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© 2011 IBM Corporation
Optimize your supply chain when utilizing standards
Preliminary Findings of Global Compliance Survey 2010
September 2011
© 2011 IBM Corporation2
The complexities of today’s economic environment and everexpanding global supply chains mandate new guidelines for peak performance.
© 2011 IBM Corporation3
IBM has analyzed the strategy of 664 Supply Chain Executives. Be part of the visionaries, unveil visibility with the help of standards and be at the cutting edge of your industry.
*Source: New rules for a new decade, A vision for smarter supply chain management, IBM October 2010: ftp://public.dhe.ibm.com/common/ssi/ecm/en/gbe03369usen/GBE03369USEN.PDF, part of the Smarter Commerce initiative
See what others don’t Unveil visibility with collaborative insight.
© 2011 IBM Corporation4
At the same time The Consumer Goods Forum has identified in their 2020 future value chain agenda that things not only need to be done differently, they also need to be done
collaboratively. By working together – not only as an industry but also with governments, NGOs and consumers –
we can achieve collectivelywhat none of us can achieve alone.
http://www.ciesnet.com/pfiles/programmes/futurevaluechain/2020-Future-Value-Chain-Report.pdf
© 2011 IBM Corporation5
Benchmarkyour company versus your peers regarding those adoptions by using
© 2011 IBM Corporation6
Global Scorecard(owned by The Consumer Goods Forum and administrated by IBM)
A Key Enabler from the for Internal and Trading Partner Collaboration
© 2011 IBM Corporation7
Key capabilities of the Global Scorecard:
Value through the scorecard
Reports “as-is” status on individual companies, country/regional and global level
Assesses key process performance relative to peer companies
Demonstrates gaps in performance levels
Helps to support the business case for improvement projects
Provides a report building tool that can be customized according to your specific requirements
Helps to measure success
Helps to establish priorities. Are you on the “bleeding edge” or are there advanced practitioners among your trading partners to help you get started?
Provides results and effects (business impact and value) of scorecards as demonstrated in the annual report and provides information from geographic regions and business types
Provides an on-line action planning tool that gives visibility of agreed actions and progress
Allows for the ability of multi-national corporations to manage global and regional programs
Data is anonymous and is treated highly confidential
The more scorecards submitted the more relevant results we receive…
© 2011 IBM Corporation8
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
8
© 2011 IBM Corporation9
62 countries worldwide
8,790 companies
9,099 KPI scorecards
Leading edge companies: 23 out of Fortune 500 companies
Total revenue: 2.25 trillion US$
Shared their insights in 2010 on the status of their standards and business
measures
Every year the data of the preceeding year is analysed in the
global scorecard survey
290 The Consumer Goods Forum members
© 2011 IBM Corporation10
Participation for Key Performance indicators is increasing every year (all industries, all business types)...
0
2.000
4.000
6.000
8.000
10.000
2004 2005 2006 2007 2008 2009 2010
Key PerformanceIndicators
© 2011 IBM Corporation11
0,0 USD
0,5 USD
1,0 USD
1,5 USD
2,0 USD
2,5 USD
3,0 USD
2004 2005 2006 2007 2008 2009 2010
KPIs
Revenue in Trillion
Representing an enormous value of the industry (all
industries, all business types)...
