ECR Europe Board Meeting 18 March 2005

1. ECR Europe Board Meeting18 March 2005 2004 / 2005 Global Scorecard Review Focus on Implementation Measures, Benchmark Results and Objectives Jim Flannery Managing Director- Customer Development Procter & Gamble Global Operations

2. The Global Scorecard

3. The Global ScorecardA World Wide Industry Approach to Track and Measure the Implementation of Standards and the Resultant Business Improvement • Hard Business Outputs • (KPIs like inventory Levels, out-of-stocks, order to delivery cycle time, service levels) • Implementation of Global Standards • (Foundational elements like barcodes, Electronic communication) • Implementation of Collaborative Best Practices • (like Category Management, Data Synchronization or CPFR)

4. The Global ScorecardA World Wide Industry Approach to Track and Measure the Implementation of Standards and the Resultant Business Improvement • Hard Business Outputs • (KPIs like inventory Levels, out-of-stocks, order to delivery cycle time, service levels) • Implementation of Global Standards • (Foundational elements like barcodes, Electronic communication) • Implementation of Collaborative Best Practices • (like Category Management, Data Synchronization or CPFR) For those who have not seen the 2004 changes to the Footprint, you will note the elevation of ECR Europe’s Collaborative Shopper Value Creation work as a Foundational Strategy for Demand Creation Activity

5. July – Sept. Complete Scorecards Spring Board Meeting Review Improvement Plans & Launch next year cycle Fall Board Meeting Review Results and Progress Winter / Spring Case Studies & Improvement Plans The Global ScorecardA World Wide Industry Approach to Track and Measure the Implementation of Standards and the Resultant Business Improvement The Process: Once a year, since 2002, complete the GCI Compliance Scorecard

6. Click Here

7. The GCI Compliance Scorecard looks like this….. Qualitative Assessment of Capabilities (not going to spend much time here) Quantitative Assessment of Resultant Key Performance Indicators 88 96 95 22 32

8. 97 94 Quantitative Assessment of the Implementation GS-1 Standards and Business Processes 7 89 92 5 50 75 70 8 40

9. July – Sept. Complete Scorecards Spring Board Meeting Review Improvement Plans & Launch next year cycle Fall Board Meeting Review Results and Progress Winter / Spring Case Studies & Improvement Plans Global Commerce Initiative Compliance Scorecard 2004 Benchmark Results

10. So How Did We Do? PARTICIPATION • Growth of Participation • Was driven by Companies Broadening their geographic representation • To be a better measurement tool, we need to reach out to more companies.

11. There are 11 Implementation Measures • The first 4 are focused on the use of GTINS, or barcodes at various stages in the supply chain.

12. What is a GTIN ? • The Global Trade Item Number is a globally unique number to identify trade items, and is therefore the foundation for Global e-commerce. • “Umbrella" term used to describe the entire family of EAN/UCC codes, including EAN/UCC-8, UCC-12 (UPC), EAN/UCC-13, and EAN/UCC/DUN-14.

13. Product & Shipment Identification – GTIN at Consumer Unit Level Full Implementation Roll-out Started Pilots Started Plans Agreed Nothing Planned Discussion – Why Not 100%? • Because there are items transacted that do not have barcodes today (flowers, bulk, fresh) • These items require RSS technology

14. Product & Shipment Identification – GTIN at Trade (Case, Carton) Unit Level Full Implementation Roll-out Started Pilots Started Plans Agreed Nothing Planned Use of EAN/UCC system (14 digit Global Trade Identification Number (GTIN) at the Trade Unit level (case, carton) and application of automatic data capture (ADC) for bar-coding scanning and/ or radio frequency applications (RFID). Discussion • The largest GAP is the lack of GTINs application at the “Inner pack” level. • It appears that the 89 responding manufacturers do a better job than is “averagely” seen by the retailer segment.

