working together to fulfil consumers wishes better, faster and at less cost ECR INSIGHT Web-site: www.ecr-all.org/russia Enabling technologies What are the results of PRICAT implementation? page 10 Address: 15/18, build. 4, Solyanka st., Moscow On Shelf Availability What solutions does Auchan use? page 8 Zero paper by 2020 When mobile digital signature becomes legal? page 11 2014 SEPTEMBER Тel.: +7 (495) 735 4378 ECR Award Who has won the prise in 2014? page 12 THE 10th ECR FORUM REPORT: ON PAGE 3 ECR CONFERENCE CALENDAR There will be plenty of remarkable events in October and November 2014: ECR organizes three conferences and a big shopper simulation workshop . We have designed an attractive agenda, invited experienced speakers and are going to provide you with many professional insights and useful networking. Register and invite your colleagues and partners! ECR SHOPPER MANIA ZERO PAPER BY 2020 • Shopper marketing, shopper insight, loyalty programs, category management; • Actual trends and original methods of shopper insights; • Foreign experience and global best practice. Keynote speakers: Marcel Corstjens, Unilever Chaired Professor at INSEAD; Jean-Jacques Vandenheede, Retail Insights Director Europe, Nielsen; • Best practice of implementation of invoicies, acts and delivery note in electronic form. - Investments - Involvement of contactors - Results: estimation of project efficiency • State officials invited: Ministry of telecommunications, Federal Tax Service, Ministry of Finance • Digital Signature – legislation changes RETAIL SECURITY. STRATEGY AND TACTICS OF LOSS PREVENTION BUILDING TRUST BETWEEN SUPPLY CHAIN PARTNERS OCTOBER 21, 2014 NOVEMBER 20, 2014 • • • Russian best practices and European experience in loss prevention Fraud investigation in the retail sector Security equipment: new products and interesting solutions OCTOBER 23, 2014 FEBRUARY 19, 2015 • • • How to build trust between supply chain partners and work together to improve the efficiency of Supply Chain? How to improve logistics efficiency through collaboration? How to reduce Out-Of-Stock and Out-Of-Shelf and increase the on-shelf availability? PREVIOUS EVENTS 1 MAR-PRO. The unique business simulation for retailers and manufacturers OCTOBER 22-23-24, 2014 Be the first to take part in an open session with the author – the creator of Storewars, Unilever Chaired Professor at INSEAD, Marcel Corstjens! • • • get knowledge and exercise in an exciting practical game; work out a joint platform for collaboration with business partners; devote 2,5 days to gaining intensive practical experience! The official distributor of Mar-Pro in Russia is Innovate Retail. To apply for the game send your request to: [email protected] www.ecr-all.org/marpro ECR COMMITTEES AND WORKING GROUPS CALENDAR - 2014 October 8/10 Shelf ready packaging 15/10 Loss prevention 15/10 On shelf availability 30/10 Enabling technologies December 3/12 Demand management 16/12 Enabling technologies 16/12 Electronic source documents November 12/11 Shelf ready packaging 18/11 Enabling technologies 24/11 Master data synchronization 26/11 Electronic source documents NEW MEMBERS OF ECR RUSSIA Neva Cheeses LLC is a cheese and butter producer. Production capacity for cheese is more than 1500 tons/month and for butter is about 1000 tons/ month. Company Neva Cheeses LLC rates 3d place and has 4% share of the cheese market in Russia (the second after Valio). Products are presented in more than 2000 cities in Russia, USA, Finland, Estonia and Israel. 2 SUN InBev - the Russian division of the world’s largest brewing company “Anheuser-Busch InBev.” The company works on the Russian beer market for 15 years and holds a leading position. “SUN InBev” owns a network of modern breweries in six Russian cities. The main brands of beer in Russia - BUD, “Klinskoe”, Sibirskaya Korona, Stella Artois, Lowenbrau, Brahma, Staropramen, Hoegaarden, Tolstyak and Bagbier. Supermarket network “Avoska” - one of the largest retailers of Moscow, the Moscow region, Nizhny Novgorod and Novosibirsk. Avoska was founded in 1999. At present the trademark Avoska unites more than 70 supermarkets. More than 350 well-known companies are the regular suppliers of this retailer. The group of companies Gradient – is one of the leading companies in Russia in the field of distribution of fast moving consumer goods (FMCG), it offers a wide range of production of more than 50 foreign and home producers; Schwarzkopf, Beiersdorf, Johnson&Johnson, Procter&Gamble, Unilever, Gillette, Colgate-Palmolive, SC Johnson, Kao Corporation, SSL International, Bourjois, COTY. THE 10TH ANNUAL ECR FORUM 1,186 professionals in the retail and FMCGindustry visited the Jubilee ECR Forum, which was held in Moscow on June 3-4, 2014. The motto of the 10th Forum – Growing the cake together – reflects the main idea of our community: to reduce costs and improve customer service quality together. Partnership is a key tool for retailers and suppliers to achieve growth in the market as a whole and in the framework of their business in particular. It is important to collaborate inside the company too, the partnership between different functional units is essential as well, because each department makes an important contribution to the success of the whole business. The program of the Forum included three streams of breakout sessions devoted to the best collaborative projects in the field of shopper insights, supply chain management and enabling technologies. - This year the professional level of collaborative projects appeared to increase significantly. This was noted by many Forum attendees. Finally we entered the era of real partnership between retailers and suppliers, – said ECR Russia Executive director Maximilian Musselius. 