David Steer

Kraft Foods Russia

November, 17, 2009

понедельник, 23 ноября 2009 г.

David Steer

Kraft Foods Russia

November, 17, 2009

Technological advantages driving successful collaboration between Manufacturers and Retailers: EDI&GDS

понедельник, 23 ноября 2009 г.

How to save a few million dollarsat the touch of a button?

David Steer

Kraft Foods Russia

понедельник, 23 ноября 2009 г.

Agenda

• The Problem• The History• The Project

• First Results• Next Steps

понедельник, 23 ноября 2009 г.

Is EDI alone, enough?

External factors• Almost all EDI customer orders

contain errors• Customers do not accept/pay

invoices with incorrect information• Up to 30% customer refusals

caused by missing/incorrect data• Weak EDI practice leads to

multiplicity of standards and approaches, hampering development

Internal factors• Customer overdue levels impact

cash flow• Huge manual workload for order

corrections = wasted overhead• Low Invoice Accuracy and CFR due

to non synchronized master data• High cost of truck demurrages due

to long goods receipt procedure at customer warehouses (up to 9% of cost)

5

With growth of the Modern Trade we estimated future issues would explode >>> solutions became an imperative.

понедельник, 23 ноября 2009 г.

Industry standards via ECR Russia

• ECR (Efficient Consumer Response) in Russia (www.ecr-rus.ru)– established in 2003, now 58 member companies– Most biggest FMCG companies and retailers– members’ businesses exceed $US40 bn.– Kraft involved since 2003.

• ECR Russia contains 7 committees, 900+ committee members: – Category management– Shrinkage– Scorecard– Optimal shelf availability– Logistics– EDI/Master data

• ECR developed local EDI and GDS standards, based on best international practice

• Kraft GDS Pilot Project with Metro C&C 2008/2009. Live in July.

понедельник, 23 ноября 2009 г.

First GDS implementation in RussiaBenefits were instant.

Process Before GDS After GDS

Order processing 20% of orders with errors in Master Data

0% of orders with errors in Master Data

Up to one hour to fix errors in orders (incorrect EAN-code etc)

Not an issue. Time saving up to one hour daily per person

Product Launch - Average product roll-out took up to 2 months- Up to 2 weeks to enter new product into retailer systems- Big risk of human errors on both sides

- Increase speed to market for new products up to 50% - Only 30 minutes to publish, accept and synchronize new item- Errors minimized

Refusals due to incorrect master data

28% (from total refusals) 0

Credit notes due to incorrect master data

5.7 % (from total invoices)30 minutes/day

0%

Listing errors RUB >0.5M/year per customer 0

понедельник, 23 ноября 2009 г.

GDS accelerates new product launches by 50%

Item introduction

•Details partially sent by e-mail

2W Product analysis

•Category department access to all details

•Briefing•Approval•Further requests

1 W Completion

•Sales dept. fills in various questionnaires

•Send information to retailers category manager

1 W Store Product information•Category

manager checks info and pass it to database operator

2 D Edit & Publish

•Manual editing/entry

•Info to Stores

• New item listing procedure significantly simplifies communication between Sales and Buyer and allows to focus on business instead of copying information from one template/system to another

• However, this process does require strict procedures on both sides

8

понедельник, 23 ноября 2009 г.

GDS accelerates new product launches by 50%

Item introduction

•Details partially sent by e-mail

2W Product analysis

•Category department access to all details

•Briefing•Approval•Further requests

2 D Edit & Publish

•Manual editing/entry

•Info to Stores

• New item listing procedure significantly simplifies communication between Sales and Buyer and allows to focus on business instead of copying information from one template/system to another

• However, this process does require strict procedures on both sides

8

•All details via GDS

•Category department access to all details (excluding price) within buying system (MMS CAT)

•Approval via MMS CAT

•Access to all details via MMS CAT

понедельник, 23 ноября 2009 г.

Implementing Dispatch and Receiving advice beneficial and “opens a door” for EDI developments

• Despatch advice messages– Immediate availability of advice note and transport data to customer– Significantly reduces administration cost of goods receipt– Enhanced availability of goods with minimum stock inventories– Avoidance of manual input during goods receipt, reduced risk of

manual errors– Gives a base for generation of further EDI messages

• Receiving advice messages– Used to confirm receipt of goods at customer’s warehouse and

discrepancies between goods ordered and received– Immediate ability to analyze reasons for customer refusals

• Enables possibility to improve revenue recognition process through automation of Proof Of Delivery (POD)

• “Opens the door” for proper electronic invoicing

9

понедельник, 23 ноября 2009 г.

Our results for cost saving after implementing of DESADV/RECADV exceeds expectations

10

понедельник, 23 ноября 2009 г.

Next Steps: e-invoicing and daily sales & stocks monitoring

• Talking “the same EDI language” enables daily sales and stock monitoring through implementation of sales and inventory reporting messages (SLSRPT and INVRPT).

• Daily sales and stocks data give us the opportunity to measure On Shelf Availability (ePOS project at ECR)

• Electronic Invoicing via EDI by the end of 2009

• Legislation changes for acknowledgement of electronic invoices is in process for 2010

понедельник, 23 ноября 2009 г.

Call to Action…..

• Current Savings in the $ millions. Future Potential = tens of millions

• Huge Qualitative benefits especially in TIME & COMPLEXITY

• Technology and standards are readily available (ECR - Russia)

• Is there any reason why we aren’t all doing this as routine?

>>> Get into ECR and get your brands moving in the 21st Century.

понедельник, 23 ноября 2009 г.