Frank Zimmermann
( Customer Service Development Manager )
ECR BALTIC FORUM
RIGA, 14th of November 2007
On Shelf Availability
Agenda :
1. Unilever
2. It all starts with the shelf
- statement 1
- Unilever : global OSA - activities
3. OSA Germany
- GS1 working group
- consumer reaction
- GS1 : next steps
4. Root cause : examples / snap shots
5. Why OSA is important
6. OSA : Unilever approach
- statement 2
7. ECR activities
- statement 3
Bee :
Represents creation,
pollination, hard work and
bio-diversity. Bees symboliese
both environmental challenges
and opportunities.
Heart : a symbol
of love, care and health.
Tea : a plant or an
extract of a plant,
such as tea. A symbol
of growing and farming.
Unilever mission: Vitality
Vitality is the heart of Unilever. Our
mission is to meet everyday needs for
nutrition, home hygiene and personal care
with brands that help people feel good
and get more out of life.
Hair: a symbol of beauty and
looking good. Placed next to the
flower it evokes cleanliness and
fragrance; placed near the hand
It suggests softness.
Unilever
206 000 employees,Ice Cream, Foods ambient & chilled,Home and Personal Care
business in around 150 countries
• ca. 40 Billions € Turnover
• 150 Mio. shopper every day for Unilever products
• 5 Billion € for advertising & promotions
• 1 Billion € invest in R&D
• 5.169 employees in R&D
• 337 production sites on 6 continents
Unilever
Unilever
22 Countries
83 Sourcing Units
It all starts with the shelf
It all starts with the shelf
Europe�UK
�Poland
�Finland
Latam�Argentina
�Brazil
�Chile
�Mexico
`
Asia�Thailand
�Vietnam
�Indonesia
AMET�South Africa
�Turkey
�Arabia
NA�US
�Canada
�Germany
�Portugal
�Baltics
�Denmark
�Italy
Europe�UK
�Poland
�Finland
Europe�UK
�Poland
�Finland
Latam�Argentina
�Brazil
�Chile
�Mexico
`
Asia�Thailand
�Vietnam
�Indonesia
AMET�South Africa
�Turkey
�Arabia
Project Planned
NA�US
�Canada
Project in Place
�Germany
�Portugal
�Baltics
�Germany
�Portugal
�Baltics
�Denmark
�Italy�Denmark
�Italy
Unilever : global OSA activities
� Availability Increase
� Retailer 1 94% to 99.6%
� Retailer 2 91% to 97.5%
� Biggest Losses:
� Retailer 1 (H & B)
� New product
introduction (NPD)
� Order process (demand
signal)
� BOS organisation
� Active SKU v. inactive
SKU’s database errors
� Retailer 2
� Inventory Accuracy (PI
alignment)
� Promotional Forecasting
Availability Increase
� Foods 97% to 98.8%
� HPC 89% to 98.2%
Biggest Losses :
� Retailer 1 (Foods)
� merchandising errors
� Order process (demand signal)
� Retailer 2 (HPC)
� Co-packing failure
� Order process (demand signal)
� BOS - shelf organisation
� Factory Supply Failure
� Promotional Forecasting
� Active SKU v. inactiveSKU’s database errors
Availability Increase
� Retailer 3 94% to 97%
(best in class – globally)
� Retailer 1 88% to 97%
Biggest Losses
� Retailer 3(Laundry & Beauty)
� New product introduction
(NPD)
� Order process -tbc
(demand signal)
� PI alignment (inventory
accuracy)
� BOS organisation
� Retailer 1 (Frozen)
� Cabinet Replenishment
� BOS organisation
� Order process
� New product introduction
(NPD)
ASIA UKMIDDLE EAST
Global
Retailer 2
Global
Retailer 1
Global
Retailer 2
Global
Retailer 3Global
Retailer 1
Unilever : global OSA activities
Unilever : global OSA activities
Jan’05 Dec’06
OSA growth
OSA growth
+ 2.8%
+ 3.2%
Jan’05 Dec’06
96.2%
99.0%
95.7%
98.9%
40
stores
32
stores
Retailer 2
Retailer 1
Poland
� Development of a root cause catalogue alongside the
Supply Chain ( SC ) : factory to shelf ����
critical points:
- flow of information
- flow of goods
- organization: people,
processes
� Investigation : study of shopper behaviour in case of Out of Shelf ����
� Development and publication of an “application recommendation”
on OSA : done on 7th ECR days Germany 2006 ����
GS1 – Germany : OSA – working group
Milestones I
.