3 PLENARY SESSION The discussion about the high priority areas of FMCG business and retail was held with participation of top representatives of the largest companies - members of ECR: (from left to right) Pieter Boone (Metro Cash & Carry), Ilya Yakubson (Dixy Group), Mark Johnson (Mars Petcare), Laurent Kleitman (Unilever RUB), Silviu Popovici (PepsiCo Russia). PRESENTATIONS OF THE SESSION The plenary session was opened by ECR executive director Maximilian Musselius, who made a remarkable presentation in augmented reality format: the delegates could see his figure on a screen augmented by a three-dimensional pie chart, symbolising the three key activities of ECR and on the other hand – an anniversary cake. Pieter Boone, Managing Director, Metro Cash&Carry Russia: Any solutions aimed at increasing the efficiency of FMCG business are useless without cooperation and building trust between manufacturers and retailers. The Forum is an excellent platform to establish such a relationship, share best practice and ideas, and to develop the strategy of this partnership. 4 Maximilian Musseius, Executive Director, ECR Russia: The industry will move from mass marketing to customised offers. Just imagine: though all 500 passengers fly in one aircraft, each one pays his own price for the ticket. Therefore Big data technology will become a common thread in all the advanced projects in the near future. Ilya Yakubson, President, Dixy Group: We are ready to sign five-year contracts with suppliers who need to invest in their assets in order to produce private label for us. Because we understand that companies need to get loans and invest in their re. We are ready to take such a long-term commitment, though we never did this before - we usually signed contracts for a maximum of three years. I think it’s a significant change in our corporate mentality. Silviu Popovici, President, PepsiCo Russia: It’s normal that retailer demands more, and supplier responds “no.” One will surrender as long as it is economically feasible. But then the companies will focus on other things. It is important that the interaction is based on the win-win principle, not just win-loose. Laurent Kleitman, President, Unilever RUB: We have created a collaboration center for our customers, which provides everything for modeling consumer behavior, testing new shelf displays, and creating a new shelf space management. Usually pilot projects require time and money, and this center allows us to test quickly different programs aimed at investigation of consumers’ behaviour. Mark Johnson, Regional President, Mars Petcare: The principle of mutuality - the first of the five basic principles of Mars. Working together with suppliers and customers, we achieve mutual benefits and increase our profits. We have selected three areas for such cooperation: supply chain optimisation, insights for category growth and tailored customer marketing solutions. 5 PLENARY SESSION Marcel Corstjens, Unilever Chaired Professor at INSEAD: During the last five years manufacturers significantly outpaced retailers in terms of correlation of profits and investment. All retailers who have worked like maniacs generated such a capitalisation of their companies, that one would prefer bank deposit to investment in stocks of their companies. Retailers need to differentiate to be profitable. They need to be bad. Be worse in some areas to be the best in others. Suppliers have to focus on something certain too. Olexander Isaev, National MT Key Account Manager, JTI: The Russian tobacco market undergoes now a radical change: the advertising and promotion of tobacco were prohibited. Tobacco sales in kiosks and open displays of cigarettes in retail were restricted in June. Now the consumer starts looking for new places to purchase cigarettes, and this opens up new opportunities for retailers. Proper management of the tobacco category and efficient arrangement of shelf space can raise the traffic, increase the average check and boost sales in adjacent categories. X5 Retail Group has found an interesting solution in this area. Sergey Serkov, Category Director, X5 Retail Group: We have noticed that cigarettes had become the target purchase, which makes people go to the store. The category share was 4% in 2013, and we expect it to reach 6% by the end of 2014. This is a significant indicator for any shop. At the same time we realised that the average check of the smoker is 27% higher than the regular average check at the store. PRESENTATIONS OF THE SESSION 6 SHOPPER / DEMAND Leonid Gutin, Assortment Director, Dixy Group: Retailer has to understand the role of the category, to learn its customers, to know the decision tree of consumers. And manufacturer has to investigate the category, learn the consumers’ behaviour, and understand the laws which influence the purchase within the category. «Happy people buy more». Marina Erskova, Performance Management Leader, Nielsen: Approximately 25% of buyers declare that while shopping they have walked along the whole store, but if we look at the results of investigation we will find out that only 2% passed a half of an outlet. Sonja Holzschuh, Marketing Manager GfK Consumer Panel Services, GfK: When you work with a certain segment of buyers, rather than focus on an average buyer, you