© 2011 IBM Corporation Optimize your supply chain when utilizing standards Preliminary Findings of...

© 2011 IBM Corporation

Optimize your supply chain when utilizing standards

Preliminary Findings of Global Compliance Survey 2010

September 2011

© 2011 IBM Corporation2

The complexities of today’s economic environment and everexpanding global supply chains mandate new guidelines for peak performance.


IBM has analyzed the strategy of 664 Supply Chain Executives. Be part of the visionaries, unveil visibility with the help of standards and be at the cutting edge of your industry.

*Source: New rules for a new decade, A vision for smarter supply chain management, IBM October 2010: ftp://public.dhe.ibm.com/common/ssi/ecm/en/gbe03369usen/GBE03369USEN.PDF, part of the Smarter Commerce initiative

See what others don’t Unveil visibility with collaborative insight.


At the same time The Consumer Goods Forum has identified in their 2020 future value chain agenda that things not only need to be done differently, they also need to be done

collaboratively. By working together – not only as an industry but also with governments, NGOs and consumers –

we can achieve collectivelywhat none of us can achieve alone.

http://www.ciesnet.com/pfiles/programmes/futurevaluechain/2020-Future-Value-Chain-Report.pdf


Benchmarkyour company versus your peers regarding those adoptions by using


Global Scorecard(owned by The Consumer Goods Forum and administrated by IBM)

A Key Enabler from the for Internal and Trading Partner Collaboration


Key capabilities of the Global Scorecard:

Value through the scorecard

Reports “as-is” status on individual companies, country/regional and global level

Assesses key process performance relative to peer companies

Demonstrates gaps in performance levels

Helps to support the business case for improvement projects

Provides a report building tool that can be customized according to your specific requirements

Helps to measure success

Helps to establish priorities. Are you on the “bleeding edge” or are there advanced practitioners among your trading partners to help you get started?

Provides results and effects (business impact and value) of scorecards as demonstrated in the annual report and provides information from geographic regions and business types

Provides an on-line action planning tool that gives visibility of agreed actions and progress

Allows for the ability of multi-national corporations to manage global and regional programs

Data is anonymous and is treated highly confidential

The more scorecards submitted the more relevant results we receive…


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

8


62 countries worldwide

8,790 companies

9,099 KPI scorecards

Leading edge companies: 23 out of Fortune 500 companies

Total revenue: 2.25 trillion US$

Shared their insights in 2010 on the status of their standards and business

measures

Every year the data of the preceeding year is analysed in the

global scorecard survey

290 The Consumer Goods Forum members


Participation for Key Performance indicators is increasing every year (all industries, all business types)...

0

2.000

4.000

6.000

8.000

10.000

2004 2005 2006 2007 2008 2009 2010

Key PerformanceIndicators


0,0 USD

0,5 USD

1,0 USD

1,5 USD

2,0 USD

2,5 USD

3,0 USD

2004 2005 2006 2007 2008 2009 2010

KPIs

Revenue in Trillion

Representing an enormous value of the industry (all

industries, all business types)...


Global participation for this year’s survey (total sample, all industries)

798 17 8,008 3 267 6 9,099

Total

322,663 15,458 1,431,994 23,675 443,884 18,111 2,255,785

Number KPI Scorecards

Revenue KPI Scorecards (US$ m)


16

19

11

15

31

0

10

20

30

40

2006 2007 2008 2009 2010

More countries submitted more than 10 KPI scorecards in the last years


Analysis is done for Consumer Products Manufacturer, retailer and wholesaler


Intedependencies between KPIs and Business Measures show

supply chain efficiencies


Supplier Service Level improvement and boosting the GTIN on consumer unit level rate

Store Service Level improvement and boosting the GTIN on consumer unit level rate

Raw Material Inventory Cover and boosting the SSCC level rate

Retail Distribution Centre Inventory Cover and boosting the the EDI level for orders

GTIN on consumer unit implementation level <75%

GTIN on consumer unit implementation level >75%

93.4%

76.4%

29%more

95.5%

84.9%

19%more

Boosting your implementation level

50%less

SSCC implementation level <75%

SSCC implementation level >75%

35 days

17 days

GTIN on consumer unit implementation level <75%

GTIN on consumer unit implementation level >75%

35%less

EDI for orders implementation level <75%

EDI for orders implementation level >75%

26 days

17 days


50 days

Lead Time and boosting the EDI for orders level

Out of stock rate and using a receiving advice via EDI (Manufacturer)

Invoice accuracy and boosting EDI for invoices level (Manufacturer)

Distribution costs and boosting the EDI for orders level (Manufacturer)

