This document summarizes a shelf availability project between suppliers and retailers. It discusses a 5-step joint process to eliminate out-of-stock items, including suppliers measuring availability, root cause analysis, developing a joint action plan, executing the plan through supplier and retailer improvements, and analyzing progress. As a focus category, it examines baby diapers, finding high out-of-stock levels and key root causes like shelf filling issues and inventory record inaccuracies. The joint action plan for diapers includes improving case fill rates, aligning assortment data, and testing category space extensions. Initial results show over a 2x reduction in baby diaper out-of-stocks, but more is needed to reach the under 5% target

1. Improving Shelf Availability:Win/Win opportunity betweenSuppliers and Retailers

2. 2 Shelf availability project in P&G. Project Kick-off – Aug’07 Data validation and methodology clarification – Oct’07-Mar’08 Training and deployment to organization – Apr’08 In store root causing – as of Jun’08 Collaboration with retailers – as of Jul’09 Shelf Out of Stock project included in Joint Business Plan with several retailers – Jan’09 Target < 5%

3. 3 5-steps joint process for Shelf Out of stock elimination 1. Supplier: Measures availability 4. Joint efforts: Execute action plan 3. Joint efforts: Develop join plan to eliminate losses 2. Retailer: Provides help needed for root cause 2. Supplier: Does root cause for losses 4.aSupplier: Improve service to customer DC 4.b. Retailer: Improve in store operations, store replenishment 5. Supplier: Analysis of the progress/plan effectiveness

6. Customer’s DC service

7. Inventory records accuracy in store

8. Backroom arrangement

10. 6 BABY DIAPERS:Category with Highest Loyalty in P&G portfolio Baby Diapers OOS Implications: Loss for retailer= 60%(36%+5%+19%) Loss for supplier = 46%(22%+5%+19%) Источник информации: Исследование поведения покупателей в категории подгузников (Shopper II),

11. 7 Step 1: Measure availability: >20% OOS level on Baby Diapers

12. 8 Step 2: Root cause analysis: Key reasons for SOOS on Baby Care: #1 - 36% of SOOS - shelf filling issue (product in store, but not on shelf) #2 - 24% of SOOS - insufficient store replenishment #3 - 23% - inventory records inaccuracy Key challenges for shelf filling: 1. Large size of the packs – limited stock on the shelf 2. Insufficient diapers category size vs. # of SKU’s 3. Unbalanced space allocation between variants/brands

13. 9 Step 3-4: Joint Action Plan Key Actions to address SOOS issues: Improving case fill rate ex-P&G via by-customer volume forecasting Align assortment matrix/clean-up non-active EAN codes in Retailer/P&G database Joint work with retailers to improve category planograms based on SKU turnover Test Category Space Extension

14. 10 Step 5 – Analysis of current results Target < 5% First results: More than 2x times Baby Diapers OOS reduction within 1 year Need another 2x reduction to reach 5% target

15. 11 P&G learning on Shelf Availability Project: Win/win opportunity between retailers and suppliers Needs to be a joint effort supported by Top Management of both companies Now is the best time to start the project to drive like-for-like sales Need to focus on Categories with highest growth potential for Retailer and Supplier

16. THANK YOU!