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© 2010 IBM Corporation
Improving Business Results via the Implementation of GS1 Standards and Industry Best PracticesFindings of the TCGF Global Compliance Survey 2009-2010
© 2010 IBM Corporation
The Global Scorecard
A The Consumer Goods Forum tool for Internal and Trading Partner Collaboration
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A Key Enabler from the IT- Connecting Business for
Consumers Committee
© 2010 IBM Corporation
The Community or Who is behind it?
The Owner: TCGF / IT – Connect Our Business Committee– Merger of the Global CEO Forum, GCI and CIES.– Independent global parity-based consumer goods network.
650 retailers, manufacturers, service providers, others from 70 countries.
The Host: IBM – Technical host of the Global Scorecard tool.– Validity check and direct support for users.– Creates global reports and analyses.
The Community Builders: GS1 and ECR Organisations– Promote the use of the Global Scorecard by companies in their country.– Support for users.– Use the Global Scorecard to assess the implementation of GS1
standards.
The Team– Exists since 1999 and keeps the Global Scorecard aligned with today’s
and tomorrow’s business requirements.– Promotes the Global Scorecard and provides expert knowledge.
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© 2010 IBM Corporation
What is the Global Scorecard?
It is a tool that uses a common language and measurement system to enable– Companies Internally– Trading Partners Collaboratively– And, the Industry Collectively
To understand how well we are doing– Relative to the capabilities we have built and the benefits we expect those capabilities to
deliver
The Value of a Common Language and Measurement System
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© 2010 IBM Corporation5
The Global Scorecard - a Capability Assessment Tool has been designed 10 years ago to give you a detailed understanding of your ECR capability each year and to highlight specific improvement opportunities for your company. You are able to compare your company with the peers in your industry. Questions presented to the participant depend on the business type and industry sector.
Content
Profile
Used for the annual report
•Standard Capability Assessment (Measures the status of implementation)• Demand• Supply• Enablers (Item identification, Electronic messages and master data synchronization)• Integrators
•Business Measures (e.g. Service levels, inventory, out-of-stocks, lead time, costs, invoice accuracy)
•Implementation Measures (Measures the level of implementation for e.g. Item and location identification, EDI, Global Data Synchronization)
© 2010 IBM Corporation6
We observe that most of the standards increased over the last years for the retailers & wholesalers; as many of the new participating manufacturers are smaller companies some implementation levels are lower than in the years before
Manufacturers Retailers & Wholesalers
2007 2008 2009 2007 2008 2009
IM01 % of consumer units allocated a GTIN 97.1 96.8 92.0 91.7 97.3 96.6
IM02 % of cases/cartons/inners allocated a GTIN 82.9 87.6 86.6 77.4 82.6 87.0
IM04 % of pallets/unit loads labeled with SSCC 45.9 49.4 67.2 51.1 49.4 71.6
IM05 % of shipping or receiving locations that have been allocated a GLN 43.9 41.2 51.1 64.3 74.5 87.5
IM06 % of orders transacted via EDI 52.4 51.7 47.0 68.8 70.4 75.8
IM07 % of invoices transacted via EDI 41.5 47.7 45.6 63.4 67.1 78.6
IM08 % of shipments for which a despatch advice was transmitted via EDI 22.5 27.6 35.5 28.0 22.4 58.7
IM09 % of shipments for which a receiving advice was transacted via EDI 7.1 12.0 16.0 29.8 13.9 58.4
IM10 % of sales with synchronized master data between trading partners via the GS1 Global Data Synchronization Network 13.5 19.0 24.4 9.4 17.0 42.4
IM11 % of sales with master data loaded into a GS1-certified data pool (%) 37.7 41.6 **
IM12 % of active SKUs where the master data has been synchronized using the GS1 Global Data Synchronization Network 2.9 7.0 26.5
IM13 % of GTINs that are catalogued consistently with a GS1 Global Product Classification brick code 45.7 47.2 71.0
© 2010 IBM Corporation7
The number of the submitted KPI scorecards increased again in 2009/2010
Submitted Scorecards
0
1.000
2.000
3.000
4.000
5.000
6.000
2002 2003 2004 2005 2006 2007 2008 2009
KPIs