.
.
HQ CustomerHQ Industry
GS1 – Germany : OSA – working group
Buys a different brand
Buys same brand elsewhere
Returns later
Buys a different size
Buys nothing
Consumer reactions on out of
stocks (carried out in
hypermarkets)
37 %
21 %
17 %
16 %
9 %
4 billion €
lossper year
Deutschland
44 %
11 %
11 %
17 %
14 %
1 billion €
lossper year
70 %
13 %
0 %
17 %
Next Steps :
-Run OSA Projects to gain practical expertise
-Integrate / investigate in new technologies, like RFID
-Involvement of additional business branches
-Investigate in : OSA & promotions-Investigate in : OSA & seasonalities-Investigate in : OSA & working capital
=> Program projected up to end 2008
GS1 – Germany : OSA – working group
OSA – working group : some root causes
Hand and
Body
Shelves
difficulty to
keep neat
OSA – working group : some root causes
Smaller
similar
packages
are getting
mixed
together
OSA – working group : some root causes
When spaces were
empty they became
dumping grounds
by consumers.
OSA – working group : some root causes
Shelf looks full
– 2 SKU’s are
missing
OSA – working group : some root causes
Back Store Organization
OSA – working group : some root causes
Why is OSA Important?
� Out of stocks can be a lost sale
for both manufacturer and
Customer
� It is the biggest reason for
Customer loyalty and brand
defections
� Once you lose a shopper, it’s
difficult to get them back
� All of our global strategic Customers have identified OSA as a top priority
Unilever Approach
To On Shelf
Availability
Unilever : 5 Step Approach
Principles of the 5 Step Approach
Loss One
Why is the product not on
the shelf when it is in the
store stock system and in
the back of store?
ProcessPeople
PlaceProduct
Redesign cabinets / 5S -
Tesco and Unilever
Product horizontally
stacked in cabinets place
Col our coding of packaging
- Tesco
Poor Packaging
identification
Simplify packaging labelling
- Unilever
Artwork difficult to
differentiate
Review no. of units / work
with Tescos for theirrequi rements - Tesco and
Unilever
Too many overstocks
Better shelf organisat ion / 5S
- Tesco and Unil ever
Ri ght space for
right products
Better Category
Management organis ation -
Tesco and Unilever
Categori es split
across aisles
Category Management /
better pl anograms - Tesco
and Unilever
Planograms -
linear not cube
Redesign BOS, Revi ew
equipment used - Tesco
Product too high toreach in
Traini ng - Tesco and UnileverCommunication of
promotional ends
Better staff training / Incentives
- Tesco
Not aware of OOS
Review process / 5S - TescoDiscontinued lines left
on shelf
Better equipment planning - Tesco &
Unilever
Rol l cages not sorted at
DC
Use OPL’s to hightlight - Tesco and
Unilever
Working cages process
was not cl ear
Review process - TescoStock rotation
difficult
Review sales / shelf levels - Tesco and
UnileverMerchandising
Plan compliance
Review no. of units / work
with Tescos for their
requirements - Unilever
Case sizes too bi g
Recruitment - TescoInsufficient
merchandising personnel
Better training of staff
activities - Tesco
Product left on floor too
long
• TPM focuses on continuous improvement by
empowering all employees
• Unilever has 15 years of experience with TPM
in factories in all regions
• TPM ensures sustainable solutions
• Unilever has used the TPM toolkit to develop
the OSA improvement programme
Top to top meeting
Two times a year, OSA is on the agenda during
the top to top meeting between Retailer and Unilever
Steering group
Quarterly meeting with top management. Customer
Director, Supply Chain director Unilever & retailer
Project team
Monthly meeting with CD and SC project manager, Customer Relationship
manager to determine root cause and to take corrective actions
Key Success factors
• Commitment of Retailer and Unilever to improve On Shelf Availability
• Defining clear targets
• OSA is an integral project
• Focus of Unilever and the Retailer on the extended Supply Chain
• Willingness to share information and insights in all parts of the Supply
Chain and transactional processes
Agree definition
• Preferably, measurement of absolute out of stock (OOS) and nearly out of
stock (NOOS) = number of products is less than the number of facings
Strategic Alignment, agree definitions
NOT Found in BoS
4 15%
Found in BoS
8 30%
OOS
26 100.00%
On Hand
45%12
On Order
6 25%
NOT on Order
8 30%
NOT On Hand
14 55%
Why are these lines left on shelf?
