TPA Product Freshness Team: Improving Product Freshness · Rob Shifter – Nestle Bob Schuler –...

TPA Product Freshness Team: Improving Product Freshness

Trading Partner Alliance (TPA) Supply Chain

Background: In May 2013 the FMI / GMA Supply Chain Committee held an Ideation Session to identify areas for TPA focus. Several sub-committees were formed in key focus areas • Our sub-committee’s focus: identify product freshness

issues throughout the supply chain and create initiatives that the TPA could launch to drive improvements

Sub-committee: Product Freshness

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Product Freshness Sub-Team Members

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Scott Andrews – Wegmans Food Markets, Inc.

John Coyle – White Wave

Steve Dollase – Inmar

Greg Johnson – Kraft Foods

Nick Konat – Target

Duane Montague – Reily Foods

Pat Neville – CVS

Marjorie Porzycki – Kraft Foods

Rob Shifter – Nestle

Bob Schuler – Albertsons

Isabel de Sousa – Clorox

Daniel Triot – GMA

Pat Walsh - FMI

= Presenting Today

#1: The Shoppers Mandate Recent Shopper Research1 on Freshness:

– Among some of the most profitable shopper segments, availability of “high quality, fresh products” is the #1 factor driving choice of a retailer

– 82% of shoppers always check freshness / expiration dates when they shop

– 67% of shoppers wish there was a better way to know if food is fresh

– Only 35% of shoppers believe that the freshness / expiration dates on products are always accurate

#2: Expired product is a major source of waste in our shared Supply Chains

– Unsaleable product is a multi-billion dollar problem

– Additional costs and risk throughout the supply chain

1. Inmar shopper study, December 2013

Why Focus on Freshness?

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Product Innovation

Supplier Supply Chain

Retailer Supply Chain

Consumer Pantry

Key Processes:

• S&OP Process • Joint Business Planning

• New Item Launches

• Set Service Levels for New Items

Key Processes: • VMI Performance

• Alignment with Retailer Goals

• New Item Introduction and Execution

• Item Exit Strategy Planning

Key Processes: • Days of Supply Targets

• Store Process for Pulling Product

• Analyzing Unsaleable Data

• POS Data Sharing

• Item Exit Strategy

Key Processes: • Interpretation of Code Dates

• Readability of Code Dates

Product Freshness Framework

Team Focus Areas:

Code Dating Best Practices

Data Visibility

Demand Planning / Forecasting

KPI’s & Collaboration

Product & Packaging Best Practices

Data Visibility

Data to Support Freshness Efforts

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PLANT >>>>> DC >>>>>CUST

WAREHOUSE>>>>> STORE >>>>> RECLAIM

Historical Visibility

More Recent Visibility

Examples of Available Case Quantities Shipment History Quantities Received Quantities Received Units

Data Code Dates Code Dates by Order Inventory Positions Sales Dollars

Inventory Positions Case Quantities Days Of Supply Days Of Supply

Inventory Positions Code Dates

Sources of Data:

Mfg Internal

SystemsX X

Customer Portal X X X

Customer Provided

(Excel)X X X

Cust Data through

3rd Party (Rsi)X X X

X X X X X

Package Quality Receiving Receiving Damage Damage

Case Quality Damage Damage Shelf Management Good Product

Shelf Life Shelf Life Shelf Life

Package Quality Package Quality OSA

Case Quality Case Quality

3rd Party Audits

(Inmar) and

Examples of

Available Data

Item A 11.2 Month

Shelf Life

Length of Arrow Represents Shelf Life in Months

Illustration 1: Customer X Examples of Buying Patterns, shelf life and reclaim Understand Patterns and adjust

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Illustration 2: Customer Y Examples of “Ticking Time Bomb” Go Check Inventory NOW

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Illustration 3: Customer Z Examples of Buying Patterns, shelf life and reclaim Understand Patterns and adjust

Length of Arrow Represents Shelf Life in Months

Reclaim Units Store Receipts Units Store On Hand Units

Total Sales Units

Item A 11.1 Week Shelf Life

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Illustration 3: Continued

Item B 12.7 Week Shelf Life

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KPIs &

Collaboration

Potential Structure and Process Recommendations

Supplier – Concept of ‘Freshness Advisor’

Retailer – Focus on Reverse Logistics

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Freshness Advisor: The Concept

