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Transcript of Common Goals Common Measures Webinar Slides€¢ Wegmans • CVS • Daymon ... Zone / Area /...
Enhancing Trading Partner Relationships with Common
Goals and Common Measures
The New GS1 Trading PartnerPerformance Management (TPPM) Standard
26 February 2009Matt Johnson, Oracle / Kraig Adams, The Coca-Cola Company
Global Standards Management Process ©2007 GS1 US
Trading Partner InitiativesState of the Industry
Challenge• Trading partner initiatives are ad hoc• Goals are not aligned• Evaluation metrics vary from company to company• No common basis for understanding results
DC VENDOR # VENDOR NAME ACTUAL �CASES ON HAND WEEKLY �SHIPMENTS AVERAGE �DAYS ON HAND Service Level1 8 99.72 14 96.43 14 98.44 10 100.06 22 99.87 13 100.0
Avg Days On Hand = 13.5 Avg = 99.1Avg Wks On Hand = 1.9
Last WeekTY LY Diff
VENDOR SUMMARY : Vendor Nbr : Date :
WAREHOUSEShips At Cost $0 $0 0.00%Demand LevelWarehouse Turns 0.00 0.00 0.00%Warehouse Weeks On Hand 0.00 0.00 0.00%Cost On Hand $0 $0 0.00%Cost On Order $0 $0 0.00%STORESales $0 $0 0.00%All Comp Store Sales $0 $0 0.00%Avg Price 0.00 0.00 0.00% Plan Plan % of Change
Weeks Service ServiceWeek Weeks Coverage Store Turns Level Level
Ending Inv. Movement Coverage Goal Cuts Turns Goals Stores GoalsFY '07
01/06/07 6,500 4,485 1.4 2.0 2 35.9 26.0 99.96% 95.0%01/13/07 10,208 4,837 2.1 2.0 16 24.6 26.0 99.67% 95.0%01/20/07 12,073 4,268 2.8 2.0 16 18.4 26.0 99.63% 95.0%
Average FY '07 9,594 4,530 2.1 2.0 11 26.3 26.0 99.8% 95.0%Goal per week 5,000
Global Standards Management Process ©2007 GS1 US
Industry Track (Collaborate)
Best Practices/ Standards
Documentation, Education,
Communication
Guiding Principles and Frameworks
Share Results
• StrategyAlignment
• JAG Framework
Focus on
Consumer
• Sustainability• Cross
Industry Integration
• Integrated Supply Chain
Share Our Supply Chain
Trading Partner Track (Competitive Advantage)
*Note: Utilizations of Industry Standards
Strategic Issues Between Trading
PartnersCommon Goals,
Common MeasuresSpecific Measures
& Priorities
Other Data Sharing
Opportunities
Consumer/ Shopper
Satisfaction• Knowledge, Skills & Capabilities
• Incentives & Rewards
• Organisation Design
Prepare People for New World
Industry ResponseNew Ways of Working Together
• Common Goals & Measures
• Information Sharing*
• EPC• Data Sync
Connect our Business
Information
Global Standards Management Process ©2007 GS1 US
Eliminate Disruptions
Prom
ote
Gro
wth
Collaborative ProjectsWith Great Return!
Aligned StrategiesAligned Resources: Butterfly to Diamond
Butterfly Diamond
BuyingSalesITDistributionLogistics MerchandisingAccountingMarketing
ITDistribution
Logistics Sales
AccountingMarketing
Weekly/MonthlyWeekly/MonthlyDay to Day interactions
QuarterlyQuarterlyCross functional Reviews
AnnuallyAnnuallyReview results, strategies, goals for year
Joint Business Planning Standard Measures and Common GoalsShared Tracking and Scorecard
Measured Results
New Ways of Working TogetherBest Practices
Global Standards Management Process ©2007 GS1 US
Eliminate Disruptions
Prom
ote
Gro
wth
Collaborative ProjectsWith Great Return!
Aligned StrategiesAligned Resources: Butterfly to Diamond
Butterfly Diamond
BuyingSalesITDistributionLogistics MerchandisingAccountingMarketing
ITDistribution
Logistics Sales
AccountingMarketing
Weekly/MonthlyWeekly/MonthlyDay to Day interactions
QuarterlyQuarterlyCross functional Reviews
AnnuallyAnnuallyReview results, strategies, goals for year
Joint Business Planning Standard Measures and Common GoalsShared Tracking and Scorecard
Measured Results
o
New Ways of Working TogetherBest Practices
Focus of today’s session
Global Standards Management Process ©2007 GS1 US
A New StandardTrading Partner Performance Management (TPPM)
• GS1 specification approved in November 2008• Approved by major companies:
• Wal-Mart• Carrefour • Safeway• Wegmans• CVS• Daymon
• Standard business measuredefinitions – ready to use
TODAY
• P&G• Coca-Cola• J&J• General Mills• Brown Forman• Georgia-Pacific• JM Smucker
Global Standards Management Process ©2007 GS1 US
17 Measures in 4 Categories
• Item Data Synchronisation (%) • Item Master Data Accuracy (%)
• Out of Stock (%)• Finished Goods Inventory Cover (Days)• Service Level / Fill Rate (%)• Order to Delivery Cycle Time (Hours)• On-time Delivery (%)
TPPMMeasuresTPPM
Measures
SalesSales OperationsOperations
Supply ChainSupply Chain Data AccuracyData Accuracy
• Sales Growth (%)• Share (%)• Sales Forecast Accuracy (%)• Retail Item Gross Margin (%)• Retail Gross Profit Margin (%)• Markdown (%)
• Order Item/ Quantity Change (%)• Unsaleables (%)• Invoice Accuracy (%)• On Time Payment (%)
Global Standards Management Process ©2007 GS1 US
“P&G has supported the development of the GS1 TPPM Standards and is committed to implement them. With the Standards defined, we will begin the process of incorporating them into our systems. This work is the foundation for setting common goals and common measures with our trading partners.”Milan Turk, Managing Director, Customer eCollaboration, Procter & Gamble Global Operations
“Wegmans Food Markets is eager to integrate the GS1 TPPM Standards into the framework of our New Ways of Working Togetherprogram. Having a clearly defined set of measures for the industry ensures the same language is being used in trading partner relationships, which is an important step in eliminating disruptions and allowing the trading partners to focus on the consumer.”Marianne Timmons, Vice President, Supply Chain and Global Business to Business, Wegmans Food Markets
Putting the Standard into Action
Global Standards Management Process ©2007 GS1 US
Sample DefinitionOrder-to-Delivery Cycle Time
Definition• The average length of time between order placement (fax, phone,
EDI) and the time product arrived and was available for unloading at the agreed customer location.