Why is it not onthe shelf?
Why is it not in the Store?
Why was it not found?
In Depot
4 16%
NOT in Depot
2 8%
Discontinued
4 15%
Where is the product?
Why are theynot
ordered?
Loss Tree
ProcessPeople
Place Product
Redesign BOH / 5S - Retailer
and Unilever
Product in wrong
place
FIFO / Ageing report to be
implemented - Retailer
Product expired / Out of date
Simplify packaging
labelling - Unilever
Wrongly labelled product
Review no. of units / work
with retailers for their
requirements - Retailer and
Unilever
Too many units in a
case
Better BOH organisation / 5S
- Retailer and Unilever
Product in
wrong location
Better BOH organisation -
Retailer and Unilever
Product not
visible in BOH
Category Management /
better planograms - Retailer
and Unilever
Inadequate space
on shelf
Redesign BOH, Review
equipment used - Retailer
Product too high to
reach in BOH
Better staff training / Product
packaging produced with local
language or product pictures-
Retailer And Unilever
Language barrier
Training - Retailer and UnileverNew personnel
Better staff training / Incentives
- Retailer
Not aware of OOS
Review process - RetailerInadequate replenishment
procedure
Better equipment planning - RetailerEquipment not available
to offload
Shorten product leadtime - Retailer and
Unilever
Product in receiving
area but not in its bay
Training and label review process -
Retailer
Misleading label
on shelf
Review minimum stock levels. Review
ordering process. Shorten delivery lead
time - Retailer and Unilever
Product
just arrived
Colour coding of packaging -
Unilever
Product not easy to identify
Recruitment - RetailerInsufficient
merchandising personnel
Better planning of staff
activities - Retailer
Merchandisers too busyProblem 1
Why is the product not on the
shelf when it is in the store
stock system and in the back
of store?
Root Cause Analysis
� Establish Improvement Workshops to:
- Review information and status based around the loss
tree data
- Using the loss tree, categorise the losses
- Analyse each major loss and agree activities to solve
the problem
- Capture these activities on the action plan
Keep a record of actions and agree dates for completion
- Review the action list at the start of each workshop
Implement Solution
Gene Toner : OSA Manager Europe
( Efficient Consumer Response )
Electronic Data Interchange ( EDI ) ����
Information with products ( EAN, EAN128 ) ����
Masterdata Informationssystem ( SINFOS ) ����
Continuous Replenishment Program ( CRP ) ����
Collaborative Planning Forecasting Replenishment ( CPFR ) ����
On Shelf Availability ( OSA ) ����
Radio Frequency Identification ( RFID ) ����
Shelf ready package ( SRP ) ����
…
Unilever is engaged in GS1 workingparties, to collaborate with industry and trade partners
ECR
Chris Bull : Unilever Chief Customer Dev. Officer
end, thank You for listening
Questions
?
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