Chain efficiency by driving the development of standards including pallet, truck and dock standards. Action plan made in May and updated in Oct

  3. 2. Implementation Review –Order Fulfillment Improvement Define & Align Order Fulfillment KPI (by Apr 2008) details • Define KPIs (Fill Rate / Lead Time Reliability). • Align on KPI data source & calculation. • Analyze KPI to list reasons & approaches (by May 2008) • Share KPI from Supplier & Retailer side. • Identify root reasons for unqualified performance. • Workshop for listing key reasons and proposed approaches for improvement focusing on various functions. details 3

  4. Implement improvement approaches with pilot committee members (May 10th – Oct 2008) 2. Implementation Review –Order Fulfillment Improvement • Jointly implement the approaches in pilot retailers and suppliers • Monitor progress and share information among pilot members on regular base • Review and wrap-up the pilot implementation 4

  5. 2. Implementation –Standards Development • Pallet standardization chosen as 1st focus (Oct) • Palletization of logistics operation agreed as the near future development orientation • 1.2 X 1.0m regarded as the most preferred pallet size • Members agreed to suggest to the standard when new stores or DCs opening • Key players from the market needed for driving the change - international suppliers preferred for the leadership 5

  6. 3. Next Step –Order Fulfillment Improvement • Deploy updated approaches to all committee members (Nov 2008 – May 2009) • Update the approaches based on the conclusion from pilot implementation • Implement the updated approaches within all committee members. • Promote the concept and solution via ECR (Nov 2008 – Dec 2009) • Standardize concept, KPIs and measurement within ECR members. • Promote the solution within ECR for further supply efficiency improvement and extend it to the two industries. 6

  7. 3. Next Step –Standards Development • Assess current China standards and processes being followed from retailers and suppliers (Feb 09) • Via survey completion • Areas: Data Flows, Physical Truck, Transportation Systems, Loading Standards, Receiving Capability • Align on the current and ideal state for each standard (TBD) • Prioritize the areas where the committee will focus (TBD) 7

  8. 3. Next Step –Standards Development • Develop a plan for testing the focus areas (TBD) • Promote the concept and solution via ECR (TBD) • Standardize concept within ECR members. • Learn from other regions where it makes sense 8

  9. 3. Next Step –Sub-Committee Work • Participants • Members involved in action plan: Tesco, Nestle, Coca-cola, IBM, P&G, Mengniu Group, Johnson & Johnson, Watson's, Wal-Mart, Metro • Members started implementation: Coca-cola, Nestle, P&G, Colgate, Metro More members & attentions from company management are needed! 9

  10. 3. Next Step –Sub-Committee Work • Quarterly review meeting • More chance for communications & professional gathering • More chances for detailed case driven discussion for Supply Chain efficiency enhancement 10

  11. Thanks for your attention! • Denny Yang & Leland Jiang • Co-leader of ECR Supply Chain Efficiency Committee • 1425 Zhenbei Road, Shanghai 200333, P.R.China • Tel: 021-2207- 8542 • Email: yibin.yang@Metro.com.cn 11

  12. Back up 12

  13. 2. Action Plan & Status Defined KPI back 13

  14. 2. Action Plan & Status KPI Report (sample) back 14

  15. Stock Availability 1). Promotion Management 2). Mutually Good Forecasting 3). Harmonized Ordering info. Minimum Order Qty (MOQ) 1). Review MOQ setting 2). Mutually Good Forecasting 3). Central Order Quality Issue Communicate with Supplier About Metro Standard Price / Payment Issue Temporarily block the article in Metro system Review with supplier and update If necessary. Improper Ordering and Delivery Period setting 2. Action Plan & Status Key Reasons & Approaches Approach Reason 1). Supplier Responsibility taking 50% back 15

  16. 2. Action Plan & Status Key Reasons & Approaches Reason Approach 1). Review Ordering related SOP if needed 2). Discipline store ordering behavior by training ect. Store does not place order in regulated way 2). Retailer Responsibility Taking 25% Discipline the goods receiving staff in store via his / her superior Store does not Input goods receiving date in time 3). Common Issue taking 25% 1). Define the main problem (e.g. art. Status) 2). Master Data Clearance Project involving Supplier / Retailer Incorrect Master Date back 16