osa presentation 20100602-ea

© ECR France 2010

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Wednesday 2d of June 2010

On-Shelf AvailabilityEva ALCAIDE,

B2B Manager, AUCHAN International (Group),Co-chair of the French OSA working group

The concept of OSA has been introduced through Europe by ECR France.

Listen to the OSA insights from the Global Leaders. On-Shelf Availability in Russia is the lowest in Europe. Some say this is a problem - we say it's an opportunity.

20% Out-of-stocks = additional 6% to annual sales! During the session we will share the best practices on OOS reduction and cases with leading retailers

© ECR France 2010

2/23

Sharing ECR France experience on OSA

The 3 mains principles of OSA Working Group in ECR France?

Measurement

Actions to improve Shelf Availability

© ECR France 2010

3/23 The 3 mains principles of OSA Working Group in ECR France

Why is it an ECR Working Group ?

What do we need to work on OSA in ECR ?

A joint continuous improvement process work on OSA ?

© ECR France 2010

4/23Why is it an ECR Working Group ?

The Shoppers behavior when meeting an OOS

for retailerfor

manufacturer

other national brand

28% = ---

retailer's brand or first prices

25% +++ ---

other national brand

4% = --

retailer's brand or first prices

3% ++ --

other type same brand

9% d° 9% = =

purchase somewhere else before

12% -- =

real postponement

12% = =

Somewhere else 7% d° 7% -- =

CONSEQUENCES

Postponement 24%

PURCHASE BEHAVIOUR

same type other brand

53%

other type other brand

7%

Su

bst

itu

tion

69%

No

pu

rch

ase

31%

© ECR France 2010

5/23 What do we need to work on OSA in ECR ? A common definition of OOS

« A product is considered as out of stock in one store when a consumer cannot buy it because it is not there, although the product is usually available on the shelves of this store »

Not included : theoretical assortments / negotiated , non availability of a (new) product at a POS despite having been advertised. …

© ECR France 2010

6/23 A joint continuous improvement process to work on OSA ?

Alert

Stakes evaluation

Ranking

Root causes investigation

Corrective actions identification

Implementation

ResultsResults

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7/23

Measurement

Detailed sales information to build the measurement tool

On the largest perimeter

To provide a tool that we can share between Retailers & Manufacturers

Examples of Dashboard

© ECR France 2010

8/23

Detailed sales to build the measurement tool

Daily rate complete stock-outs (DRCS) : 1/ 6 = 17%

Daily rate partial stock-outs (DRPS) : 2/ 6 = 33%

Mon. Tues. Wed. Thurs. Fri. Saturday

Zero sales

Abnormally low sales for a Tuesday

Abnormally low sales for a Saturday

Lost sales: usual sales (€) - real sales (€)

© ECR France 2010

9/23

On the largest perimeter

Based on daily POS data automatically collected by IRI France

All the French hypermarkets (1 692 stores) members of ECR France– Auchan, Carrefour, Carrefour Market, Cora, Géant, Intermarché, Leclerc, Système U,

Monoprix, …

61 categories in 10 departments

Number of products followed: the 20/80 of each category with minimum rotation level 3 887 consumer references

Frequency of deliveries– summer (June - August)– fall (September – November)– winter (December - February)– spring (March – May)

© ECR France 2010

10/23 To provide a tool that we can share between Retailers & Manufacturers

Tool characteristicsSpecifications

Undisputable• No human intervention• No interpretation• Based on store data

Continuous Based on daily data : consumer point of view

Shared Use by retailer and manufacturerRun by a third party, neutrality

Bottom-up Everything aggregated from store data

Exhaustive Every store, every item

© ECR France 2010

11/23Examples of Dashboard (1/6)

Global Stakes in €

4,33,9 4,2 4,2

4,6

2,12,2

2,2 2,22,0

6,46,1

6,4 6,46,6

Hiver 2009 Printemps 2009 Eté 2009 Automne 2009 Hiver 2010

% Enjeux en Ruptures Complètes % Enjeux en Ruptures Partielles

December-February 2010

% stakes in complete OOS % stakes in partial OOS

© ECR France 2010

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4,6%3,9%

4,4% 4,3% 4,6% 4,6% 4,7%

6,1% 6,4%

2,0%

2,1%1,9% 2,3% 2,0% 2,1% 1,8%

1,8%1,8%

6,6%

6,1%6,3%

6,6% 6,6% 6,7% 6,5%

7,9%8,2%

HM Enseigne 6 Enseigne 3 Enseigne 1 Enseigne 5 Enseigne 2 Enseigne 7 Enseigne 8 Enseigne 4