StandardCapabilityAssessment
Current survey data submitted from January 1, 2009 through April30, 2010
•5,624 KPI records accepted in 2010
•3,637 KPI records accepted in 2008
•2,788 KPI records accepted in 2007
•892 KPI records accepted in 2006
Increase driven by adoption of the Implementation Measures by GS1 MOs
© 2010 IBM Corporation8
… it is only a small tag, but the amount of data that is collected and can be analysed is enormous
Data sharing as imperative and basis for powerful analytics
ftp://public.dhe.ibm.com/common/ssi/ecm/en/cie03046usen/CIE03046USEN.PDF
Using GS1 Standards is the key for all activities
© 2010 IBM Corporation9
Many direct effects of the implementation of standards on the Business Measures could be captured in the Global Scorecard survey
Efficiency Customer Satisfaction Improved Quality Sustainability
Competitive advantage
• Time saving• Cost reduction• Improved supply chain operations• Improved visibility • Increased understanding of retailers needs and become preferred collaboration partner• Increased sales
• Improved client relationship• Improved customer satisfaction • Better information availability
• Improved data quality• Fewer invoice-disputes
• Improved Image & Brand• Less Waste• Optimized usage of resources• Better overview of inventory
• Supplier Service Level hž GTIN on consumer units
Ž GTIN on cases/cartons/inners Ž GTIN catalogued with GS1 Product classification code
• Store Service Level hž SSCC
Ž EDI for orders Ž EDI despatch advise Ž Sales with synced master data
Ž GTIN catalogued with GS1 Product classification code
• Annual Revenue Growth Rate h Ž Roll out and full implementation of Trading partner performance standards (E401)
• Out of stocks iž GTIN on cases/cartons/inners
Ž SSCC Ž EDI for orders Ž EDI for despatch advice Ž GTIN catalogued with GS1 Product classification code
• On-time delivery hŽ GTIN catalogued with
GS1 Product classification code
• Invoice accuracy hž EDI for invoices (manufacturers)
• Distribution costs iž GTIN on consumer units
Ž GTIN on cases/cartons/inners Ž Sales with synchronized master data via GDSN
• Order to delivery cycle time iž GTIN on consumer units
Ž GTIN on cases/cartons/inners
Improvements through implementation
Examples
© 2010 IBM Corporation10
Retailers & wholesalers tend to implement the standards on a higher average implementation level than manufacturers
47% 46%
36%
16%
24%
71%
87%
72%
88%
76%79%
59% 58%
42%
92%
67%
87%
51%
97%
0%
20%
40%
60%
80%
100%
GTINConsumer Unit
GTIN Case SSCC P allet GLN EDI Orders EDI Invoices EDI DespatchAdvice
EDI ReceivingAdvice
Sales withsynch. Data
P roductclassification
Manufacturers
Retailers & Wholesalers
© 2010 IBM Corporation11
There is still potential for many standards, especially Data Synchronisation
39%
27% 24%
8% 9%
20%
5%
12%
43%
51%
38%
45%44%
38% 35%18%
91%
24%
51%
27%
0%
20%
40%
60%
80%
100%
GTINConsumer Unit
GTIN Case SSCC P allet GLN EDI Orders EDI Invoices EDI DespatchNotes
EDI ReceivingAdvice
Sales withsynch. Data
P roductclassification
Values = 0
Values > 0
96% of all companies have indicated an implementation level
4,779 KPI scorecards
91% indicated an implementation level above 0
5% have responded by indicating a 0-implementation level
© 2010 IBM Corporation12
The fresh food & perishable produce industry is the driver of implementing measures, independently of the size of the company
Average implementation level and number of measures implemented
55%
60%
65%
70%
75%
80%
0 1 2 3 4 5 6Number of Measures implemented
Ave
rage
impl
emen
tatio
n le
vel o
f all
IM im
plem
ente
d
n=4779
Books, Journals, Music, Video
Heath & Beauty
Electrical Goods
Textile
Multiple product categories (incl. fresh food)
Dry Grocery, non food
Multiple product categories (without fresh food)
Fresh FoodDry Grocery (Food)
Home Improvement
Hardware
© 2010 IBM Corporation
Benefits of using GS1 Standards:
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© 2010 IBM Corporation14
Example – Distribution Costs
Industry Leaders
1 5 6 10Number of standards implemented
1%50
%51
%10
0%
Ave
rage
impl
emen
tatio
n le
vel o
f st
anda
rds
impl
emen
ted
Distribution costs: 11.4%
Distribution costs: 6.5%
- 43%
Industry Leaders, companies which have implemented at least 6 standards at an average implementation level of above 50% - manufacturer as well as retailer & wholesaler - profit from reduced distribution costs.
