Ecr russia pb

DI Paul Bruck, MBA – Moscow June 2nd, 2010

Bruck Consult1. Supply Chain in Russia in 10 years – retail structure2. RFID – an outlook


Paul Bruck, Dipl. Ing., MBABorn 1960

Education & Experience

• Primary School – Leopoldsdorf/Marchfeld• Theresianische Akademie – “Matura” 1978• University for Natural Resources - graduation (Agricultural Economics) – 1986• Master of Business Administration – 1994

• Various Management Positions in Austria and Russia• Specialised on CEE & CIS• Specialised on Identification Technology for Logistic Solutions• Many years experience in Barcode & RFID solutions• Start of Russian barcode business


Paul Bruck, Dipl. Ing., MBAToday

• Bruck Consult • Business Consultant for Russia• Concepts Consulting for Automatic Identification

• Most Service and Most Management partnership with Specht Rechtsanwalt GmbH• Accounting Outsourcing in Moscow• Management

• University of Natural Resources, Department of Food Science• Master Study: “Safety in the Food Chain” – Lecture: “Automatic Identification for Safety in the Food

Chain”

• ABA • Austrian Business Agency Representative in Moscow

• Austrian Economic Forum in Russian• CEO


My overall statements:

„No idea how the Russian Supply Chain will develop over the next 10 years.“

„There is no example of country similar to Russia to learn from or to copy existing systems.“


2002 2003 2004 2005 2006 2007

Total retail trade turnover, US$ Billion 120 148 196 249 317 404 (Е)

Retail Turnover, % y-o-y, real growth 9,3 8,8 12,5 12,8 13,9 15,2 (A)

GDP, %, y-o-y, real growth 4,7 7,3 7,2 6,4 6,7 7,5 (A)

The economic circumstances


Assortment of products

Typical gross margins Locations Examples

Hypermarkets 15,000-40,000 SKU 15-24% Along main roads, Outside city limits

Auchan, Ramstore, Metro, Mosmart, Karousel, Lenta, Magnit, Perekrestok, Seventh Continent

Supermarkets Up to 20,000 SKU 25-32% City centres, along main roads, in residential areas

Magnit, Billa, Perekrestok, Seventh Continent, Grossmart

Discounters Up to 4,500 SKU 18-26% Residential areas Pyaterochka, Dixy, Kopeyka, Magnit

According to estimates, the share of modern self-service formats in Russia was about 25% in 2006. It is expected that by 2010, this will reach around 50%, with most of the additional market share being taken from open markets.


Various level of approaches:

1. Global – Geography

2. Russian Regions

3. Supply Chain Structure

4. Warehouse Automation

5. Shop Automation

6. Check Out



1. Global – Geography – main influencial factors

Due to the development of China, Russia and Europe the 3 regions will grow together into one huge region.

Infrastructure projects support that development – such as the construction of Russian standard railways to Berlin and Vienna, which will allow rail transportation from Beijing to Europe.

Environmental regulations will more and more influence the supply chain.



2. Russian Regions

Whereas in the last 20 years Moscow was the main driving force for growth, the regions around the large cities will speed up in developing – a major challenge for Supply Chain Management



3. Supply Chain Structure

Where as 15 years ago „centralisation“ of warehousing and warehouse management was the key factor, multi level optimisation and specific warehousing is today the key factor:

„From central to local!“

Transportation will become more and more diversified!

Automation and communication throughout the supply chain will be the main key for success and efficiency!

Eg: BILLA Austria (member of Rewe Group)


Central warehouse for dry products- Located in Wiener Neudorf outside Vienna- 300.000 boxes sorted in 2 shifts per day- Only „slow moving products

- Rewe Group are following brands: Billa, Merkur, Bipa, Penny, Adeg

Other warehouses: - central warehouse for fresh products - central warehouse for drinks - central production of wine - local regional warehouse for fast moving products and fresh products - direct delivery of frozen products


The Rewe central warehouse is functioning by the use of GS128 to permit:

1. Track & Trace according to EU regulation 1282. First in first out by optimising „best before“ date3. Fully automatic palette store4. Pick by lite system, which will be changed

shortly to pich by voice5. Tray sorter6. Manual loading of trollies


Central warehouse for dry products


Tray sorter, scanning and exit



4. Warehouse Automation

Fully automatic warehouseHalf automatic warehouseManualCombined

Barcode, RFID, Pick by lite, pick by voice, Mobile Data Collection, Wireless LAN, ………….