will get a clear understanding how to boost sales. Vadim Korsunskiy, Commercial Director, O’Key: Several years ago I couldn’t recall any project that we had developed in a collaboration with supplier – leader of a category. And now there are plenty of such projects, which enable our company to realise the success, progress and real results, and inspires us to start with new projects. Dr. Alexander Lauer, Director of Shopper Marketing & Category Management, Ferrero Germany. Tatyana Taris, Director of operational marketing, Eldorado: During the next 10 years we will intensively use CRM-systems, loyalty programs, big data, shopper insights and apply these knowledge in category management. Angelo Turati, Commercial Director, Х5 Retail Group: Our company used to develop assortment management and shelf space management. And we started to develop category management less than a year ago. PRESENTATIONS OF THE SESSION 7 ON SHELF AVAILABILITY & LOSS PREVENTION Vyacheslav Kryuchkov, Head of Purchasing, Auchan: Today it is typical that 40% of FMCG turnover is generated on weekends. That’s why we worked out a new tool, being inspired by foreign experience of ECR. We have implemented the report on POS data, which is provided by Kimberly-Clark. As a result, a customer always finds the goods on the shelf. Stefan Winter, Partner, James Bacos, Practice Leader, Oliver Wyman: We have always had the problem of choosing between cost reduction and increased product availability on the shelf (Shrinkage vs On Shelf Availability). And we decided to focus on fresh goods: maintaining a high level of freshness, we increased sales, and in parallel our loss in fresh group Maria Clara Esguerra, Global Customer Service Manager, Nestle: We can get the optimal On shelf Availability results if retailer and the supplier collaborate in three areas: sales, demand planning and enabling technologies. Valentina Zolotareva, Head of client collaboration, «Perecrestok» and «Carousel», X5 Retail Group: We strive to configure up the system so that it would reveal the problem zones of all our suppliers. This work should be collaborative. Suppliers need to observe the data on a daily basis and ask questions concerning their alert zones. Only in this case we can quickly achieve high level results in OSA projects. IIvan Kanaev, NKA Customer Service Manager, Baltika: Manufacturer must be the source of best practice and react rapidly to all the requests of retailer. There are not so many unusual requests for Customer Care service - approximately 15%. Our response to the request usually takes two hours. Stanislav Gerasimov, On-Shelf Availability Manager, Procter & Gamble: About 20% of hot products make up 80% of loss, so if we focus on these hot products, it is possible to reduce the loss in general. PRESENTATIONS OF THE SESSION 8 EDI & MASTER DATA SYNCHRONIZATION Marcus Pannier, Vice President Informatica, PIM (Product Information Management), EMEA & APJ, Informatica: The data and the way you connect different sources and different types of data will become very important in the future. If you are able to link the information about your product with all the necessary parameters and bring this information to consumer, it will ensure your success in the business and improve the quality of your work. This is exactly what you need - to deliver the right product at the right time in the right place and to the proper buyer. Lubov Konoplina, Head of Master Data Management, O’Key: The use of the electronic catalog will make the fail in compliance with global standards for assigning bar codes impossible and it will improve the situation on the Russian market in general. Andrey Lukyanenko, Specialist of the Supply Chain Technologies department, Metro Cash&Carry: The keystone of successful cooperation between the companies is the confidence of master data and 100% identity of data in contractors’ information systems. Elena Zhukova, Customer Service Manager, Baltika: During the last few months more than 75 SKU of “Baltika” have been activated in Metro Cash & Carry due to the catalogue. As a result, the number of errors in the EDI messages decreased by 20%. Ivan Kanaev, NKA Customer Service Manager, Baltika: Implementing SLSRPT and INVRPT enabled us to monitor out-of-shelf on a daily basis and identify the reason of OOS. We can even find the person who is responsible for the problem. Thus, we remove 50% of the factors causing Out-of-Stock. Vladimir Chernega, Analytic and development department head, Dixy Group: Observing the statistics on sales we can build up a model to make forecasts with high probability. We can reveal the virtual stock or out-of-shelf, or find goods which are expired, but not written off the inventory. According to the results of the project it turned out that we have one of the best results of OSA in Europe. PRESENTATIONS OF THE SESSION 9 EDI & MASTER DATA SYNCHRONIZATION Iliya Chernov, Project Manager, IT department, X5 Retail Group: Every year we spend about 8 million rubles on approval of price specifications. We have eliminated these costs by implementing PRICAT and accumulating all information in SAP. Victor Zhilyaev, KA relations & Project manager, L’Oreal: Usually the procedure of price coordination takes from two weeks to two months; Thanks to the introduction of PRICAT we have significantly reduced this time limit. The message passes through our system in 10 minutes. Elena Davletbaeva, Credit Control Lead, Wimm-Bill-Dann: As a result of electronic invoices implementation with