Improving Business Results via the Implementation of
GS1 Standards and Industry Best Practices
Findings of the TCGF Global Compliance Survey 2009-2010
© 2010 IBM Corporation
The Global Scorecard
A The Consumer Goods Forum tool for Internal and Trading Partner Collaboration
A Key Enabler from the
IT- Connecting Business for
Consumers
Committee
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© 2010 IBM Corporation
The Community or Who is behind it?
 The Owner: TCGF / IT – Connect Our Business Committee
– Merger of the Global CEO Forum, GCI and CIES.
– Independent global parity-based consumer goods network.
 650 retailers, manufacturers, service providers, others from 70 countries.
 The Host: IBM
– Technical host of the Global Scorecard tool.
– Validity check and direct support for users.
– Creates global reports and analyses.
 The Community Builders: GS1 and ECR Organisations
– Promote the use of the Global Scorecard by companies in their country.
– Support for users.
– Use the Global Scorecard to assess the implementation of GS1
standards.
 The Team
– Exists since 1999 and keeps the Global Scorecard aligned with today’s
and tomorrow’s business requirements.
– Promotes the Global Scorecard and provides expert knowledge.
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© 2010 IBM Corporation
What is the Global Scorecard?
 It is a tool that uses a common language and measurement system to enable
– Companies Internally
– Trading Partners Collaboratively
– And, the Industry Collectively
 To understand how well we are doing
– Relative to the capabilities we have built and the benefits we expect those capabilities to
deliver
The Value of a Common Language and Measurement System
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© 2010 IBM Corporation
The Global Scorecard - a Capability Assessment Tool has been designed 10 years ago to give you a
detailed understanding of your ECR capability each year and to highlight specific improvement opportunities
for your company. You are able to compare your company with the peers in your industry. Questions
presented to the participant depend on the business type and industry sector.
Content
• Standard Capability Assessment (Measures the status of implementation)
•Demand
•Supply
•Enablers (Item identification, Electronic messages and master data synchronization)
•Integrators
• Business Measures (e.g. Service levels, inventory, out-of-stocks, lead time, costs, invoice accuracy)
• Implementation Measures (Measures the level of implementation for e.g. Item and location identification,
EDI, Global Data Synchronization)
Profile
Used for the
annual report
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© 2010 IBM Corporation
We observe that most of the standards increased over the last years for the retailers
& wholesalers; as many of the new participating manufacturers are smaller
companies some implementation levels are lower than in the years before
Manufacturers
Retailers & Wholesalers
2007
2008
2009
2007
2008
2009
IM01 % of consumer units allocated a GTIN
97.1
96.8
92.0
91.7
97.3
96.6
IM02 % of cases/cartons/inners allocated a GTIN
82.9
87.6
86.6
77.4
82.6
87.0
IM04 % of pallets/unit loads labeled with SSCC
45.9
49.4
67.2
51.1
49.4
71.6
IM05 % of shipping or receiving locations that have been allocated a GLN
43.9
41.2
51.1
64.3
74.5
87.5
IM06 % of orders transacted via EDI
52.4
51.7
47.0
68.8
70.4
75.8
41.5
47.7
45.6
63.4
67.1
78.6
IM08 % of shipments for which a despatch advice was transmitted via EDI
22.5
27.6
35.5
28.0
22.4
58.7
IM09 % of shipments for which a receiving advice was transacted via EDI
7.1
12.0
16.0
29.8
13.9
58.4
IM10 % of sales with synchronized master data between trading partners via the
GS1 Global Data Synchronization Network
13.5
19.0
24.4
9.4
17.0
42.4
IM11 % of sales with master data loaded into a GS1-certified data pool (%)
37.7
41.6
**
2.9
7.0
26.5
IM07 % of invoices transacted via EDI
IM12 % of active SKUs where the master data has been synchronized using the
GS1 Global Data Synchronization Network
IM13 % of GTINs that are catalogued consistently with a GS1 Global Product