„Not automation is the key word but optimisation!“


Various level of approaches:5. Shop Automation



6. Check Out


The Role of RFID and EPC

Where 5 to 6 years ago RFID was thought to be the „replacer“ of barcode this idea is in many ways obsolete!

Barcode will be the main Identification tool in food and in retail.

RFID will be an add-on technology used especially for asset management such as for palettes, trollies and dollies.


The Role of RFID and EPC

Why?

- RFID tags are still too expensive- RFID is sensitive to metal, oil and liquids and to other radio signals- RFID is usefull in closed cycles and for special industries- RFID can be very well combined with barcode applications


BRUCK CONSULT – Company structure• Bruck Consult offers especially for Russia strategy

consultancy starting from market analysis up to company foundation and complete market entry services.

• Most Service is a partnership of Bruck Consult and Specht Rechtsanwalt GmbH. This company in Moscow offers Outsourcing Services for accounting, tax consultancy and payroll.

• Most Management is a company established to take over management positions.

• Austrian Business Agency - ABA-Invest in Austria, a government-operated consulting firm, is the international investor’s first business address in Austria. Bruck Consult is the ABA consultant in Russia and your first contact to find out more about investment possibilities in Austria. - more

www.bruckconsult.com www.specht-partner.com

www.aba.gv.atwww.austrianeconomicforum.ru

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http://www.aba.gv.at/

http://www.austrianeconomicforum.ru/


Biography

DI Paul Bruck, MBA has worked more than 20 years in Central & Eastern Europe. As marketing specialist he has built up several brands and sales organisations successfully. Paul Bruck has a degree from the University of Vienna specialised in agricultural economics and a MBA from the City University Seattle. He is fluent in German, English and Russian. During his professional activities he held several positions within Dow Chemical. After a trainee programme he spent some years in Russia as project manager before he was promoted to product manager.Joining Datalogic in 1990 he built up the Joint Venture in Russia with offices throughout Russia as well as in the Ukraine and Belarus. Paul Bruck introduced a completely new technology, almost unknown in the former USSR, he was cofounder of GS1 and Uniscan Russia and has initiated the great success of the Auto-ID technology in Russia.From Creditanstalt and Prochaska & Cie. he was employed to manage the start-up period for a Joint Venture with a Russian Ministry trade organisation, before returning to Datalogic as managing director of the Austrian subsidiary. With Datalogic Paul Bruck extended the business in Poland, Czech Republic, Hungary and Russia.He bought these Datalogic companies in a MBO end of 1995. After that the company developed rapidly with new subsidiaries in Germany, Slovenia and Romania.Since 2006 Paul Bruck is an independent consultant offering his Know-How in CEE and Russia.


Biography

Since 2007 Paul Bruck cooperates with the international law firm Specht Rechtsanwalt GmbH and with auditing firms to offer complete consulting services for western firms for business start-up in Russia. Also in 2007 he and Dr. Specht founded the accounting and payroll firm Most Service in Moscow. At the beginning of 2009 the partnership was extended by the foundation of Most Management, a company established to take over management positions.Paul Bruck holds lectures at the University of Natural Resources and Applied Life Sciences, Vienna DLWT - Department of Food Science and Technology - on Identification Technology for Safety in the Food Chain.Paul Bruck is also the consultant for the Austrian Business Agency - ABA Invest in Austria, the consulting agency of the Republic of Austria, and is therefore the first contact for potential Russian investors for their investment plans in Austria.In autumn 2008 Paul Bruck and some business friends formed an Austrian business platform - the Austrian Economic Forum, in order to connect Austrians and friends of Austria doing business in Russia. Regular monthly meetings are arranged to network and exchange experiences, see also Austrian Economic Forum.

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