Introducing the ECR Road Map

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Introducing the ECR Road Map

• Dr Paul Chapman
• Cranfield School of Management

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The ECR Road Map
Call to Action
Source Beck, A., Bilby, C.A.L., Chapman, P.A.
and Harrison, A., (2001) Shrinkage Introducing
a Collaborative Approach to Reducing Stock Loss
in the Supply Chain, ECR Europe Brussels.
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The ECR Road Map
Call to Action
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Call to Action 1 pager
Foregone Income Additional Costs
Sell more more often at higher margin Variable costs Fixed costs Others
Sales opportunity Cost opportunity
Scope Scope
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Call to Action - Example
Foregone Income Additional Costs
Sell more Wider product range More store locations more often OSA Frequent ordering Increase footfall at higher margin Trade up shoppers New product lines Reduced Shrink Reduced expenses Fixtures Less Inventory
Sales opportunity 15m Cost Saving 2m
Scope Hot product lines / all stores Scope Hot product lines / all stores
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The ECR Road Map
Call to Action
1. Plan
2. Map Measure
6. Evaluate
3. Analyse
5. Implement
4. Develop Solutions
Source Beck, A., Bilby, C.A.L., Chapman, P.A.
and Harrison, A., (2001) Shrinkage Introducing
a Collaborative Approach to Reducing Stock Loss
in the Supply Chain, ECR Europe Brussels.
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Concentrate on Hot Products
100
20 of SKUs account for 50 of loss
90
Cumulative Losses
8 of SKUs account for 30 of loss
Number of SKUs
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Project Charter 1 Pager

• Which Products?
• Process Scope (from where to where?)
• Performance measures and improvement target
• Shrinkage - ??
• Sales ??
• Time Table
• Start date
• First results
• Project completion

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Project Charter 1 Pager

• Which Products?
• Hot Products
• Process Scope (from where to where?)
• Store operations in hot stores
• Performance measures and improvement target
• Shrinkage - 50
• Sales 20
• Time Table
• Start date now!
• First results next week
• Project completion 3 months

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Identify Stakeholders
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Stakeholder Analysis 1 pager
People or Groups Affected People or Groups Affected
Names Names
Level of Commitment Enthusiastic Support
Level of Commitment Help It Work
Level of Commitment Compliant
Level of Commitment Hesitant
Level of Commitment Indifferent
Level of Commitment Uncooperative
Level of Commitment Opposed
Level of Commitment Hostile
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The ECR Road Map
Call to Action
1. Plan
2. Map Measure
6. Evaluate
3. Analyse
5. Implement
4. Develop Solutions
Source Beck, A., Bilby, C.A.L., Chapman, P.A.
and Harrison, A., (2001) Shrinkage Introducing
a Collaborative Approach to Reducing Stock Loss
in the Supply Chain, ECR Europe Brussels.
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Supply Chain Overview
Gillette Pack Centre, UK
Gillette DC, Hungary
Tesco DC, Hungary
Tesco store, Hungary
Distribution Node Store
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Supply chain process hierarchy
Supply Chain
Site
Process Steps
Supplier DC
Receive products
Retailer DC
Put away in warehouse
Pick order then marshal pallets
Retailer Store
Break seal in yard
Load pallets into lorry
Back lorry on to dock
Unload pallets on to dock
Dispatch to Carrefour Dist. Ctr
Check pallet references
Check number of pallets
Attach pallet label
Move pallet to warehouse location
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Map Process Detail
Lorry Arrives
Check Paperwork Seal
Unload Delivery
Sign for delivery
Close Seal Lorry
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Measure Basic Inputs and Outputs of Every Site
Retailer DC
Supplier DC
Retailer Store
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The ECR Road Map
Call to Action
1. Plan
2. Map Measure
6. Evaluate
3. Analyse
5. Implement
4. Develop Solutions
Source Beck, A., Bilby, C.A.L., Chapman, P.A.
and Harrison, A., (2001) Shrinkage Introducing
a Collaborative Approach to Reducing Stock Loss
in the Supply Chain, ECR Europe Brussels.
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FMEA Risk Assessment

