P&G China and Metro C&C Supply Chain performance improvement project (by ECR Asia Pacific)
-
Upload
ecr-community -
Category
Documents
-
view
1.820 -
download
3
description
Transcript of P&G China and Metro C&C Supply Chain performance improvement project (by ECR Asia Pacific)
Member of METRO Group
P&G-Metro SC Performance Improvement Project
1
��������������� ������������������������������������������������
METRO in China
������ !���"##���$%"�&!�'�(�����)�!��*
����
����
����
����
����
����
����
����
��������
�������� ���� ���������������� ���������������� ���������������� ����������������
2
The Cash & Carry business concept for professional customers groups
e.g.
- Hotels
- Restaurants
- Caterer
- Cafes/bars
HORECAe.g.
- Small Retailers
- Generalists
- Specialists
�Drug Stores
�Petrol Station Shops
�Kiosks
- Special food
sales formats
e.g.
- Administrations
/Institutions
- Industry
- Service companies
- Freelancer
- Authorities
CBUTRADERHORECA TRADER CBU
� The service level of logistic relating to CFR, OOS, etc. are critical in C&C, because the professional shoppers are doing business with C&C.
3
• Metro Procurement Logistics (PAXD) network
built up with 3 cross docking centers in Shanghai,
Guangzhou, and Beijing, generating 8.1% indirect
flow share in Dec 2007.
• P&G have Regional Distribute Centers in
Shanghai (East), Guangzhou (South), Beijing
(North), Tianjin (North), Chengdu (Center & West)
to cover Metro orders.
Current SC Network
SC Network (DF&NF) Y2007
4
P&G-Metro SC Performance Improvement Project--Objective
Overall improved supplier performance and more
(Metro and Supplier ‘win-win’)
5
P&G-Metro SC Performance Improvement Project-- Deliverables
Increased Fill Rate
Decreased Late Delivery
ImprovedGoods availability
Increased Sales & GP
CustomerSatisfaction
P&G SC Performance Improvement
6
P&G-Metro SC Performance Improvement Project
� Background
• Metro and P&G supply chain jointly agreed that Fill Rate is a priority KPI opportunity in China given Metro’s rapid growth in the market.
• Before the project kick off(Jan07-Jun07), Metro Fill Rate has been 60.3% nationally, that means about 40% of Metro order can not besupported by P&G, without having an aligned root cause.
7
METRO Supply Chain Supplier Scorecard
Principle: MCC Buyer integrates SC Supplier Score Card in normal operational business process, monitors & improves it together with P&G. Tracking Sheet is submitted to Metro SCM for monitoring.
Monthly MonthlyMonthly MonthlyMonthly
Metro SCM Metro SCM
Involve Buyer & P&G
Buyer & P&G
Involve SCM if needed
Buyer
Involve SCM
WH
EN
WH
OP
RO
CE
SS
KPI needImpro-vement
KPI / Scorecard Creation
KPI / Scorecard Distribution to Buyer / P&G and Analysis
Contactwith P&G, discuss reasons, define action plan, targets.
Follow-up KPI Development
Buyer & P&G
Involve SCM if needed
Alig
nmen
t
P&G-Metro SC Performance Improvement Project
� Project Proposal – General Working Process
* Implement penalty process
8
KPIs Formula Remark
Fill Rate % (Ord Qty - Short Qty) / Ord Qty
KPI measures the share of articlesdelivered correctly concerning quantities.Only short deliveries have a negativeinfluence (no over deliveries).
Lead-time Reliability(Late) %
Late Delivered Qty / Total Delivered QtyKPI measures the share of articlesdelivered late in the concerning period. Tooearly deliveries are not considered.
Avg. Lead-time Goods Receiving Date - Order Generating DateKPI measures the average lead timebetween order and delivery.
Stock Coverage Avg. Daily Stock Qty / Avg. Daily Sales QtyKPI answers the question, which timeframe(days) is covered with the actual stock.
P&G-Metro SC Performance Improvement Project-- Tools- KPIs/ Scorecard Definition
9
KPIs KPI Value Scoring ScoreFill Rate (in % ) 84.7% (84.7%-60%)*2.5*50 30.9LTR-Too Late Deliveries (in %) 19.7% (40%-19.7%)*2.5*30 15.2Order To Delivery LT (in days) 3.0 (20/6)*(1/3)*6 6.7Total Score 52.8
KPIs Weight
Fill Rate (in % ) 50 (value - 0.6) *2.5 *weightLTR-Too Late Deliveries (in %) 30 (0.4- value)*2.5*weightOrder To Delivery LT (in days) 20 ((weight/6)*(1/value)*6* Value of the KPI
1 6
For the time being the focus of the scoring is on order related KPIs only (Fill Rate, LTR - Too Late Deliveries, Order To DeliveryLead-time)
100 600 40
Limits Scoring FormulaFull Score No Points
Scoring Concept
Example of Scoring sample report
P&G-Metro SC Performance Improvement Project-- Concept and Example
10
P&G-Metro SC Performance Improvement Project
� Execution
• Dedicate one P&G Logistics Manager to work with Metro SCM and HQ Buyer/Store Operation to jointly gain a deep understanding of store operation processes.