15. Full Implementation Roll-out Started Pilots Started Plans Agreed Nothing Planned Use of Serial Shipping Container Code, at the pallet / container level using the EAN*UCC Company prefix as it’s base for unique identification on a global basis. Product & Shipment Identification – Serial Shipping Container Code (SSCC) Discussion. • It appears that the 55 responding manufacturers do a better job than is “averagely” seen by the retailer segment. • This is a capability underutilized in Europe.

16. What % of items sold / received have exceptions to the Global Trade Identification Number (GTIN) allocation guidelines?. Product & Shipment Identification (GTIN) Violations Discussion. • It appears that far fewer companies are tracking / measuring data quality. (30% less records than most other measures) • Those that are measuring know they have errors that need to be fixed. • Since “you manage what you measure” and since “data quality” is the root of synchronization benefit – this should be a high priority.

17. Full Implementation Roll-out Started Pilots Started Plans Agreed Nothing Planned Use of EAN/UCC Global Location Identification Number (GLN) to identify either physical or logical locations where Supply Chain events, transactions or hand-offs occur. Location Identification – Global Location Identification Number (GLN) Discussion. • It appears that Retailer use of the standard is outpacing manufacturers. • A barrier has been the lack of GLN Allocation rules (like GTIN allocation rules). These allocation guidelines are set to be published in June 2005.

18. Electronic Product Code (EPC) Full Implementation Roll-out Started Pilots Started Plans Agreed Nothing Planned Use of the Electronic Product Code as a unique identification using RFID tags the appropriate level (pallet, container, traded unit or consumer unit) for the industry segment. No Implementation to Measure yet

19. Product Classification Standards Full Implementation Roll-out Started Pilots Started Plans Agreed Nothing Planned Use of the EAN.UCC GPC (Global Product Classification) standards to classify and categorise products in the areas of forecasting, planning, searching, procurement, category management and global data synchronization in the communication both internally within the organizations and between trading partners.. Discussion. • Product Classification Standards new in Mid-2004 • Fast Moving Consumer Goods including Food, Beverage, Tobacco completed first. Manufacturers just starting to implement. • Gen. Merchandise, DIY, Hardlines, Apparel to follow • Retailers need multiple categories available to use the capability • This critical mass of categories should be available now.

20. Full Implementation Roll-out Started Pilots Started Plans Agreed Nothing Planned The establishment, loading, registering and synchronizing of item and party data based on EAN.UCC standards (GDS Network) Global Data Synchronization Discussion. • Results are probably overstated relative to new “certified” measure versus simply “standards compliant” • GDSN Roadmap / GlobalRegistry now in place. Results should grow. • Sinfos, WWRE, Transora, GXS, GS-1UK Data Pool, UCCNet (and 4 other) Data Pools now “Certified” • The “work” is to get non-certified data pools “certified” or move to a certified data pool. • Only 11 (versus average 28) retailers responded to this measure.

21. Full Implementation % of Orders % of Invoices Roll-out Started Pilots Started Plans Agreed Nothing Planned Use of standard electronic messages to support the product replenishment process between trading partners. These include orders, advanced shipment notices (or despatch advice), receiving advice and invoices. Messages should be transmitted using EDI via EANCOM, web-EDI or XML standard formats. Use of Electronic Message Capability Discussion. • Electronic Messaging for orders and invoices remains an underutilized capability in Europe. • In this case, it appears that the participating retailers make more use of the capability than retailers “averagely” seen by suppliers.

22. % can scan 13 Digit GTIN % can read RSS What % of Checkouts can scan a 13 Digit Barcode? What % of Checkouts can scan Reduced Space Symbology (RSS)? Retailer Checkout Capability Discussion. • RSS Standards are new – Sunrise 2008 Date Establishes

23. We now have Benchmark Data to Establish GLOBAL Goals, Timelines and Measure Real Progress

24. What Goals, Timelines and Measures Will You Set for European Manufacturers Objectives?

25. A Quick Look at Key Performance Indicators

28. Key Performance Indicators and Implementation Measures

29. QUESTIONS ?

30. Proposed Targets for e-commerce standards (manufacturer perspective)