EDI for orders implemenation level <75%


63 days21%less

Using no receiving adivce via EDI

Using a receiving advice via EDI

3.5%

5.2%

32%less

EDI for invoices implemenation level <75%

EDI for invoices implementation level >75%

98.5%

93.6%

3.5%less

EDI for orders implemenation level <75%


5.8%

10%

42%less


Supplier

Raw Material

Distribution

Manufacturer

Companies having implemented standards show at the same time

efficiencies along the whole supply chain

32% less Out of stocks

Happy customer

3.5% higher Invoice accuracy

35% less Retail Distribution

Centre Inventory Cover

50% less Raw Material

Inventory Cover30% higher Supplier

Service Level

19% higher Store Service Level

42% lowerDistribution costs

Warehouse

Retailer

21% shorterLead time

Please note: the Global Scorecard is not set up

that we can see cause and effects. We can only say that if companies have implemented certain IM we can at the same time

observe efficiens.


Standards to be measured

Measure Explanation

% of consumer units allocated a GTIN% of cases/cartons/inners allocated a GTIN

The GTIN (Global Trade Identification Number) is a globally unique number to identify trade items (in databases), and is therefore the foundation for

Global e-commerce.

% of pallets/unit loads labeled with SSCC The SSCC (Serial Shipping Container Code) is used throughout the SC as entity identifier for item tracing.

% of shipping or receiving locations that have been allocated a GLN The GLN (Global Location Number) is used to identify physical locations.

% of orders transacted by EDI Transmission of orders between organizations by electronic means.

% of invoices transacted by EDITransmission of invoices between organizations by electronic means.

% of shipments for which a despatch advice was transmitted by EDI Shipments that are accompanied by an electronic despatch advice message transmitted by electronic means.

% of shipments for which a receiving advice was transacted by EDI Shipments that are accompanied by an electronic receiving advice message transmitted by electronic means.

% of sales with synchronized master data between trading partners by the GS1 GDSN

The GDSN (Global Data Synchronization Network) is an internet-based, interconnected network of interoperable data pools that enables companies around the globe to exchange accurate, compliant,

standardized and synchronized supply chain data with their trading partners using a standardized Global Product Classification.

% of sales with master data loaded into a GS1-certified data pool (%) Sales with the use of synchronized master data.

% of active SKUs where the master data has been synchronized using the GS1 Global Data Synchronization Network

SKU (stock keeping units) where the master data has been synchronized by GDSN

% of GTINs that are catalogued consistently with a GS1 Global Product Classification brick code Enabler for GDSN

© 2011 IBM Corporation20 Note: Data averages are not weighted. The sample contains 90% manufacturer and 10% retailer and wholesaler.

4,8

12,5

9,3

32,0

47,7

48,6

45,1

48,0

85,0

97,1

12,2

25,3

26,0

46,3

47,7

55,9

60,7

80,4

93,0

98,6

0% 20% 40% 60% 80% 100%

% of consumer units allocated a Global Trade Item Number (GTIN)

% of cases/cartons/inners allocated aGlobal Trade Item Number (GTIN)

% of GTINs that are catalogued onsistently with a GS1 Global Product Classification brick code

% of orders transacted via EDI

% of shipping or receiving locations that have been allocated a Global Location Number (GLN)

% of pallets/unit loads labeled with Serial Shipping Container Code (SSCC)

% of invoices transacted via EDI

% of sales with synchronized master data between trading partners (GDSN)

% of shipments for which a despatch advice was transmitted via EDI

% of shipments for which a receiving advice wastransacted via EDI

Increase

Increase

2006 Survey

2010 Survey

Implementation levels of KPIs improved a lot between 2006-2010

by the panel sample

(companies which participated in both surveys)


CP Retailers and wholesalers tend to implement the standards on a higher average implementation level than manufacturers (worldwide). Interacting with many more parties makes an efficient supply chain even more important…

52%

41%

30%

22% 22%

70%

90%

67%

78%81% 80%

59%62%

15%

90%

57%

73%

55%

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 and Wholesalers


TCGF manufacturers are ahead of the non-TCGF-members in implementing measures…

50%

18%

80%

25%

38%

54%

59%

64%

92%

96%

27%

3%

7%

14%

13%

18%

23%

16%

38%

71%

0% 20% 40% 60% 80% 100%

Product classification

Sales with synch. Data

EDI Receiving Advice

EDI Despatch Notes

EDI Invoices

EDI Orders

GLN

SSCC Pallet

GTIN Case

GTIN Consumer Unit

Non-TCGF members

TCGF members


18%

68%

68%

86%

91%

81%

76%

95%

99%

2%

13%

49%

63%

64%

73%

48%

79%

93%

0% 20% 40% 60% 80% 100%

Sales with synch. Data

EDI Receiving Advice

EDI Despatch Notes

EDI Invoices

EDI Orders

GLN

SSCC Pallet

GTIN Case

GTIN Consumer Unit

Non-TCGF members

TCGF members

… as well as the TCGF retailers and wholesalers are ahead of the non-TCGF-members