• Developed a set of Hypotheses on the key factors and root causesleading to low FR in each bucket and developed a set of solutions to address the root causes.
• The 4 stores (ZB, SZ, TJ, GZ) were selected for the pilot based on the relatively low level of promotion pack Fill Rate, then deploy nationally.
11
P&G-Metro SC Performance Improvement Project
� Pilot Stores
• The chart above shows Metro FR data for the 4 pilot stores during Jan-Jun07, the average FR is only 60%, TJ store even have 27% FR before.
0%10%20%30%40%50%60%70%80%90%
100%
Jan07 Feb07 Mar07 Apr07 May07 Jun07
ZB CS TJ GZ
� ZB is in Shanghai
12
P&G-Metro SC Performance Improvement Project
� Root Cause
• During the pilot project period (Jul07), service defects in the 4 stores significantly declined from 22.35% to 6.3% on “Promotion pack over allotment order”. Highlight has been the “CS store”, which could be reduced to 0 defect rate on “over allotment order”.
• Meanwhile, during the pilot period, for open allocation day order, we established a tracking to every store order, no store over inventory amount
when placing order, which greatly meet our target.
13
P&G-Metro SC Performance Improvement Project
� Results
• During the pilot project period (Jul07), service defects in the 4 stores significantly declined from 22.35% to 6.3% on “Promotion pack over allotment order”. Highlight has been the “CS store”, which could be reduced to 0 defect rate on “over allotment order”.
• Meanwhile, during the pilot period, for open allocation day order, we established a tracking to every store order, no store over inventory amount
when placing order, which greatly meet our target.
05
101520253035404550
All(Jan-Jun)
All Jul GZ(Jan-Jun)
GZ Jul CS(Jan-Jun)
CS Jul ZB(Jan-Jun)
ZB Jul TJ(Jan-Jun)
TJ Jul
Over allotment during allocation period Open allotment day
14
FR Improvement Project Phase I Review-- Fill rate improvement CY2007
��� �� ��� �
� ��� �� ��� �
� ��� �� ��� �
� ��� � ��� �
��� �� ��� �
� �� �� � �
� �� �
� �� � �
� �� �
� �� � �
� � � � � ��
� � �� �
� � �� �� � �
� � ! "
� �# � �
� �� �
� $� � �
� $
%& '() *+ , -. & (/ 0 &
� FR improved from previous 60%(Jan-Jul 07 average) vs current 76%(Aug07-Feb08 average), 16% improvement already.�
� Promotion pack unfilled rate decrease 50% after process implement.�
� In Feb08, we got historical high FR data as 82%.�
� FR project was successfully put in Global M&M and P&G joint 2007 annual report as the first China supply chain golden case.�
15
Contact Details
Metro: Mr. Denny Yang – Head of SCM [email protected]. Jin Lan – Metro China [email protected]. Xu Bin –Flow and Demand Manager of [email protected]. Nellie Wu – SCM [email protected]
P&G: Ms. Terry Tang – Metro Team CBD [email protected]. Kim Kehoe – P&G Customer Logistic [email protected]. Grace Li – Metro Team logistic [email protected]. Philip Cai – Metro Team Category Management Account [email protected]
16
Backup
17
Supplier KPI / Scorecard
SupplierABC
OrderQty
PlannedDelivery Date
GR-Date GR-quantity
GR (excludingover delivered
Qty)
LateDelivered
QtyArt. 1 100 15.07.05 15.07.05 120 100 0Art. 2 100 15.07.05 14.07.05 100 100 0Art. 6 100 21.07.05 22.07.05 40 40 40Sum 240 40
Leadtime Reliability Late% = Late Delivered Qty / Total Delivered Qty (over delivery excluded)Leadtime Reliability Late% : 40/240 = 16.7%
SupplierABC
Order quantity GR quantity Overdelivery
Shortdelivery
Art. 1 100 120 20 0Art. 2 110 80 0 30Art. 3 100 0 0 100Sum 310 200 20 130
Fill Rate shortfall% = (Ord Qty - Short Qty) / Ord Qty (over delivery excluded)Fill Rate shortfall% : (310-130)/310 = 58.1%
back
18
Supplier KPI / Scorecard
SupplierABC
Order SendingDate
Goodsreceiving Date
LeadTime
Order line 1 01.03.2006 05.03.2006 4 days
Order line 2 08.03.2006 15.03.2006 7 days
Order line 3 21.03.2006 27.03.2006 6 days
Average Lead Time in Days = (4+7+6)/3 = 5.6Lead-time = Goods Receiving Date - Order Generating
SupplierABC
Avg. Stock inMU
Avg. Sales inMU
Art. 1 50 2
Art. 2 50 3
Art. 3 100 5
Stock coverage = 200/10 = 20 daysStock coverage = Avg. Stock in MU / Avg.
back