© 2011 IBM Corporation12
Global participation for this year’s survey (total sample, all industries)
798 17 8,008 3 267 6 9,099
Total
322,663 15,458 1,431,994 23,675 443,884 18,111 2,255,785
Number KPI Scorecards
Revenue KPI Scorecards (US$ m)
© 2011 IBM Corporation13
16
19
11
15
31
0
10
20
30
40
2006 2007 2008 2009 2010
More countries submitted more than 10 KPI scorecards in the last years
© 2011 IBM Corporation14
Analysis is done for Consumer Products Manufacturer, retailer and wholesaler
© 2011 IBM Corporation15
Intedependencies between KPIs and Business Measures show
supply chain efficiencies
© 2011 IBM Corporation16
Supplier Service Level improvement and boosting the GTIN on consumer unit level rate
Store Service Level improvement and boosting the GTIN on consumer unit level rate
Raw Material Inventory Cover and boosting the SSCC level rate
Retail Distribution Centre Inventory Cover and boosting the the EDI level for orders
GTIN on consumer unit implementation level <75%
GTIN on consumer unit implementation level >75%
93.4%
76.4%
29%more
95.5%
84.9%
19%more
Boosting your implementation level
50%less
SSCC implementation level <75%
SSCC implementation level >75%
35 days
17 days
GTIN on consumer unit implementation level <75%
GTIN on consumer unit implementation level >75%
35%less
EDI for orders implementation level <75%
EDI for orders implementation level >75%
26 days
17 days
© 2011 IBM Corporation17
50 days
Lead Time and boosting the EDI for orders level
Out of stock rate and using a receiving advice via EDI (Manufacturer)
Invoice accuracy and boosting EDI for invoices level (Manufacturer)
Distribution costs and boosting the EDI for orders level (Manufacturer)
EDI for orders implemenation level <75%
EDI for orders implementation level >75%
63 days21%less
Using no receiving adivce via EDI
Using a receiving advice via EDI
3.5%
5.2%
32%less
EDI for invoices implemenation level <75%
EDI for invoices implementation level >75%
98.5%
93.6%
3.5%less
EDI for orders implemenation level <75%
EDI for orders implementation level >75%
5.8%
10%
42%less
© 2011 IBM Corporation18
Supplier
Raw Material
Distribution
Manufacturer
Companies having implemented standards show at the same time
efficiencies along the whole supply chain
32% less Out of stocks
Happy customer
3.5% higher Invoice accuracy
35% less Retail Distribution
Centre Inventory Cover
50% less Raw Material
Inventory Cover30% higher Supplier
Service Level
19% higher Store Service Level
42% lowerDistribution costs
Warehouse
Retailer
21% shorterLead time
Please note: the Global Scorecard is not set up
that we can see cause and effects. We can only say that if companies have implemented certain IM we can at the same time
observe efficiens.
© 2011 IBM Corporation19
Standards to be measured
Measure Explanation
% of consumer units allocated a GTIN% of cases/cartons/inners allocated a GTIN
The GTIN (Global Trade Identification Number) is a globally unique number to identify trade items (in databases), and is therefore the foundation for
Global e-commerce.
% of pallets/unit loads labeled with SSCC The SSCC (Serial Shipping Container Code) is used throughout the SC as entity identifier for item tracing.
% of shipping or receiving locations that have been allocated a GLN The GLN (Global Location Number) is used to identify physical locations.
% of orders transacted by EDI Transmission of orders between organizations by electronic means.
% of invoices transacted by EDITransmission of invoices between organizations by electronic means.
% of shipments for which a despatch advice was transmitted by EDI Shipments that are accompanied by an electronic despatch advice message transmitted by electronic means.
% of shipments for which a receiving advice was transacted by EDI Shipments that are accompanied by an electronic receiving advice message transmitted by electronic means.
% of sales with synchronized master data between trading partners by the GS1 GDSN
The GDSN (Global Data Synchronization Network) is an internet-based, interconnected network of interoperable data pools that enables companies around the globe to exchange accurate, compliant,
standardized and synchronized supply chain data with their trading partners using a standardized Global Product Classification.
% of sales with master data loaded into a GS1-certified data pool (%) Sales with the use of synchronized master data.
% of active SKUs where the master data has been synchronized using the GS1 Global Data Synchronization Network
SKU (stock keeping units) where the master data has been synchronized by GDSN
% of GTINs that are catalogued consistently with a GS1 Global Product Classification brick code Enabler for GDSN
© 2011 IBM Corporation20 Note: Data averages are not weighted. The sample contains 90% manufacturer and 10% retailer and wholesaler.