Unsaleables

Industry problem for years without a quick-solve, magic bullet

Best Practices

A variety of approaches may be required to address unsaleables

Solutions

As root causes are identified, implement solutions, assign tasks, and track progress

Forward Change

Change behavior and processes going forward to ensure different results

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Team Approach

Cross-functional involvement to address specific issues:

Use proven menu of ideas to discuss with the team:

• Retailer: Buying, Merchandising, Supply Chain, Distribution Operations

• Supplier: Sales, Customer Service, Supply Chain

• Basic practices • Velocity • Promotion Management • Product Lifecycle • Business Practices and Policies

Team Approach

Proven Menu

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Collaboration:

Data-Driven Solutions

• Identify available sources of data, such as shipments, code dates, unsalesables, etc.

• Utilize retailer, supplier, or third party data sources

Pareto Opportunities

• Identify largest financial opportunities or main sources of disruptions

• Focus on trends

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Internal & External

Alignment

• Common Goals and Measures • Aligned Resources • Clear Roles and Responsibilities

Product & Packaging Best Practices

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Packaging Innovation to Facilitate Product Freshness

Secondary Packaging

• Distribution

• Shelf-ready packaging

• Inner pack configuration

Consumer/Sell Unit Packaging

• Date code innovation

• Date code quality

• Tray/display pack

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Secondary Packaging: Distribution

Case design to call attention to date-sensitive products upon receipt and DC pick process

Case coloring

Bold print on cases

Bar coded dates on cases

BOLD

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Secondary Packaging: Retail

Case and inner pack configuration

Tray/display pack configuration

Retail-ready case packaging

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Consumer/Sell Unit Design

Front-facing date code indicators

Color changing labels to show

remaining shelf-life

Consistent date code production

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Code Dating Best Practices

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3 primary considerations related to code dates

Shelf Life Remaining

Days at Manufacture

Days when Shipped

Based on Ingredient Life

Verbiage of Code Dates

Sell by

Best when used by

Best Before

Use By

Based on:

• Category

• History

• Manufacturer

Preference

• Perishability

Actual Printed Code Dates

Legibility

Readability

Clarity

Location on Package

For:

• Consumer

Understanding

• Store Rotation

• Freshness

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Actual Printed Code Dates

Manufacturers and Retailers with private label should ask

Can a Shelf Stocker easily read the date for proper rotation?

Can a Consumer easily find and understand what the code date means?

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Actual Printed Code Dates

• Combining Dates with Lot Numbers on Same Line

• No contrast between Ink and Background Color

(Dark on Dark, Light on Light)

• Hidden Dates (Under flaps or wrapper)

• Font size and Italics (Aging Population)

• Use of Abbreviations (BB=Best By)

• Noting somewhere on label, where and what the

code date means elsewhere

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Examples of Readable Dates with Description

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Examples of Readable Dates with Description Date Line with Lot Number creates confusion

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Examples of Readable Dates with Description Noted Elsewhere on Label:

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Code Date with NO reference anywhere on what the date means:

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Examples of Dates but with Abbreviations:

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Examples of Contrast Issues:

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Examples of Harder to Find or Read:

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Examples of Harder to Find or Read:

Can’t Read Code

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Examples of Problems:

Illegible Date

Almost hidden under flap

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Examples of Problems: Double Stamp – Can’t read

Can’t decipher

No Date

Stamp across color break

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Actual Printed Code Dates: Summary

This is something that EVERY manufacturer and retailer with private label can take on.

• Many opportunities can be addressed internally

• Foster internal education and awareness across functions

• Conduct an audit of all code dates - identify issues, rank

opportunities and execute improvements

• Create a code date score carding process

• Set up a feedback system; 3rd party can collect data and

provide support for continuous improvement

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Update on TPA Leadership Dialog

related to Code Dating

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Summary & Next Steps Summary • Product freshness is an increasingly important issue for our industry,

and there are a variety of opportunities for you to influence freshness within your organization:

• Leverage shared data to identify opportunities and support continuous improvement

• Collaborate internally and with trading partners and apply outcome-based KPIs

• Apply best practices in packaging and code dating

Next Steps for the TPA Product Freshness Team • Build out a total supply chain view of product freshness and shelf life • Collaborate with TPA leadership on standards for code dating

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Volunteers to join our team are always welcome!

Q A &

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