• Step 1. Identify the failure modes in each step
  of the process
• In your group brainstorm for 1 minute per step
• Capture every idea on a separate PostIt Note
• Step 2. Score each failure mode
• Use the S / O / D scoring scale
• S severity
• O likelihood of occurrence
• D likelihood of detection
• Step 3. Brainstorm the causes of the highest
  scoring risk
• Use the fishbone diagram

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Risk Assessment Table 1 pager
Process Step Potential Failure Mode(s) Potential Effect(s) of Failure S O D RPN




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Risk Analysis Scoring
S 1 Single item
S 2 Case / inner pack
S 3 Crate / shipper carton
S 4 Pallet / dolly
S 5 Lorry load
O 1 Yearly or less
O 2 Monthly
O 3 Weekly
O 4 Daily
O 5 Hourly
D 1 Detectable prior to event
D 2 Detect as it happens
D 3 Detect at end of day
D 4 Detect at end of period
D 5 Not detectable
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FMEA Example
Process Step Potential Failure Mode(s) Potential Effect(s) of Failure S O D RPN
Goods moved to secure store- room Key is lost Store goods in hall 2 3 1 6
Goods moved to secure store- room Lock Broken Free access 2 1 1 2
Goods moved to secure store- room Door not locked Free access 2 5 4 40
Goods moved to secure store- room No room in store- room Store goods in hall 2 4 3 24
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Fishbone Diagram

• Visual way to represent the relationship between
  a failure mode and possible causes
• Every failure mode will have several causes

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Fishbone Diagram 1 pager
People
Materials
Failure mode
Machines
Methods
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Fishbone Diagram Example
People
Materials
Dont care, not important
Unclear instructions
Forgot
Late delivery to store
Key holder on holiday
Door not locked
Lock broken
Other jobs took priority
Lost key
Machines
Methods
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Analysis Summary
Process Step Potential Failure Mode(s) Potential Effect(s) of Failure S O D RPN
Goods moved to secure store- room  Door not locked Free access 2 5 4 40
Goods moved to secure store- room  No room in store- room Store goods in hall 2 4 3 24
1. FMEA
2. Fishbone
Door not locked
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The ECR Road Map
Call to Action
1. Plan
2. Map Measure
6. Evaluate
3. Analyse
5. Implement
4. Develop Solutions
Source Beck, A., Bilby, C.A.L., Chapman, P.A.
and Harrison, A., (2001) Shrinkage Introducing
a Collaborative Approach to Reducing Stock Loss
in the Supply Chain, ECR Europe Brussels.
27
Action Planning
Improvement / Potential Opportunity ()
Improvement / Potential Opportunity () High
Improvement / Potential Opportunity () Low
Improvement / Potential Opportunity () Slow/Hard Fast/Easy
Improvement / Potential Opportunity () Ease of Implementation Ease of Implementation Ease of Implementation
Change Project
Major Initiative
Quick Win
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The ECR Road Map
Call to Action
1. Plan
2. Map Measure
6. Evaluate
3. Analyse
5. Implement
4. Develop Solutions
Source Beck, A., Bilby, C.A.L., Chapman, P.A.
and Harrison, A., (2001) Shrinkage Introducing
a Collaborative Approach to Reducing Stock Loss
in the Supply Chain, ECR Europe Brussels.
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Been There, Done That?

1. List the attributes of projects you have worked
   on
2. Highlight the key differences between poor
   projects good ones

Attributes of Poor Projects Attributes of Good Projects

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ECR Road Map Principles

• Collaborate and engage all stakeholders
• Focus effort on the processes Products /
  Information / Money
• Identify greatest oppportunities then target root
  causes
• Remove the opportunity for loss or error
• Evaluate learn

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ECR Road Map Benefits

• Ensures the right resources and people engaged
• Better and more sustainable results
• Less daunting
• More cost efficient
• Higher probability of success
• Quicker to implement
• Lessons can be reapplied to other problems

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The End (or the beginning .)