MIT RFID Academic Convocation · • 100% of Mach3 Power stores compliant within 14 days (vs. over...
Transcript of MIT RFID Academic Convocation · • 100% of Mach3 Power stores compliant within 14 days (vs. over...
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MIT RFID Academic ConvocationJanuary 24, 2006 Dick Cantwell
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P&G and Gillette Co-Founded the Auto-ID Center in 1999
The Auto-ID Center, founded at the Massachusetts Institute of Technology, led the development of a unique product-identifying application using Radio Frequency Identification (RFID)…The Electronic Product Code (EPC)
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In 2005, P&G and Gillette Merged to Create One Company
• Shared learning from the two businesses have enabled the new Company to develop a unified approach to EPC deployment
• Our commitment to and vision for the EPC remains unchanged
The two company’s EPC Teams have now combined
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Transforming The Supply Network
The Electronic Product Code (EPC) enables processes that will allow goods to move efficiently and transparently through the supply network resulting in:
• Better customer service
• Less loss
• Fewer inaccuracies
• Greater product availability for
consumers
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The Pilots…to “Test & Learn”
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Gillette and P&G Have Been Actively Engaged in Pilots
• Test and prove the technology
• Develop a scaleable solution
• Validate the business case
• Drive deployment to deliver business benefits NOW
In-house and retail pilots are critical to establishing the business case
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Collaboration Gains Comprise Over 90% of Total Benefits for Retailers and Suppliers
Collaboration ZoneSupplier Zone Retailer Zone
Distribution Center Distribution Center
Pack Center Manufacturing Plant Retail Store
Increased On-Shelf Availability
Deductions Management
Reduced Inventory
Improved Working Capital
Manufacturer Internal Benefits
Retailer Internal Benefits
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Gillette Also Conducted Pilots to Demonstrate Promotional and New Item Benefits
• Pilots began in January 2005, with a strategic retail partner
• Pilots were designed to prove benefits of promotional and new item introduction compliance
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Venus Disposables Promotion Pilot
Late execution resulted in 19% less sell through
The EPC reads allowed alerts to be issued to store associates so displays could be ‘fast tracked’ to sales floor
• Idle inventory eliminated
• In-stock at all times
• Incremental sales recorded
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Displays on time Displays not on time
EPC-enabled displays were shipped to stores supported by in-store advertising
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Braun CruZer PilotEPC-enabled CruZer displays were shipped to stores for Father’s Day promotion
The EPC data showed that stores that had CruZer on display for the full promotional period generated 61% greater sales
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DaysDisplays on sales floor
Day 3: Ideal Execution to sales floor Day 21: Father’s Day
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Oral-B Pulsar Launch
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Days
Target Actual
Off-shelf displays were critical to generating shopper interest and sales
EPC reads enabled accurate tracking of when displays moved to sales floor
• 9 stores: 0-5 days
• 7 stores: 11-15 days
• 3 stores: 16-20+ days
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Oral-B Pulsar Launch
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Units Dollars
The opportunity to increase daily sales is significant
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lue
Before Display After Display
Daily Sales(19 stores)
Lost Sales(19 stores)
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2005 Holiday Display PilotEPC-enabled Duracell, Braun, TAG and Mach3 Power promotional displays
500 stores tracked displays for compliance
• 100% of Mach3 Power stores compliant within 14 days (vs. over 20 days dwell time)
• EPC-enabled TAG generated 91% POS sell-through versus 71% chain-wide average
• EPC-enabled Braun pallets achieved 30% higher compliance to sales floor than rest of chain
0102030405060708090
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Mach3 Power TAG Braun
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The EPC Advantaged Strategy
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The EPC Advantaged StrategyAn evolving execution plan based on our experience, knowledge and value focus
•Our pilots, shared learning and value focus confirm for us that EPC can help retailers and manufacturers work together to better meet shoppers’ needs
•Our Advantaged Strategy is designed to deliver business benefits to both P&G and our retail partners now
• It reflects both our needs and the needs of our customers
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EPC Advantaged StrategyTiering of products (and scenarios) based on a value proposition and product characteristics
“Advantaged”Higher value products with stronger business cases for EPC. Includes, display modules supporting time sensitive merchandise.
“Testable”Products chosen to support continued testing that can enable theproving of additional value propositions through work process change
“Challenged”No clear value yet, based on specific product or handling obstacles
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EPC Advantaged StrategyTiering allows for specific approaches focused on value creation to enable increasing (tagged) volume
Advantaged
Delivers benefits NOW: higher sales, productivity, reduced out of stocks based on key retail process changes already identified
Promotional display modulesCrest White StripsBlades and Razors
Testable
Drives new learning and tests with some scale. Identifies the next round of Advantaged products and scenarios
SwifferBraun appliances
Challenged
Drives continued research at the manufacturer
Manual toothbrushesPringlesCascadeAnti-perspirants/deodorants
Approach Product Examples
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Guiding Principles for Our Future Work• Continue to play a lead role in
understanding how EPC technology creates value for stakeholders
• Collaborate with trading partners to identify, quantify and secure EPC enabled benefits through process optimization
• Continue to review internal processes. Our current efficiencies make internal benefits at the pallet and case level ‘incremental’ rather than breakthrough.
• Drive reductions in tag costs & other EPC infrastructure
• Support the advance of EPC performance, development and standards through EPCglobal
• Improve read rates and overcome barriers to scaleable implementation
• Use the “EPC Advantaged”Strategy to secure ongoing benefits
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How You Can Help Us Now• The 1-cent (or less) tag
• Increased tag quality, robustness & longevity
• A solution to incorporating the tag into corrugate materials
• Tag deactivation solutions
• System solutions built into EPC appliances
• Spontaneous real-time information exchanges & distributed EPC information management (eg; discovery)
• A robust study on EPC enabled retail availability improvements
• Consumer education & informed public comment on the use of the EPC