4,8
12,5
9,3
32,0
47,7
48,6
45,1
48,0
85,0
97,1
12,2
25,3
26,0
46,3
47,7
55,9
60,7
80,4
93,0
98,6
0% 20% 40% 60% 80% 100%
% of consumer units allocated a Global Trade Item Number (GTIN)
% of cases/cartons/inners allocated aGlobal Trade Item Number (GTIN)
% of GTINs that are catalogued onsistently with a GS1 Global Product Classification brick code
% of orders transacted via EDI
% of shipping or receiving locations that have been allocated a Global Location Number (GLN)
% of pallets/unit loads labeled with Serial Shipping Container Code (SSCC)
% of invoices transacted via EDI
% of sales with synchronized master data between trading partners (GDSN)
% of shipments for which a despatch advice was transmitted via EDI
% of shipments for which a receiving advice wastransacted via EDI
Increase
Increase
2006 Survey
2010 Survey
Implementation levels of KPIs improved a lot between 2006-2010
by the panel sample
(companies which participated in both surveys)
© 2011 IBM Corporation21
CP Retailers and wholesalers tend to implement the standards on a higher average implementation level than manufacturers (worldwide). Interacting with many more parties makes an efficient supply chain even more important…
52%
41%
30%
22% 22%
70%
90%
67%
78%81% 80%
59%62%
15%
90%
57%
73%
55%
97%
0%
20%
40%
60%
80%
100%
GTINConsumer Unit
GTIN Case SSCC P allet GLN EDI Orders EDI Invoices EDI DespatchAdvice
EDI ReceivingAdvice
Sales withsynch. Data
P roductclassification
Manufacturers
Retailers and Wholesalers
© 2011 IBM Corporation22
TCGF manufacturers are ahead of the non-TCGF-members in implementing measures…
50%
18%
80%
25%
38%
54%
59%
64%
92%
96%
27%
3%
7%
14%
13%
18%
23%
16%
38%
71%
0% 20% 40% 60% 80% 100%
Product classification
Sales with synch. Data
EDI Receiving Advice
EDI Despatch Notes
EDI Invoices
EDI Orders
GLN
SSCC Pallet
GTIN Case
GTIN Consumer Unit
Non-TCGF members
TCGF members
© 2011 IBM Corporation23
18%
68%
68%
86%
91%
81%
76%
95%
99%
2%
13%
49%
63%
64%
73%
48%
79%
93%
0% 20% 40% 60% 80% 100%
Sales with synch. Data
EDI Receiving Advice
EDI Despatch Notes
EDI Invoices
EDI Orders
GLN
SSCC Pallet
GTIN Case
GTIN Consumer Unit
Non-TCGF members
TCGF members
… as well as the TCGF retailers and wholesalers are ahead of the non-TCGF-members
© 2011 IBM Corporation24
Average implementation level and number of measures implemented
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
0 1 2 3 4 5 6 7 8 9Number of measures implemented
Ave
rag
e im
ple
men
tati
on
leve
l of
all
IM im
ple
men
ted
An efficient supply chain is essential for the FMCG industry – this industry is leading the group of implementing measures; very high results have also the print and digital industry, as Journals need also a on time delivery
Books, Journals, Music, Video
Heath and Beauty
Electrical Goods
Fresh / Frozen Food
Home Improvement
Textile
Dry Grocery, food
Dry Grocery, non food
© 2011 IBM Corporation25
Industry leaders
1 5 6 10Number of standards implemented
1%50
%51
%10
0%
Ave
rage
impl
emen
tatio
n le
vel o
f st
anda
rds
impl
emen
ted
2009: 16%2009: 52%
2009: 28% 2009: 4%26%
59% 12%
3%
In general, companies tend to implement the standards they use at a high level, even higher than we observed in the 2009 survey
Comapnies having more than 6 Implementation Measures at an
average level of above 51% implemented
© 2011 IBM Corporation26
Most of the companies responded have only one or two implementation measures in place
20801925
1087
701610
506
327
133 86 42 46 90
400
800
1200
1600
2000
2400
1 2 3 4 5 6 7 8 9 10 11 12
Number of IM implemented
Nu
mb
er o
f co
mp
anie
s
© 2011 IBM Corporation2727