Average implementation level and number of measures implemented

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

0 1 2 3 4 5 6 7 8 9Number of measures implemented

Ave

rag

e im

ple

men

tati

on

leve

l of

all

IM im

ple

men

ted

An efficient supply chain is essential for the FMCG industry – this industry is leading the group of implementing measures; very high results have also the print and digital industry, as Journals need also a on time delivery

Books, Journals, Music, Video

Heath and Beauty

Electrical Goods

Fresh / Frozen Food

Home Improvement

Textile

Dry Grocery, food

Dry Grocery, non food


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

2009: 16%2009: 52%

2009: 28% 2009: 4%26%

59% 12%

3%

In general, companies tend to implement the standards they use at a high level, even higher than we observed in the 2009 survey

Comapnies having more than 6 Implementation Measures at an

average level of above 51% implemented


Most of the companies responded have only one or two implementation measures in place

20801925

1087

701610

506

327

133 86 42 46 90

400

800

1200

1600

2000

2400

1 2 3 4 5 6 7 8 9 10 11 12

Number of IM implemented

Nu

mb

er o

f co

mp

anie

s


There is still potential for many standards, especially Data Synchronization

35%27%

21%

5% 4%

13%

5%

38%

66% 57%

60%

66%

48%

21%

34% 15%

91%

21%

48%

24%

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

7,904 KPI scorecards

91% indicated an implementation level above 0

5% have responded by indicating a 0-implementation level


Finnish Results

Manufacturer Finland

Manufacturer Worldwide

Retailer & Wholesaler

Finland

Retailer & Wholesaler Worldwide

2010 2010 2010 2010

IM01 % of consumer units allocated a GTIN 89.9 89.9 92.5 96.9

IM02 % of cases/cartons/inners allocated a GTIN 86.1 73.4 82.2 90.3

IM04 % of pallets/unit loads labeled with SSCC 39.0 57.1 15.4 66.6

IM05 % of shipping or receiving locations that have been allocated a GLN 25.3 55.3 27.4 78.4

IM06 % of orders transacted via EDI 30.4 51.5 57.2 81.3

IM07 % of invoices transacted via EDI 32.8 40.5 43.3 79.9

IM08 % of shipments for which a despatch advice was transmitted via EDI 24.6 30.1 21.1 59.4

IM09 % of shipments for which a receiving advice was transacted via EDI ** 22.3 ** 62.4

IM10 % of sales with synchronized master data between trading partners via the GS1 Global Data Synchronization Network ** 22.2 ** 15.1

Number of KPI scorecards

Revenue in m US$

All industries 216 4,619

CP manufacturer, retailer & wholesaler

178 3,230


3 year Results for Business Measures Worldwide (Revenue-weighted Averages)

Manufacturers Retailers & Wholesalers

2008 2009 2010 2008 2009 2010

BM01 Annual Growth Rate (%) 5.9 3.1 3.6 4.3 6,6 1.6

BM02 Supplier Service Level/Unit Fill Rate to Customer Distribution Center (%) 96.7 97.8 96.8 89.9 90.9 91.7

BM03 Store Service Level/Unit Fill Rate to Customer Distribution Centre (%) 96.3 93.6 95.3 92.8 90.6 95.3

BM04 On-Time Delivery (%) 92.1 91.7 94.2 86.0 89.1 87.2

BM06 Raw Materials Inventory Cover (days) 19.8 15.4 21.8

BM07 Manufacturer/Supplier’s Finished Goods Inventory Cover (days) 35.7 31.4 33.9

BM08 Retail Distribution Centre Inventory Cover (days) 20.7 13.1 18.8

BM09 Retail Store inventory Cover (days) 30.1 37.6 17.9

BM10 On-Shelf/Point-of-Sales Out-of-Stocks (%) 4.7 3.9 4.3 4.8 3.5 3.0

BM11 Order to Delivery Cycle Time (hours) 68.0 62.8 66.5 46.3 50.5 44.8

BM12 Distribution Costs (% of sales value) 7.0 7.9 7.5 4.9 2.9 3.2

BM13 Invoice Accuracy (%) 93.8 96.4 95.9 84.7 82.0 83.2

BM14 Retail Shrinkage Rate (%) 1.6 1.5 2.6

** insufficient data available to produce a benchmark, n<5


3 year Results for Implementation Measures Worldwide (Revenue-weighted Averages)