ENJEU RC RELATIF ENJEU RP Nette RELATIF


Examples of Dashboard (2/6)Global stakes in € by retailer

© ECR France 2010


Global stakes in € by retailer and Department

0

1

2

3

4

5

6

7

8

EPICERIE SALEE

EPICERIE SUCREE

LIQUIDES

DPH CREMERIE

FRAIS NON LAITIERS LS

SURGELES GLACES

Enseigne 1 Enseigne 2 Enseigne 3 Enseigne 4

Enseigne 5 Enseigne 6 Enseigne 7 Enseigne 8


© ECR France 2010

14/23 Examples of Dashboard (4/6) Global stakes in € by Category

Global stake in € % of stake / category

Dairies 57 265 262 5,3%

Sweet grocery 51 649 765 7,3%

Salty grocery 29 590 045 8,2%

Soft drinks & water 23 040 575 5,4%

Fresh products without milk 21 538 360 6,5%

Frozen and ice cream 11 344 341 15,2%

Body care 10 915 560 4,8%

Detergent 10 751 829 19,0%

Beer 4 715 021 8,7%

Spirit 2 462 978 3,6%

TOTAL 61 categories 223 273 736 6,6%


© ECR France 2010


Complete & Partial OOS by Category

7,3%8,4%

7,3% 7,2%

4,6%

9,7%8,3%

17,3%

5,2%7,1%

15,8%2,9%

2,8%2,7%

4,3%

2,7%

2,6%

2,5%

1,2%

3,0%

3,6%

1,2%

10,2%11,1%

9,9%

11,4%

7,2%

12,3%

10,8%

18,5%

8,3%

10,7%

17,0%

INFO

SCAN ALIM

ENTAIRE

EPIC

ERIE S

ALEE

EPIC

ERIE S

UCREE

BRSA E

T EAUX

SPIR

ITUEUX E

T CHAM

PAGNES

BIE

RES ET

CIDRES

HYGIE

NE

ENTRETI

EN

CREMERIE

F

RAIS N

ON LAIT

IERS L

S

S

URGELES G

LACES

TRQC TRQP Net


60 categorie

s

Salty grocery

Sweet Grocery

Soft drin

ks &

waterSpirit Beer

Body Care

Detergent

Dairies

Fresh products

without m

ilk

Frozen & ice cr

eam

© ECR France 2010

17/23 Actions to improve the Shelf Availability

What has been achieved: – Root Causes & Decision Tree have been identified – People involved in OOS

Learning Next steps:

– Main sources of Out-Of-Stock in the Supply Chain– An “OOS one page document” for everyone

© ECR France 2010

18/23What has been achieved:

Root Causes & Decision Tree have been identified

(Assortment choice)

Communication between sales reps’ and department manager

Management promotion / standard product and NPI

Failing management of backroom or no backroom

Frequency and time of shelf replenishment (HR)

Is the product still listed and sold in

the POS ?

Shelf capacity unsuited for product rotation

Is it a promotion or a new product?

Is the product available in the

backroom?

The product is not on the shelf

•No

• No

•Yes

•Yes

•Yes

Failing PCB …

© ECR France 2010

19/23What has been achieved:

People involved in OOSRETAILER side

Marketing / Category manager• Marketing data, panels’ information

Buyer• RDC / suppliers service level

Consumer service • Customer complains / mail

RDC manager• RDC inventory cover• POS service level vs. POS orders

POS Manager• Turnover / department / month

Department manager• Shelf store checks• Defects in the supply automatic system• POS inventory cover• POS data / turnover analysis• Shopper complains

MANUFACTURER side

Marketing • Weekly average sales, panels’ information

Key Account• Service level analysis• Exception analysis / sales forecasts

Supply Chain• OOS analysis via CMI• Service level to RDC

Customer service• Variance delivered / ordered• Variance ordered / forecasted• Commercial disputes analysis• Production information• Outside events analysis

Sales reps• Store checks

Head office

Distribution center

POS

•PANELISTS / THIRD PARTIES• POS data analysis WAS per reference on sample• Store Checks, …

© ECR France 2010

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Learning

The measurement tool is a solid basis Retailer – Manufacturer couples: it works but

needs to be maintained No impact on the global result: roll-out Complexity to involve everybody

Need to build a “toolkit” with simple and easy to use “tools”

© ECR France 2010

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POINT OF SALE RESOURCES- Human resources planning - Management tools

PROMOTIONS - Forecasting and commitments- Switch standard / promotions

MERCHANDISING- Sales / shelf capacity / Packaging- Shelf replenishment frequency- Back room

Downstream Transport

RDC

Upstream Transport

MDC

MDC picking

PRODUCTS AVAILABILITY

- Sales forecast accuracy

- Quality

- Production

- Raw materials and packaging

Production

Next steps: Main sources of Out-of-Stocks in the supply chain

RDC picking Store

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