1、2003 GMA Logistics Study,Key Industry Trends in the Food, Grocery and,Consumer Product Supply Chain,By Roland BergerStrategy Consultants for GMA -Grocery Manufacturers of America,April 2003,2 0 0 3,G M A,L o g i s t i c s,S t u d y,GMA is the worlds largest association of food, beverage and consumer
2、 product companies. With U.S. salesof more than $450 billion, GMA members employ more than 2.5 million workers in all 50 states. Theorganization applies legal, scientic and political expertise from its member companies to vital food, nutri-tion and public policy issues affecting the industry. Led by
3、 a board of 44 Chief Executive Ofcers, GMAspeaks for food and consumer product suppliers at the state, federal and international levels on legislativeand regulatory issues. The association also leads efforts to increase productivity, efciency and growth inthe food, beverage and consumer product indu
4、stry.Founded in 1967, Roland Berger Strategy Consultants has grown to become one of the leading globalstrategy consulting rms with annual revenues in excess of $500 million. Following a management buyoutfrom Deutsche Bank in 1998, which returned the rm to an independent partnership organization, the
5、company has strengthened its leadership position and now has a worldwide network of 32 ofces in 22countries. Roland Berger offers its clients: entrepreneurship, creativity, and a pragmatic “down-to-earth”sense for successful implementation. The focus is on delivering creative strategies that work!Co
6、pyright 2003 by the Grocery Manufacturers of America. All rights reserved. This publication may not be reproduced, stored inany information retrieval system or transmitted in whole or in part by any means electronic, mechanical, photocopying, record-ing or otherwise without the express written permi
7、ssion of the Grocery Manufacturers of America. Contact the Industry AffairsGroup of the Grocery Manufacturers of America (202.337.9400) for permission to reprint material in this report.i,Ta b l e o f C o n t e n t s,Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8、 . . . . . . . .iii,Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .v,Chapter 1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,Chapter 2. Logistics Costs . . . . . . . . . . . . . . . . . . . . . . . . .
9、. . . . . . . . . . . .3,Chapter 3. Supply Chain Responsiveness . . . . . . . . . . . . . . . . . . . . . . . . . .7,Chapter 4. Inventory Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10,Chapter 5. Perfect Order Components . . . . . . . . . . . . . . . . . . . . . . . . .
10、 . .15,Chapter 6. Supply Chain Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20,Chapter 7. Forecasting Accuracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23,Chapter 8. New Logistics Challenges and Trends . . . . . . . . . . . . . . . . . . . .24,ii,I,Execut
11、ive Summary,mproving supply chain efciency and effective-ness is an ongoing challenge for the consumerpackaged goods industry. While important strideshave been made to “clean up” untidy supply chainpractices by improving order-cycle times and cus-tomer service, the industry still faces daunting chal
12、-lenges.Many of todays supply chain “pain points” wereidentied as early as 1993 by the EfcientConsumer Response (ECR) initiative, and severalcompanies are still struggling to efciently elimi-nate or even reduce those problems.Unsaleables, invoice deductions and out-of-stockscontinue to create costly
13、 inefciencies for manufac-turers and their customers.In order to address these outmoded and non-value added business practices, GMA continues toexamine the logistics practices and operations of itsmembers. The 2003 GMA Logistics Study investigat-ed current supply chain performance and strategiesof G
14、MA member companies to provide a compre-hensive overview of the industrys overall produc-tivity in this critical area.Key Survey FindingsThe 2003 GMA Logistics Study revealed six keyinsights into the logistics operations of todays food,grocery and consumer packaged goods supplychain. Those insights,
15、 which are analyzed in moredetail in the following report, include:1. Logistics Costs are RisingOverall, it has become more expensive forCPG manufacturers to manage logistics.Logistics-related costs have increased 12 per-cent, from 6.6 percent of net sales in 1999 to7.4 percent in 2002.,2. The CPG S
16、upply Chain is More ResponsiveThe consumer packaged goods supply chainhas become more demand-driven, with order-to-delivery cycles dropping 79 hours ormore than three days since 1999.3. Inventory Levels are Slowing DecreasingAfter a sharp increase in 1999 to 46.1 daysworth of sales, inventory levels
17、 have comedown to 44.7 days solid progress, but stillfar behind the ECR target of 27 days.4. Companies are Focusing on “Perfect Order”Service MetricsComponents of the “perfect order” ordercompleteness, on-time delivery, damage-freeorders and invoice accuracy are viewed byCPG companies as important c