Manufacturers Retailers & Wholesalers

2008 2009 2010 2008 2009 2010

IM01 % of consumer units allocated a GTIN 96.8 92.0 89.9 97.3 96.6 96.9

IM02 % of cases/cartons/inners allocated a GTIN 87.6 86.6 73.4 82.6 87.0 90.3

IM04 % of pallets/unit loads labeled with SSCC 49.4 67.2 57.1 49.4 71.6 66.6

IM05 % of shipping or receiving locations that have been allocated a GLN 41.2 51.1 55.3 74.5 87.5 78.4

IM06 % of orders transacted via EDI 51.7 47.0 51.5 70.4 75.8 81.3

IM07 % of invoices transacted via EDI 47.7 45.6 40.5 67.1 78.6 79.9

IM08 % of shipments for which a despatch advice was transmitted via EDI 27.6 35.5 30.1 22.4 58.7 59.4

IM09 % of shipments for which a receiving advice was transacted via EDI 12.0 16.0 22.3 13.9 58.4 62.4

IM10 % of sales with synchronized master data between trading partners via the GS1 Global Data Synchronization Network 19.0 24.4 22.2 17.0 42.4 15.1

IM11 % of sales with master data loaded into a GS1-certified data pool (%) 41.6 ** 73.6

IM12 % of active SKUs where the master data has been synchronized using the GS1 Global Data Synchronization Network 7.0 26.5 15.4

IM13 % of GTINs that are catalogued consistently with a GS1 Global Product Classification brick code 47.2 71.0 69.7

** insufficient data available to produce a benchmark, n<5

Note: lower values are due to many new smaller manufacturers participating in this year’s survey


Regional Breakdown – Consumer Products Manufacturers – Business Measures for 2010 (Revenue-weighted Averages)

North America South America Europe Asia Asia-Pac

Weighted average Weighted average Weighted average Weighted average Weighted average

BM01 Annual Growth Rate (%) 2.6 11.5 3.6 5.4 4.9

BM02 Supplier Service Level / Unit Fill Rate to Customer Distribution Centre (%)

97.2 92.4 97.4 98.1 97.7

BM03 Store Service Level / Unit Fill Rate (%) 93.7 ** 96.2 98.4 98.1

BM04 On-Time Delivery (%) 93.4 90.0 96.4 99.1 99.0

BM06 Raw Materials Inventory Cover (days) 18.7 21.5 19.8 26.2 26.2

BM07 Manufacturer/Supplier's Finished Goods Inventory Cover (days)

35.8 34.1 31.0 33.0 36.7

BM10 On-Shelf/Point-of-Sale Out-of-Stocks (%) 4.8 10.3 5.5 1.2 1.5

BM11 Order to Delivery Cycle Time (hours) 76.2 77.7 56.6 23.7 33.8

BM12 Distribution Costs (% of sales value) 8.7 6.6 5.8 4.4 4.3

BM13 Invoice Accuracy (%) 94.7 96.2 95.1 99.5 98.7

Note: Sample for Australasia is too small for a Business Measure analysis.** insufficient data available to produce a benchmark, n<5


Regional Breakdown – Consumer Products Manufacturers – Implementation Measures for 2010 (Revenue-weighted Averages)

North America South America Europe Asia Asia- Pac

Weighted average Weighted average Weighted average Weighted average Weighted average

IM01 % of consumer units allocated a GTIN 99.1 100.0 87.0 99.7 99.7

IM02 % of cases/cartons/inners allocated a GTIN 93.7 98.5 66.1 96.9 97.5

IM04 % of pallets/unit loads labeled with SSCC 89.7 45.1 53.0 12.5 26.9

IM05 % of shipping or receiving locations that have been allocated a GLN 63.7 71.6 56.5 17.4 30.5

IM06 % of orders transacted via EDI 71.6 67.7 51.1 24.5 28.2

IM07 % of invoices transacted via EDI 71.5 53.7 36.2 9.6 13.6

IM08 % of shipments for which a despatch advice was transmitted via EDI 45.0 0.6 32.0 4.8 4.7

IM09 % of shipments for which a receiving advice was transacted via EDI 21.0 0.1 32.2 1.6 1.6

IM10 % of sales with synchronized master data between trading partners via the GDSN 38.0 4.7 16.2 0.6 6.8

IM13 % of GTINs that are catalogued consistently with a GS1 Global Product Classification brick code 95.3 37.2 56.3 12.7 12.7


For additional insights about the global scorecard, please visit www.globalscorecard.net: There are several documents available:

• The executive report (White paper)

• Report with tables

For further information please contact Rüdiger Hagedorn, CGF ([email protected]) or David McCarty, IBM ([email protected]).


Trademarks and notes

©IBM Corporation 2011

IBM, the IBM logo, and ibm.com are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with the appropriate symbol (® or ™), these symbols indicate US registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml.

Other company, product and service names may be trademarks or service marks of others.

References in this publication to IBM products or services do not imply that IBM intends to make them available in all countries in which IBM operates.

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