There is still potential for many standards, especially Data Synchronization
35%27%
21%
5% 4%
13%
5%
38%
66% 57%
60%
66%
48%
21%
34% 15%
91%
21%
48%
24%
0%
20%
40%
60%
80%
100%
GTINConsumer Unit
GTIN Case SSCC P allet GLN EDI Orders EDI Invoices EDI DespatchNotes
EDI ReceivingAdvice
Sales withsynch. Data
P roductclassification
Values = 0
Values > 0
96% of all companies have indicated an implementation level
7,904 KPI scorecards
91% indicated an implementation level above 0
5% have responded by indicating a 0-implementation level
© 2011 IBM Corporation28
Finnish Results
Manufacturer Finland
Manufacturer Worldwide
Retailer & Wholesaler
Finland
Retailer & Wholesaler Worldwide
2010 2010 2010 2010
IM01 % of consumer units allocated a GTIN 89.9 89.9 92.5 96.9
IM02 % of cases/cartons/inners allocated a GTIN 86.1 73.4 82.2 90.3
IM04 % of pallets/unit loads labeled with SSCC 39.0 57.1 15.4 66.6
IM05 % of shipping or receiving locations that have been allocated a GLN 25.3 55.3 27.4 78.4
IM06 % of orders transacted via EDI 30.4 51.5 57.2 81.3
IM07 % of invoices transacted via EDI 32.8 40.5 43.3 79.9
IM08 % of shipments for which a despatch advice was transmitted via EDI 24.6 30.1 21.1 59.4
IM09 % of shipments for which a receiving advice was transacted via EDI ** 22.3 ** 62.4
IM10 % of sales with synchronized master data between trading partners via the GS1 Global Data Synchronization Network ** 22.2 ** 15.1
Number of KPI scorecards
Revenue in m US$
All industries 216 4,619
CP manufacturer, retailer & wholesaler
178 3,230
© 2011 IBM Corporation29
3 year Results for Business Measures Worldwide (Revenue-weighted Averages)
Manufacturers Retailers & Wholesalers
2008 2009 2010 2008 2009 2010
BM01 Annual Growth Rate (%) 5.9 3.1 3.6 4.3 6,6 1.6
BM02 Supplier Service Level/Unit Fill Rate to Customer Distribution Center (%) 96.7 97.8 96.8 89.9 90.9 91.7
BM03 Store Service Level/Unit Fill Rate to Customer Distribution Centre (%) 96.3 93.6 95.3 92.8 90.6 95.3
BM04 On-Time Delivery (%) 92.1 91.7 94.2 86.0 89.1 87.2
BM06 Raw Materials Inventory Cover (days) 19.8 15.4 21.8
BM07 Manufacturer/Supplier’s Finished Goods Inventory Cover (days) 35.7 31.4 33.9
BM08 Retail Distribution Centre Inventory Cover (days) 20.7 13.1 18.8
BM09 Retail Store inventory Cover (days) 30.1 37.6 17.9
BM10 On-Shelf/Point-of-Sales Out-of-Stocks (%) 4.7 3.9 4.3 4.8 3.5 3.0
BM11 Order to Delivery Cycle Time (hours) 68.0 62.8 66.5 46.3 50.5 44.8
BM12 Distribution Costs (% of sales value) 7.0 7.9 7.5 4.9 2.9 3.2
BM13 Invoice Accuracy (%) 93.8 96.4 95.9 84.7 82.0 83.2
BM14 Retail Shrinkage Rate (%) 1.6 1.5 2.6
** insufficient data available to produce a benchmark, n<5
© 2011 IBM Corporation30
3 year Results for Implementation Measures Worldwide (Revenue-weighted Averages)
Manufacturers Retailers & Wholesalers
2008 2009 2010 2008 2009 2010
IM01 % of consumer units allocated a GTIN 96.8 92.0 89.9 97.3 96.6 96.9
IM02 % of cases/cartons/inners allocated a GTIN 87.6 86.6 73.4 82.6 87.0 90.3
IM04 % of pallets/unit loads labeled with SSCC 49.4 67.2 57.1 49.4 71.6 66.6
IM05 % of shipping or receiving locations that have been allocated a GLN 41.2 51.1 55.3 74.5 87.5 78.4
IM06 % of orders transacted via EDI 51.7 47.0 51.5 70.4 75.8 81.3
IM07 % of invoices transacted via EDI 47.7 45.6 40.5 67.1 78.6 79.9
IM08 % of shipments for which a despatch advice was transmitted via EDI 27.6 35.5 30.1 22.4 58.7 59.4
IM09 % of shipments for which a receiving advice was transacted via EDI 12.0 16.0 22.3 13.9 58.4 62.4
IM10 % of sales with synchronized master data between trading partners via the GS1 Global Data Synchronization Network 19.0 24.4 22.2 17.0 42.4 15.1