one of our largest customers - X5 Retai Group, we were able to eliminate paper in processing the source documents. Human mistakes have been reduced to zero. Delivery time is now 11 minutes instead of three days, as it was before. And the most important thing is that we achieved up-to-date payment, because the number of incorrect documents reduced three times. Past due debt reduced to almost zero. 10 PRESENTATIONS OF THE SESSION Vyacheslav Polikarpov, IT Business Partner, X5 Retail Group: After we implemented electronic invoices with “Wimm-Bill-Dann”, the problem of correct price became a top priority for us. Electronic invoices are very useful for automation, but if the price is not correct they don’t work. That’s why we have set up the project “Price-catalogue”. We can reduce by 40% the number of incorrect documents by synchronising prices in our system and the systems of our suppliers. Roman Tarasov, Director, Legal practice, Deloitte: Electronic invoices started to be used recently. Therefore, in the next one or two years, we are unlikely to see some bright jurisprudence regarding e-invoices, which would disclose all the issues and would be responsible for them. The formation of the judicial practice is influenced by two factors. Firstly, the test pass on a certain schedule and the documents which are issued now will be checked in about two years. Secondly, the tax process itself is a long process that includes request of documents, organization of counter checks, etc. Maximilian Musselius, Executive director, ECR Russia: Working out the road map “Improving the quality of the regulatory environment for business,” we have laid important “umbrella” principles of transition to electronic document flow that will enable us to fulfil the ambitious task - to eliminate paper bureaucracy across the whole country. This is ban on the use of only paper documents, the unlimited use of electronic signature, the right to keep any documents in electronic archives, etc. Olga Lapina, State Advisor of the Russian Federation of the 3 class: At the request of the business we have made several changes in a draft format for the electronic Universal Transmission Document. For example, we have added the ability to use multiple signatures, changed the structure of the information field - removed limitation on its scope. In addition, it was decided that the Universal Transmission Document can be a deed pool, which is very important for the services sector. Alexander Ivlev, Managing Partner, Ernst & Young: The Agency for Strategic Initiatives developed eleven road maps, which are observed by the President’s Administration. We feel a well-marked control of the state. And so far, fortunately, we did not have a single item that we failed to align with the authorities. Electronic document flow is one of the most important aspects of the roadmap - approximately 40% of its content is dedicated to this topic. If we realise at least a part of these plans, it will become much easier to run the business in Russia. Estonia is a good example of us. 100% of the population has electronic identity cards, 99.9% of interaction between government and citizens is implemented through a variety of electronic services, all voting in the country is realised in the Internet, 95% of schools are connected to the e-learning programs, and the registration of new enterprises in Estonia takes 18 minutes! ZERO PAPER BY 2020 Alexander Kuznetsov, Head of the Russian Ministry of Communications and Mass Media: We have worked out a number of approaches that enable us use the reinforced qualified signature on mobile devices without changing the law (which is very important). I hope that next year it will be available to all of us. A breakthrough will be very serious. The use of digital signature in a cloud is very tempting. But according to the law, the environment in which the signing is performed, must be protected. Signing in the cloud is not recognized as a signing in a secure environment - this is the position of the Federal Security Service as a regulator. At the same time in the B2B filed documents can be signed with enhanced but not qualified signature in the cloud upon condition of signing agreement of parties. PRESENTATIONS OF THE SESSION 11 ECR AWARD 2014 ECR Award 2014 traditionally took place on June 3 at the evening reception of the 10th ECR Forum. This is the annual ceremony which is aimed at supporting and promoting examples of successful cooperation between retailer and supplier. The best case in demand management: Professional Shopper in Cash&Carry. Ekaterina Serebryakova, National Category Manger, Danone; Egor Shurukhin, Head of Research and Complementary Marketing, Metro Cash&Carry. The best case in supply chain management: Project «Auchan-transit»: 24 hours from the order to the shelves. Vyacheslav Kryuchkov, Head of Purchasing, Auchan; Ruslan Akhmetzhanov, Customer Logistics & Distribution Manager, Kimberly Clark. The best case in enabling technologies: SLSRPT и INVRPT. OSA - the first steps and first benefits. Ivan Kanaev, NKA Customer Service Manager, Baltika; Vladimir Chernega, Analytic and development department head, Dixy Group. Pricing specifications exchange automatistation with EDI technology. Victor Zhilyaev, KA relations & Project manager, L’Oreal; Iliya Chernov, Project Manager, IT department, X5 Retail Group. WINNERS’ PRESENTATIONS 12 SAVE THE DATE! THE 11-th ANNUAL ECR FORUM JUNE 2-3, 2015 MOSCOW www.ecr-all.org/russia
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