Use the ECR scorecard to benchmark and improve your performance: The ECR scorecard from the Global Commerce Initiative (GCI) enables you to benchmark your supply- and demand-side collaboration against the performance of other companies. This session explains the use of the scorecard and includes a short explanation of basic ECR techniques.

1. South Africa – Scorecard
in action
August Iwański
Chief Executive - CGCSA
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2. 1st October 2002
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3. Mission
To enable retailers, wholesalers,
manufacturers, logistics and service
providers in the South African Consumer
Packaged Goods industry to WORK
TOGETHER to meet consumer needs
better, faster, and at least cost.
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4. Vision
 “The voice, adding value”
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5. Board
Co-Chairs:
Directors:
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6. Key activities
 Supply and Demand Chain efficiencies –
under the banner of ECR
 Crime Prevention Programme
 Global Standards including data
synchronisation and catalogue (PDC.za)
 Legal and Regulatory (non-competitive
issues including Food Safety)
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7. Objectives
 Best practice processes
 To develop and promote best practice processes for joint
demand and supply management projects.
 EAN●UCC standards endorsed by GCI
 To support and disseminate the adoption of identification
and communication standards i.e. the Enablers and
Integrators (as agreed through EAN●UCC and endorsed
by the GCI) which enhance inter-company logistics and
increase efficiencies for trading partners.
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8. Objectives (cont. 1)
 Industry research and education
 To improve market understanding of member
companies through industry research and
education.
 A voice for the industry
 To provide a voice for the industry to government
and other key bodies on all relevant industry,
legal & regulatory affairs.
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9. Underlying principles
 Focus on the consumer
A commitment to the belief that sustained business
success stems only from providing consumers with
products and services that consistently meet or surpass
their demands and expectations.
 Working Together
The greatest consumer value can be offered only when
organisations work together, both internally and with
their trading partners, to overcome barriers that erode
efficiency and effectiveness.
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10. South African FMCG Value Chain
Analysis (VCA)
 First study commissioned in 1999
 To determine the potential cost savings in the SA FMCG
Industry
 11 Manufacturers and 6 Wholesale / Retail participants
 Key Results
• Manufacturers were ahead of retailers
• R2.55 billion potential saving for consumers
• R5.1 billion potential saving in a once off inventory reduction
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11. South African FMCG Value Chain
Analysis (VCA) (cont. 1)
 In 2004 a new study was commissioned
 To measure progress of ECR implementation in
the SA FMCG Industry
 To Identify opportunities for further improvement
 22 Manufacturers & 6 Retailers/Wholesalers
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12. VCA Project - Purpose
 Snapshot - Determine the degree of implementation,
 Trend - Identify whether there has been progress
since the 1999 study
 Industry - Identify opportunities for industry initiatives
to implement improvements
 Benchmark - Allow participating organizations to
benchmark themselves against the SA FMCG industry,
as well as run global benchmarks
 Action - Help participants identify opportunities and
improvement potentials and specific action steps
 Trigger - Deliver a trigger for the SA industry to start
talking TO rather than AT one another
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13. Working together
22 Manufacturers, 6 Retailers
National Brands
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14. Sample Composition
22 Manufacturers, 6 Retailers/Wholesalers
Participant Composition
NB: Some participants have filled in more than one scorecard, as they
scored for several categories.
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15. Survey Findings – Key Performance
Indicators
 The Supply Chain is neither lean nor efficient
 17 days more inventory in the SA Supply Chain
than the global
 Averages Case fill / service level is inadequate:
• Averages On time delivery: Manufacturers 90.2% vs.
retailers 87.3%, which means that 10-12% of deliveries
are late
 Unnecessary frictions in order cycle & sorting out
problems
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16. Survey Findings – Key Performance
Indicators (cont. 1)
 Retailer DCs seem to not yet have yielded the expected
benefits
 Similar store inventory levels for DSD and DC replenished operations
 Supply Chain as a whole is not very responsive
 Long lead times / replenishment cycles, NDDs
 Average level out-of-stock on shelf is between 9 and 10%
 Supply Chain operates in a traditional push approach
 Despite pledges towards collaboration current business practices
between retailers and manufacturers remain predominantly “push” and
deal driven
 Performance measuring is not standardized or a regular
practice
 The South African FMCG industry needs to operationally a standard
set of performance measures which is continuously monitored,
reviewed and acted upon
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17. KPIs - Averages
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18. 1999 – 2004 – 2007 Total ECR
80%
70%
60%
50%
Manufacturers
40% Retailers
30%
20%
10%
0%
1999 2004 2007
(target)
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19. 1999 – 2004 – 2007 Total ECR (cont. 1)
 Since 1999 survey – ECR-SA implementation shows
moderate progress.
 Retailers embracing ECR principles slightly more than
manufacturers, both parties are virtually on par on overall
ECR score.
 Participants have indicated that over the next three years
they want to get from a piloting stage to the point where
the roll out of ECR principles is starting to yield real
benefits to the business.
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20. 12-May-05
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21. 12-May-05
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22. 12-May-05
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23. 2005 Action Steps
 CGCSA Board agreed to focus on 4
projects identified from the VCA
Analysis:
1. On Shelf Availability
2. Standardized Industry Key Performance
Indicators
3. Category Management Methodologies
4. Training and Skills Development
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24. Lessons Learned
 Understanding of the principles depicted on the
scorecard is critical
 CEO Commitment essential
 Cross-functional team - directors and senior
management attendance at the workshop is
essential
 Choose the right partner/facilitator
 Adequate time is given for the completion of KPI’s
 Three workshops per company must be held
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25. Lessons Learned (cont. 1)
 Enough time must be allocated after the
workshops to re-visit participating companies to
review data before presenting
 Do not compare against your local competitor –
benchmark against global
 Less is more
 Regular feedback
 Conduct the survey at least every 4-5 years to
monitor progress and keep top of mind
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26. Finally, to conclude
Just do it!
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27. The end
Thank you
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