Top Editors ... Supply chain is top of mind

Title: Supply chain is top of mind
Date: 01/06/2007
Autor: By Tarun Patel, Head of Supply Chain, IGD

When the IGD recently asked some leading decision makers in the retail logistics and supply chain sector to outline the key challenges for the next two years, the two issues that came to the fore were Retail Ready Packaging (RRP) and Collaborative Planning, Forecasting and Replenishment (CPFR).
RRP, which is packaging that is custom-designed to take products from the manufacturer to the consumer more quickly, easily and cheaply, has become something of a Holy Grail in recent years. Retailers are more aware than ever that the last 50m to the shelf is the most expensive and the least controllable part of the total supply chain, and RRP can play a role in minimising costs at this point.
Although RRP can bring significant benefits to the industry, it involves start-up costs for suppliers and implementing it successfully also requires very clear communication along the whole supply chain. Trading partners need to be clear about the most appropriate form of packaging that is right not only for the product but crucially for the formal of the store - in terms of size of shelf, handling equipment and product facing - as well as the overall look and feel of the product on shelf.
Alpro, the European soya food products manufacturer, has recently adopted RRP solutions for its yoghurt products. As part of its strategic packaging review, Alpro negotiated with retailers from an early stage and as a result of this it claims to have obtained more listings in selected categories, and improved distribution in others.
A significant hurdle to achieving its goal was the need to convince the business internally, across a range of countries, that RRP development was a worthwhile investment. Once successful in this, Alpro opted to change all of its packaging simultaneously, and has adopted the greater use of colour; smaller cases, and branding on the outer case and the removal of brown cardboard. The company now sees RRP as a win-win scenario for both supplier and retailer and believes that the key learning for suppliers is to get involved as early as possible.
The second most important priority highlighted by senior logistics managers was CPFR, which provides significant financial and logistical benefits in allowing them to forecast demand more accurately. According to one estímate, availability issues cost up to £3bn (€4.5bn) per year, and, although IGD research reveals that only 55% of suppliers are currently practicing CPFR, the industry has recognised that better forecasting, and greater flexibility in replenishment can offer huge savings. As retailers predict even greater use of promotions to drive sales in future, improved forecasting and replenishment is likely to become even more essential to meet demand.
Both RRP and CPFR implementation are seen as critical in maintaining a customer driven supply chain. But what is striking is how implementation of either requires improved collaboration between suppliers and retailers, and better sharing of supply chain data and information. Organisations must make a cultural shift to recognising that sharing commercially sensitive data can happen without it becoming a free-for-all. Testimony to this is ASDA, part of Ihe world's biggest retailer Wal-Mart, which has an extremely successful CPFR system that is free for all suppliers to use once they have agreed the conditions.
Critically, the success of sharing this kind of information will be in the execution, not the strategy. CPFR collaboration should be viewed as a learning process, with logistics, sales and marketing teams all being involved with the design and forecasting, and with clear planning for errors built-in to the forecasting process. Similarly, while the design of RRP is important, the implementation process is fundamental to its success, and suppliers, wholesalers and retailers need to be very clear with one another upfront about their perspectives on what is required.

Forecasting improved at Weetabix
To improve the information flow for its supply chain, Weetabix, which produces Weetabix, Alpen and Ready Brek brands of cereals for 80 different countries throughout the world, has introduced TXT software at its principle site in Northamptonshire, UK.
The TXT e-solution software is designad to ensure greater manufacturing efficiencies, warehouse stock reduction, and better transport utilisation, in the face of increasing retailer promotions.
"Both retailers and manufacturers benefit from increased collaboration," said Jeff Seagrave, head of forecasting at Weetabix. "Both have the same objective: to take out the peaks and troughs of the supply chain, so there are no out-of-stocks and no disappointed customers. The risks of not properly understanding a promotion these days are getting greater and greater, so demand and promotion planning tools ensure that budgets are achieved and shelves remain stocked."
According to Mr Seagrave, around a third of all sales are promotionally led, so the use of TXT e-solution software will allow Weetabix to measure the true impact of sales and allow for greater profitability.

Tracking bread delive
Groupe Jacquet, part of the Limagrain Group, which bakes over 70,000 boxes of bread a day for French and Belgian consumers, has implemented ImagelD's Visidot system to provide full traceability of its fresh bread shipments at six of its plants in France.
The shipment verification and traceability solution includes Visidot Readers, handheld barcode scanners and Visidot Local Management Software, which manages the entire logistics process.
RFID solutions were an option, but the cost per tag was prohibitive. Instead, when preparing a customer order,
Groupe Jacquet's dispatch operator now uses the Visidot Local Management
System to retrieve a list of items from Groupe Jacquet's existing Lawson/lntentia MOVEX Enterprise Resource Planning (ERP) system. Before any loaded pallet leaves the warehouse, the forklift truck driver places the pallet in a defined área in front of the Visidot Reader, which captures all Ítems on the pallet in less than one second. If an item
appears on the pallet that is not included in the customer order, an alarm is activated and a visual indication of the exact location of the Ítem on the pallet is displayed on the interface, enabling the operator to remove it and continue with the loading process.
For homogeneous pallets, where all items are the same, the operator clicks the 'homogeneous' button on the handheld interface and scans a single labe!. The Vísidot Local Management System automatically associates the type of item scanned with a predefined set of rules, which indicates the total quantity of items on the pallet.
After each pallet has been scanned, the Visidot Local Management System automatically prints a pallet label, which references each specific item on the pallet from this point forward in the supply chain. After all pallets in the order have been scanned, the system generates a report that displays which items have been sent and which items in the order are outstanding. This data is sent over an Electronic Data Interchange (EDI) interface to customers.
For each pallet read, the Visídot system exports an XML file that includes the barcode data from every ítem in the pallet to Groupe Jacquel's exísting ERP system which records these ítems in its database and returns the necessary data for printing of a pallet label. This pallet label is produced in common EAN-128 SSCC format and can be read with any standard handheld barcode reader further down the supply chain.