Formula
Where ReceivedDateTime = Date Time on which product is ‘checked in and available for unloading’ by the customer (including transit, warehousing, appointment delays)Elapsed time is measured in calendar hours, not business hours
( )
i
imeOrderDateTteTimeReceivedDaTimeiveryCycleOrderToDel i
ii∑ −=
GCI Scorecard BM11 (Lead Time)
Global Standards Management Process ©2007 GS1 US
Multiple Levels of Measurement
Product Scope Location Scope TimeframeGTINProductStyle / Color / SizeFlavorVarietyBrandClass / SubclassCategory / DepartmentLine of BusinessTrading RelationshipTotal
Stocking LocationStoreStore Region / ClusterZone / Area / ChannelDC / PlantLane or RoutePostal CodeCity / State / CountryGeographic RegionGeographic SubregionTotal
Day / Week / Month Quarter / YearMonth to DateQuarter to DateYear to dateRolling 4-week PeriodRolling 13-week PeriodRolling 12-month PeriodTime-Independent
For each measure, companies select the appropriate levels of product scope, location scope and timeframes to evaluate.
Global Standards Management Process ©2007 GS1 US
Calculation ParametersSupport Different Trading Relationships
Param
eters
Delivery time measurement basis
•P.O. need-by date•First appointment time•Last appointment time
Values
Out-of-stock measurement
method
•Manual audit•Perpetual inventory•Sales data analysis•RFID / EPC•Other
Inventory basis •On hand only•Pipeline inventory included
Demand estimation basis
•Forecast basis•Historical basis
Service level measurement basis
•Shipped quantity•Received quantity
Cost allocation basis
•Miscellaneous costs excluded•Miscellaneous costs included
Forecast type •Total•Promotional•Baseline
Synchronization calculation type
•Total items•Incremental items
RecommendedParametersare in Bold
©2008 GS113 Global Standards Management Process
Case 1Existing measure is in TPPM
Use TPPM
Suggest TPPM
Extension
NO YES
NO
YES
YES
NO
©2008 GS114 Global Standards Management Process
Case 2Existing measure is *NOT* in TPPM
Drop Use of Measure
Suggest TPPM
Extension
NO
YES
©2008 GS115 Global Standards Management Process
Case 3TPPM measure is not currently used
Do not use TPPM
measure
Do not use TPPM
Measure
YES
NO
YES
Global Standards Management Process ©2007 GS1 US
Scorecard ModelCategory 1 Category 2 Category 3 Category 4 Category 5 Category 6
Coke Dollar Sales
Coke Unit Sales
Supplier Penetration
Coke Case Sales
Category Dollar Sales
Wegmans Share
Item Data Synch
Invoice Accuracy
Deductions
Cat
egor
yB
rand
Com
pany
Supp
lyC
hain
Item Data Accuracy (WH)
Item Data Accuracy (DSD)
Coke Gross Margin Dollars
Fill Rate
Category Unit Sales
Category Gross Margin Dollars
Measure meets or exceeds goal
Measure is within 10% of goal
Measure is more than 10% off of goal
No data is available for this measure
No new data available this week (previous value shown)
Key
WK 13WK WK 13WK WK 13WK WK 13WK WK 13WK WK 13WK
Global Standards Management Process ©2007 GS1 US
Value of Scorecard
• Single source of the truth managing common goals and common measures• Less time preparing information and more time evaluating
business performance
• Snapshot against clearly defined goals• Consistency for monitoring health of business• Highlights areas needing potential clarification or
corrective action to alleviate disruption• Measures vary between DSD and Warehouse suppliers
• Fewer Supply Chain measures• Goal variance of 10% better for monitoring Scorecard• Weekly & Rolling 13wk monitoring was most valuable
Global Standards Management Process ©2007 GS1 US
TPPM Work Group
• 38 Retailer and Manufacturer Participants• Business Design Phase• Two Conference Calls
per Month• GS1 Community Room
for details• GSMP event March 23-26
(Los Angeles)• TPPM meeting March 23rd
JOIN THE TEAM!
1Statement of
Business Need
2Requirements Gathering &
Analysis
4Technical Solution Design
3Business Solution Design
5Pilot
6Posting
Implementationand
Feedback
Global Standards Management Process ©2007 GS1 US
Contact Details
Kraig ADAMSThe Coca-Cola CompanyO +(1) 404.676.0059E [email protected]
Matt JOHNSONOracleD +(1) 781.744.0548E [email protected]