18、ustomer servicemetrics. “Perfect Orders” have increased from58 percent in 1999 to 64 percent in 2002.5. Use of Supply Chain Services is LimitedCompanies offer a wide array of supply chainservices, but the top seven services accountfor, on average, only 41 percent of shippedvolume from the manufactur
19、er.6. Forecasting Accuracy Remains LowForecasting remains a signicant issue, with aMean Absolute Percentage Error (MAPE) ofonly 34 percent on national and 44 percenton shipping location levels.The study also identied several emerging sup-ply chain challenges CPG companies face as theycontinue to pur
20、sue revenue growth and prot mar-gin improvements:1. Improving On-Shelf Availability of ProductsOn-shelf availability is becoming a criticalissue for manufacturers and retailers. Onaverage, only 92.6 percent of food and gro-cery products in the top 25 categories are,iii,2 0 0 3,G M A,L o g i s t i c
21、s,S t u d y,available for sale to the consumer at anygiven time. The keys to increasing on-shelfavailability are cooperation between manu-facturers and retailers and the exchange ofmeaningful consumer data.2. Synchronizing DataThe current system for exchanging data amongtrading partners continues to
22、 produce inef-ciencies in the CPG supply chain, includingorder errors, invoice discrepancies, delays initem introductions and out-of-stocks. In 2002,the industry began the difcult process ofimplementing global standards, item catalogsand data synchronization to help reduce theestimated $25-$50 billi
23、on cost of incorrectinformation in the supply chain.3. Increasing the Flexibility of Ordering anddeliveringMost retailers and wholesalers say they arelooking for increased exibility in orderingand delivering. With the shortening oforder-to-delivery cycles, manufacturersiv,will continue to face addit
24、ional pressure ontheir supply chains and resources.4. Improving Forecasting AccuracyAccurate forecasting is a key driver ofimproved customer service and reduced inven-tory. However, manufacturers must look atalternatives to the “historic-based forecasting”approach to improve forecasting accuracy.5.
25、Improving Internal Cross-FunctionalCollaborationCollaboration with external partners ishampered by manufacturers own ability tocollaborate internally especially between theLogistics and Sales/Marketing functions. Oneof the main reasons for this lack of internalcollaboration is the misalignment of co
26、mmongoals and objectives. Customer teams arehelping companies to improve the alignmentand integration between different functions.These teams are cross-functional by designand seek to balance cost and service tradeoffsby collaborating internally and externally.,AcknowledgementsGMA wishes to thank th
27、e members of the GMA Logistics and Distribution Committee who were involvedin designing the survey, reviewing the results and preparing the nal report.A special thanks to the 25 companies who completed the extensive survey:McCormick Spice,Barilla America, Inc.Church & Dwight/Arm & HammerDiamond of C
28、aliforniaEnergizer Holdings, Inc.The Gillette CompanyGeneral Mills, Inc.Hershey Foods CorporationH.J. Heinz CompanyJ.M. Smucker CompanyKraft Foods, Inc.Land OLakes, Inc.Mars Inc./Kal Kan Foods, Inc.,Motts Inc.Musco Family Olive CompanyNestl Purina PetCare CompanyNestl USAPzer Inc.Playtex Products, I
29、nc.The Procter & Gamble CompanyS.C. Johnson & Son, Inc.The Dial CorporationQuaker Foods & BeverageWelch Foods Inc.Unilever Bestfoods, NA,Special thanks to Roland Berger Strategy Consultants for conducting the research, analyzing the data andpreparing this report.v,Chapter1,Logistics?,Logistics measu
30、rement is also critical from a,companies improve protability by assessing the,value of various business transactions with,of your logistics operations is a key step toward,ing goals:,opportunities for growth.,and administrative costs,formance can help you answer these questions:,the value of company
31、 activities with cus-,tomers and suppliers., Increasing revenue growth by providing the,inventory that could be redirected toward,growth initiatives?, Are you providing enough or too much ,service to your customers? What is the,as well as revenue opportunities.,I n t r o d u c t i o n,Why Measure th
32、e Performance of,distribution centers and carriers the opportunities,for things to go wrong are wide open.Measuring and monitoring logistics costs helpscost-savings standpoint. For an average consumerpackaged goods company, logistics costs representcustomers and suppliers. Measuring the performance
33、more than 7 percent of net sales. Measuring andmonitoring these costs helps to achieve the follow-reducing costly inefciencies and maximizing Improving protability by reducing operatingA systematic assessment of your logistics per- Improving protability by carefully assessing Are your logistics oper