© 2010 IBM Corporation15
On-Shelf/POS Out-of-Stocks with the use of SSCC
3,8%
7,8%
Implementation of SSCC
No Implementation ofSSCC
Reduction by - 52%
Reduction by - 5.8%
Example – Out-of-Stocks
The use of SSCC positively affects the Out-of-stocks rate at the POS, which can be considerably reduced.
© 2010 IBM Corporation16
The use of SSCC or EDI for orders positively affects the Out-of-stocks rate at the POS, which can be considerably reduced
Customer Satisfaction
On-Shelf/POS Out-of-Stocks with the use of SSCC
3.8%
7.8%
Implementation of SSCC
No Implementation ofSSCC
On-Shelf/POS Out-of-Stocks with the use of EDI for orders
3.9%
9.7%
Implementation of EDI fororders
No Implementation ofEDI for orders
Reduction by - 4%
Reduction by - 5.8%
© 2010 IBM Corporation17
Companies utilizing SSCC or EDI for orders show significant improvement for the store service level/fill rate
Efficiency
Store service level/Fill rate with the use of SSCC
93.9%
88.0%
Implementation ofSSCC
No Implementation ofSSCC
Increase +5.9%
Store service level/Fill rate with the use of ED I for orders
93.0%
89.3%
Implementation of EDIfor orders
No Implementation ofEDI for orders
Increase +3,7%
© 2010 IBM Corporation18
Companies using GTIN on consumer units level on a higher implementation level gain advantage by an increased supplier service level
Efficiency
Supplier service level/Fill rate with the use of GTIN on consumer units level
94.3%
91.6%
Implementation >50% ofGTIN consumer units
level
Implementation 1-50%of GTIN consumer units
levelIncrease +2.7%
© 2010 IBM Corporation19
Companies who have EDI for invoices implemented on a level above 50% could improve invoice accuracy and save your company, as invoice accuracy does not only cause administrative costs, diminish customer loyalty but also delay in payment
Improved Quality
Invoice accuracy for manufacturers using EDI for invoices
97.2%
95.7%
Implementation of EDIfor invoices >50%
Implementation of EDIfor invoices 1 - 50%
Improved accuracy by +1.5%
© 2010 IBM Corporation20
Utilizing EDI for orders or GTIN on cases/cartons/inners level makes companies profit by lower distribution costs; distribution costs are one of the largest cost components in the company and therefore play an extremely important role
Sustainability
Distribution costs with the use of EDI for orders
5.4%
10.6%
Implementation of EDIfor orders >50%
Implementation of EDIfor orders 1-50%
Distribution costs with the use of GTIN on cases/cartons/inners level
7.7%
12.4%
Implementation >50% of GTINcases/cartons/inners level
Implementation 1-50% of GTINcases/cartons/inners level
Reduction by – 4.6%
Reduction by – 4.7%
© 2010 IBM Corporation
The More, the Better!
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The more companies and GS1 MOsengage in the Global Scorecard,
the more value companies internally,trading partners collaboratively, and
the industry collectivelywill get out of this powerful system!