Classification brick code
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45.7
47.2
71.0
© 2010 IBM Corporation
The number of the submitted KPI scorecards increased again in 2009/2010
Submitted Scorecards
6.000
• 5,624 KPI records accepted in 2010
5.000
4.000
• 3,637 KPI records accepted in 2008
• 2,788 KPI records accepted in 2007
• 892 KPI records accepted in 2006
KPIs
3.000
Standard
Capability
Assessment
2.000
1.000
0
2002
2003
2004
2005
2006
2007
2008
2009
Current survey data submitted from January 1, 2009 through April30, 2010
Increase driven by adoption of the Implementation Measures by GS1 MOs
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© 2010 IBM Corporation
Data sharing as imperative and basis for powerful analytics
… it is only a small tag, but the amount of data that is collected and can be analysed is enormous
Using GS1 Standards is the key for all activities
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ftp://public.dhe.ibm.com/common/ssi/ecm/en/cie03046usen/CIE03046USEN.PDF
© 2010 IBM Corporation
Many direct effects of the implementation of standards on the Business
Measures could be captured in the Global Scorecard survey
Competitive advantage
Customer
Satisfaction
Efficiency
•
•
•
•
•
Time saving
Cost reduction
Improved supply chain operations
Improved visibility
Increased understanding of retailers
needs and become preferred
collaboration partner
• Increased sales
Sustainability
Improved Quality
• Improved client relationship
• Improved customer
satisfaction
• Better information availability
• Improved data quality
• Fewer invoice-disputes
•
•
•
•
Improved Image & Brand
Less Waste
Optimized usage of resources
Better overview of inventory
Improvements through implementation
•
Supplier Service Level h
•
Store Service Level h
•
•
GTIN on consumer units
GTIN on cases/cartons/inners
 GTIN catalogued with
GS1 Product classification code
SSCC
EDI for orders
EDI despatch advise
Sales with synced master data
 GTIN catalogued with
GS1 Product classification code
Out of stocks i
•
GTIN on cases/cartons/inners
SSCC
EDI for orders
EDI for despatch advice
GTIN catalogued with
GS1 Product classification code
•
Invoice accuracy h
•
Distribution costs i
•
Order to delivery cycle time i
EDI for invoices (manufacturers)
On-time delivery h
 GTIN catalogued with
GS1 Product classification code
GTIN on consumer units
GTIN on cases/cartons/inners
Sales with synchronized master
data via GDSN
GTIN on consumer units
GTIN on cases/cartons/inners
Annual Revenue Growth Rate h
Roll out and full implementation
of Trading partner performance
standards (E401)
Examples
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© 2010 IBM Corporation
Retailers & wholesalers tend to implement the standards on a higher
average implementation level than manufacturers
100%
97%
92%
Manufacturers
88%
87% 87%
Retailers & Wholesalers
79%
80%
76%
72%
71%
67%
59%
60%
58%
51%
47%
46%
42%
40%
36%
24%
20%
16%
0%
GTIN
Co nsumer Unit
10
GTIN Case
SSCC P allet
GLN
EDI Orders
EDI Invo ices
EDI Despatch
A dvice
EDI Receiving
A dvice
Sales with
synch. Data
P ro duct
classificatio n
© 2010 IBM Corporation
There is still potential for many standards, especially Data Synchronisation
96% of all companies have indicated an implementation level
4,779 KPI scorecards
100%
5% have responded by
indicating a 0implementation level
Values = 0
5%
Values > 0
80%
60%
38%
12%
51%
91% indicated an
implementation
level above 0
45%
91%
44%
43%
40%
38%
51%
20%
35%
18%
39%
24%
27%
27%
24%
20%
8%
9%
EDI Receiving
A dvice
Sales with
synch. Data
0%
GTIN
Co nsumer Unit
11
GTIN Case
SSCC P allet
GLN
EDI Orders
EDI Invo ices
EDI Despatch
No tes
P ro duct
classificatio n
© 2010 IBM Corporation
The fresh food & perishable produce industry is the driver of implementing
measures, independently of the size of the company
Average implementation level and number of measures
implemented
80%
Average implementation level of all
IM implemented
Books, Journals, Music, Video
75%
Heath & Beauty
70%
Dry Grocery, non food
Multiple product
categories (incl.
