Copyright © 2009 METRO Cash & Carry Russia Member of METRO Group
ECR International Forum – “Act Local”
Akin BayerMoscow, June 2nd, 2010
METRO Cash & Carry Russia
Page 2 Member of METRO GroupMETRO Cash & Carry Russia
670
Self-Service Wholesale
Food retailDepartment
storesNonfood specialty
METRO Cash & Carry – a core Division of METRO Group
Sales (bn): € 19.7Countries: 16Stores: 818
METRO Group sales 2009: € 65.5 bn
Cross functional companies
Sales (bn): € 11.3Countries: 6Stores: 441
Sales (bn): € 3.5Countries: 2Stores: 141
Sales (bn): €30.6Countries*:…. Stores*:
30
Page 3 Member of METRO GroupMETRO Cash & Carry Russia
METRO Cash & Carry is internationally leading self-service wholesaler
METRO Cash & Carry International
670 Stores in 30 countries
5.3 million m2 total sales area
106.000 employees
31 billion EUR Sales in 2009
METRO Cash & Carry Russia
2001 – start of operation
52 operative stores (federal)
13.000 employees
2.6 billion EUR sales in 2009
Page 4 Member of METRO GroupMETRO Cash & Carry Russia
METRO Cash&Carry participates actively in ECR initiatives worldwide
Anti theftprotection
Building Brands
Shrinkage
Food Safety
Couponing
Efficient Unit Loads Shelf ready
packaging
EPC Task Force
Category Management
GDS
RFID
Logistics
On ShelfAvailability
Enabling Technologies
Page 5 Member of METRO GroupMETRO Cash & Carry Russia
Economic developments in 2009 underline the necessity to foster deeper cooperation between retailers and suppliers
Drop in retail market development
23.5 23.8
29.4
2.90
5
10
15
20
25
30
35
2006 2007 2008 2009
Drop in currency rate
+38%+38%
Drop in customer confidence
Page 6 Member of METRO GroupMETRO Cash & Carry Russia
Satisfying customers needs and expectations is key
EDI
Supply chain & Supplier
collaboration
Category Management
Page 7 Member of METRO GroupMETRO Cash & Carry Russia
Successful category management requires a trustful relation with suppliers and producers
Selected intensified cooperation's
relationship turns into collaboration
exchange of information and data's
joint business building
Active category management approach fosters the relation between retailer & supplier
… with the main aim to serve customersneeds and to meet their expectations in terms of
availability
easy to find
quality
packaging
Page 8 Member of METRO GroupMETRO Cash & Carry Russia
Category management is the interface to the customer – findings category shopper helps us to indentify the decision drivers
45
33
27
18
12
11
9
5
4
4
62I have already bought these pralines and I like them
Specifics of taste and formula
Acceptable price
Producer company
Good value for money
Producer country
Brand
Beautiful pack
I wanted to taste novelty
Another person asked me
Different tastes in one pack
Decision Drivers
BRAND known product (62%), favourite taste (45%) manufacturer/ brand (27%)
PRICE (33%)
*Raffaello = 100% brand awareness, >17%* market share“Brand of the Year” in Pralines in 2009
Conclusion: Visual Anchorin the Category needed to:
bring shoppers in the aisle and help to orientate
visual Anchor = the strongest brand in the category
Page 9 Member of METRO GroupMETRO Cash & Carry Russia
Category management is the interface to the customer – findings from category shopper helps to identify the decision drivers
Usage of planogramsIntegration of visual anchors
Visual Anchor
Shopper Decision factors
Brand as recipe and price tier
Planograms based on:
Sales in RUR and Metro units Total Income Shelf Stock coverage Professional assortment Own Brands
Page 10 Member of METRO GroupMETRO Cash & Carry Russia
Supplier Collaboration aimed to improve availability and stock days at the same time
Stock days decrease* Service level*
Stock reduction measures allowed to reduce stock days:
Supplier discipline – more accurate deliveries due to adjusted time schedules and minimum order recalculation
Planning of promo-actions
Master data issues – timely price adjustment, missing, wrong bar-coding, timely articles blocking
Administrative issues – delivery documents completeness, certificates availability - supplier’s data sources (internet portal of the suppliers)
Out of Stock at supplier’s warehouse – forecasting improvement, production adjustments
*1Q 2010 vs Q1-Q4 2009:
0.44
5.77
3.98
6.37
0 2 4 6 8
Danone
Coca-Cola
Kraft
P&G
-1.53
-3.21
-2.85
-1.1
-4 -3 -2 -1 0
Coca-Cola
P&G
Unilever
Nestle
Page 11 Member of METRO GroupMETRO Cash & Carry Russia
EDI implementation proved significant benefits
EDI business impacts
EDI (Electronic Data Interchange) performs a great impact for MCC and supplier business processes:
- Process optimization
- Cost optimization
- Reliable and on-time payments
EDI solutions are significantly flexible for business needs, traceable and transparent
EDI is a considerably stable and well-performed technology.
Implementation milestones
EDI penetration results
Message CommentNumber of suppliers
Penetration (% of documents)
ORDERSPurchase order
3271 81,61%
DESADV Delivery note 515 25,39%
RECADVGoods receiving
497 20,23%
2005 2008 2009 2009
EDI launch
DESADVRECADV
Invoice SLSINVPRT
MCC RU is a “pathfinder” for EDI in Russia
Page 12 Member of METRO GroupMETRO Cash & Carry Russia
EDI INVOICE is the next milestone to be reached
Current EDI process together with paper
Paper invoice
Reconciliation of EDIand paper invoice
Invoice payment
Input of total data
Goods receiving data
Archive
EDI invoice
Retail chain
Sup
plie
r
Aim of the project: Implement EDI invoice with suppliers. As soon as necessary law changes are adopted immediately switch to EDI invoice without paper.
Current status: 63 suppliers are in
production, another 600 suppliers
are in test including Kraft foods,
Nestle, WBD.
Target 2010: receive 5% of the
invoices by EDI
Page 13 Member of METRO GroupMETRO Cash & Carry Russia
ECR activities are not only fostering customer orientation, but also an excellent dialog platform
improve efficiency by spotting non-productive processes
makes End to End Supply Chain processes and costs transparent
helps to reduce pipeline cost
supports reliable cooperation, best practice transfers between supplier and retailer
however, it’s an important dialog platform
ECR initiatives are depending on
shared vision “customer”
ready to share relevant information and best practices
mutual respect and trust between the players
full commitment
Page 14 Member of METRO GroupMETRO Cash & Carry International GmbH Page 14
Contact
AKIN BAYERManaging Director
METRO Cash & Carry LtdLeningradskoye Shosse, 71 G,125445 MoscowRussian Federation
Phone: +7 (495) 660 26 00Fax: +7 (495) 502 12 20Mobile: +7 (919) 991 94 09
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METRO Cash & Carry International GmbHGeschäftsführung/Executive board of management: Frans W.H. Muller (CEO); Dr. Andrea Francesco Martinelli; Dr. Christian Mielsch; Dr. Claudia Schlossberger; Thomas ZieglerSitz/registered office Düsseldorf, Amtsgericht Düsseldorf HRB 36616 - Commercial Register of the Duesseldorf Local Court HRB 36616