IM11 % of sales with master data loaded into a GS1-certified data pool (%) 41.6 ** 73.6
IM12 % of active SKUs where the master data has been synchronized using the GS1 Global Data Synchronization Network 7.0 26.5 15.4
IM13 % of GTINs that are catalogued consistently with a GS1 Global Product Classification brick code 47.2 71.0 69.7
** insufficient data available to produce a benchmark, n<5
Note: lower values are due to many new smaller manufacturers participating in this year’s survey
© 2011 IBM Corporation31
Regional Breakdown – Consumer Products Manufacturers – Business Measures for 2010 (Revenue-weighted Averages)
North America South America Europe Asia Asia-Pac
Weighted average Weighted average Weighted average Weighted average Weighted average
BM01 Annual Growth Rate (%) 2.6 11.5 3.6 5.4 4.9
BM02 Supplier Service Level / Unit Fill Rate to Customer Distribution Centre (%)
97.2 92.4 97.4 98.1 97.7
BM03 Store Service Level / Unit Fill Rate (%) 93.7 ** 96.2 98.4 98.1
BM04 On-Time Delivery (%) 93.4 90.0 96.4 99.1 99.0
BM06 Raw Materials Inventory Cover (days) 18.7 21.5 19.8 26.2 26.2
BM07 Manufacturer/Supplier's Finished Goods Inventory Cover (days)
35.8 34.1 31.0 33.0 36.7
BM10 On-Shelf/Point-of-Sale Out-of-Stocks (%) 4.8 10.3 5.5 1.2 1.5
BM11 Order to Delivery Cycle Time (hours) 76.2 77.7 56.6 23.7 33.8
BM12 Distribution Costs (% of sales value) 8.7 6.6 5.8 4.4 4.3
BM13 Invoice Accuracy (%) 94.7 96.2 95.1 99.5 98.7
Note: Sample for Australasia is too small for a Business Measure analysis.** insufficient data available to produce a benchmark, n<5
© 2011 IBM Corporation32
Regional Breakdown – Consumer Products Manufacturers – Implementation Measures for 2010 (Revenue-weighted Averages)
North America South America Europe Asia Asia- Pac
Weighted average Weighted average Weighted average Weighted average Weighted average
IM01 % of consumer units allocated a GTIN 99.1 100.0 87.0 99.7 99.7
IM02 % of cases/cartons/inners allocated a GTIN 93.7 98.5 66.1 96.9 97.5
IM04 % of pallets/unit loads labeled with SSCC 89.7 45.1 53.0 12.5 26.9
IM05 % of shipping or receiving locations that have been allocated a GLN 63.7 71.6 56.5 17.4 30.5
IM06 % of orders transacted via EDI 71.6 67.7 51.1 24.5 28.2
IM07 % of invoices transacted via EDI 71.5 53.7 36.2 9.6 13.6
IM08 % of shipments for which a despatch advice was transmitted via EDI 45.0 0.6 32.0 4.8 4.7
IM09 % of shipments for which a receiving advice was transacted via EDI 21.0 0.1 32.2 1.6 1.6
IM10 % of sales with synchronized master data between trading partners via the GDSN 38.0 4.7 16.2 0.6 6.8
IM13 % of GTINs that are catalogued consistently with a GS1 Global Product Classification brick code 95.3 37.2 56.3 12.7 12.7
© 2011 IBM Corporation33
For additional insights about the global scorecard, please visit www.globalscorecard.net: There are several documents available:
• The executive report (White paper)
• Report with tables
For further information please contact Rüdiger Hagedorn, CGF ([email protected]) or David McCarty, IBM ([email protected]).
© 2011 IBM Corporation34
Trademarks and notes
©IBM Corporation 2011
IBM, the IBM logo, and ibm.com are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with the appropriate symbol (® or ™), these symbols indicate US registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml.
Other company, product and service names may be trademarks or service marks of others.
References in this publication to IBM products or services do not imply that IBM intends to make them available in all countries in which IBM operates.