fresh food)
Electrical Goods
65%
Textile
60%
Hardware
Multiple product
categories
(without fresh
food)
Dry
Grocery
Home
Improvement (Food)
Fresh Food
55%
0
1
2
3
4
Num ber of Measures im plem ented
5
6
n=4779
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© 2010 IBM Corporation
Benefits of using GS1 Standards:
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© 2010 IBM Corporation
Example – Distribution Costs
100%
Industry Leaders
50% 51%
Distribution costs:
6.5%
Distribution costs:
11.4%
1%
Average implementation level of
standards implemented
Industry Leaders, companies which have implemented at least 6 standards at an average implementation level of
above 50% - manufacturer as well as retailer & wholesaler - profit from reduced distribution costs.
1
14
10
56
Number of standards implemented
© 2010 IBM Corporation
Example – Out-of-Stocks
The use of SSCC positively affects the Out-of-stocks rate at the POS, which can be considerably reduced.
On-Shelf/POS Out-of-Stocks with the use of SSCC
No Implementation of
SSCC
7,8%
Reduction by
- 52%
Implementation of SSCC
3,8%
Reduction by
- 5.8%
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© 2010 IBM Corporation
The use of SSCC or EDI for orders positively affects the Out-of-stocks rate
at the POS, which can be considerably reduced
Customer
Satisfaction
On-Shelf/POS Out-of-Stocks with the use of SSCC
No Implementation of
SSCC
7.8%
Reduction by
- 4%
3.8%
Implementation of SSCC
On-Shelf/POS Out-of-Stocks with the use of EDI for orders
No Implementation of
EDI for orders
9.7%
Reduction by
- 5.8%
Implementation of EDI for
orders
16
3.9%
© 2010 IBM Corporation
Companies utilizing SSCC or EDI for orders show significant improvement
for the store service level/fill rate
Efficiency
Store service level/Fill rate with the use of ED I for orders
No Implementation of
EDI for orders
89.3%
Increase
+3,7%
Implementation of EDI
for orders
93.0%
Store service level/Fill rate with the use of SSCC
No Implementation of
SSCC
88.0%
Increase
+5.9%
Implementation of
SSCC
17
93.9%
© 2010 IBM Corporation
Companies using GTIN on consumer units level on a higher
implementation level gain advantage by an increased supplier service level
Efficiency
Supplier service level/Fill rate with the use of GTIN on
consumer units level
Implementation 1-50%
of GTIN consumer units
level
Implementation >50% of
GTIN consumer units
level
18
91.6%
Increase
+2.7%
94.3%
© 2010 IBM Corporation
Companies who have EDI for invoices implemented on a level above 50% could
improve invoice accuracy and save your company, as invoice accuracy does not
only cause administrative costs, diminish customer loyalty but also delay in payment
Improved Quality
Invoice accuracy for manufacturers using EDI for invoices
Implementation of EDI
for invoices 1 - 50%
95.7%
Improved
accuracy by
+1.5%
Implementation of EDI
for invoices >50%
19
97.2%
© 2010 IBM Corporation
Utilizing EDI for orders or GTIN on cases/cartons/inners level makes companies
profit by lower distribution costs; distribution costs are one of the largest cost
components in the company and therefore play an extremely important role
Sustainability
Distribution costs with the use of EDI for orders
Implementation of EDI
for orders 1-50%
10.6%
Reduction by
– 4.6%
Implementation of EDI
for orders >50%
5.4%
Distribution costs with the use of GTIN on
cases/cartons/inners level
Implementation 1-50% of GTIN
cases/cartons/inners level
12.4%
Reduction
by – 4.7%
Implementation >50% of GTIN
cases/cartons/inners level
20
7.7%
© 2010 IBM Corporation
The More, the Better!
The more companies and GS1 MOs
engage in the Global Scorecard,
the more value companies internally,
trading partners collaboratively, and
the industry collectively
will get out of this powerful system!
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© 2010 IBM Corporation