34、ations enhancing oreroding shareholder value? Do you have capital tied up in slow-movinglevel of customer service that keeps currentcustomers satised while attracting new ones. Identifying differentiating product and serviceofferings that will improve customer serviceresulting impact on your bottom
35、line? Determining whether or not signicant opera-,Measurement has BecomeCritical to the Success ofMany Business OperationsCompanies are increasingly adopting tools suchas “balanced scorecards” to monitor the health oftheir business activities and to make the necessarystrategic changes. And few busin
36、ess areas need tobe measured more extensively or more frequentlythan logistics.Why is measurement so critical in the logisticsarena?Simply put, logistics has more “moving parts”than most operational functions. With products,orders and data owing through so many points plants, third party warehouses,
37、 over-ow facilities,tional improvements are necessary.Three key questions should be addressed as partof logistics operations measurements: What are the most important measures forlogistics operations? What is our current performance? What should be our targets for improving ourperformance?A major go
38、al of the 2003 GMA Logistics Studywas to ensure that study data would create arelevant and accurate picture of key supply chainmeasurements and performance. Information fromthe study may help you benchmark your companyslogistics performance and identify potentialperformance gaps.1,Exhibit1,1.,2.,2 0
39、 0 3,G M A,L o g i s t i c s,S t u d y,About the StudyGMAs Logistics and Distribution Committee andRoland Berger Strategy Consultants launched theLogistics Study in Fall 2002. The goal of the studywas to investigate current supply chain performanceand logistics strategies of GMA members.The Study Pr
40、ovides Insightsinto Supply ChainPerformance and Strategiesof GMA MembersGMA and Roland Berger Strategy Consultantscreated, tested and distributed the study question-naires to GMA members. The questionnaire wasdesigned to solicit and capture information regardingthe industrys key supply chain-related
41、 performancemetrics and trends.Responses were used to compare metrics fromsimilar surveys conducted in 1993, 1996 and 1999and to ultimately benchmark logistics performanceacross various data points. Information gathered fromsurvey participants also provided important insightsinto new supply chain st
42、rategies and challenges incustomer service activities among CPG companies.A total of 25 companies or independent operat-ing units within larger corporations responded to,the survey. Compared to 1996 and 1999, theresponses came from fewer, but on average, largercompanies which can be partly attribute
43、d toindustry consolidation. When reviewed by size, thesurvey sample of respondents is representative ofthe GMAs membership.A strong cross-section of companies participatedin this years study, roughly half of which wereparticipants in previous GMA logistics studies. Therevenue prole for participants
44、was similar to thatof 1999, with more companies comprising the “morethan $8 billion” revenue bracket and fewercompanies comprising the “$1.5 to $3 billion”group. Most of the 2002 survey respondents conductbusiness in the dry grocery (68 percent) and frozengrocery (24 percent) categories. The majorit
45、y ofcompanies surveyed distribute products primarilythrough the warehouse-delivery process.Surveys were distributed to logistics executivecontacts within the GMAs membership, with themajority of respondents holding the title of“Director” or higher.Due to the different composition of companiespartici
46、pating in the 1999 and 2002 GMA LogisticsSurveys, some of the results may not be directlycomparable and should be seen as trends rather thanan absolute comparison.,R e s p o n d e n tRevenues (2002),P r o f i l eCategory Participation,More than $8 billion$3.1 8 billion$1.5 3 billionLess than $1.5 bi
47、llion,17%17%22%44%,Dry GroceryFrozen groceryRefrigerated groceryHBC and cosmeticsConfectionary,68%24%20%20%16%,Revenues (1999) N=28,DairyPaper products,12%4%,More than $8 billion$3.1 8 billion$1.5 3 billionLess than $1.5 billion,11%18%29%44%,Other,12%,2,Chapter2,Exhibit2,L o g i s t i c s,C o s t s,
48、Logistics Costs are RisingAs retailers push more responsibility down the sup-ply chain to manufacturers and the demand forshorter order-to-delivery cycles increases, logisticscosts for manufacturers continue to rise.Logistics Costs have Increased12 Percent, from 6.6 Percentof Net Sales in 1999 to7.4 Percent in 2002Respondents reported that logistics costs haveincreased 12 percent, from 6.6 percent of net salesin 1999 to 7.4 percent in 2002. In 2002 alone,logistics costs increased 2.7 percent, from 7.2 to,
