Retailers Honored for Supply Chain Efforts

Safeway, Wal-Mart, and Rite Aid were among the retailers recognized for their supply chain collaboration efforts during the Voluntary Interindustry Commerce Solutions Association (VICS)/U Connect Annual Conference held last week at the Orlando World Center Marriott Resort.

The 2009 VICS Collaborative Commerce Achievement Awards honor outstanding companies for their strategic thinking and leadership, as well as the implementation of GS1 US standards and VICS collaborative commerce guidelines that have resulted in more effective supply chain practices and partnerships. The awards recognize the positive results of company-wide dedication to customer satisfaction that have made continuous improvements to the supply chain.

“Despite the economic pressures facing companies in our industry, or perhaps because of them, we had an outstanding selection of nominations for the awards this year,” said Joe Andraski, president and CEO of VICS.

The following are some of the 2009 VICS Collaborative Commerce Achievement Awards Winners, along with their accomplishments noted by the judges:

Supply Chain Excellence: Safeway
Safeway collaborated with suppliers, specifically Kimberly-Clark, to improve in-stocks at the store shelf during promotions. Within six months, lost sales during promotions dropped by half, delivering a 100-basis point increase in promotional sales volume for Kimberly-Clark products.

To overcome obstacles, Safeway re-engineered the business processes in collaboration with its retail stores, warehouse and distribution, category management, and supplier partners. With the new process, Safeway and its supplier partners access near-real-time data on store-level demand and collaborate frequently, often daily. They analyze exceptions and push promotional product to stores that need it.

VICS CPFR (Collaborative Planning, Forecasting and Replenishment) Implementation Excellence: Rite Aid Corp. and Kimberly-Clark
Rite Aid’s CPFR program surpassed critical mass with 50 suppliers, and the CPFR program with Kimberly Clark is a prime example. The two companies derive a single, time-phased shared forecast for sales and orders. As a result, Rite Aid’s sales of Kimberly-Clark products have increased, while inventory has decreased by 13 percent. Fill rates have improved 8 percent.

The drug chain’s CPFR partners as a group achieve half the out-of-stock rates of non-CPFR suppliers. They also have service levels 4 percent higher, inventory reductions of up to 17 percent, and a reduction in merchandise returns of 37 percent.

Rite Aid shares its ad plan and POS data with Kimberly-Clark, along with SKU-level forecasts, inventory levels, and ad plans for each DC. Kimberly-Clark recommends forecast improvements to Rite Aid, and together they have avoided $1.2 million in out-of-stocks.

Sustainability Excellence: Wal-Mart
Wal-Mart created a holistic series of sustainability-focused programs involving over 7900 stores, 2 million associates, 61,000 suppliers and 176 million weekly consumers worldwide.

Called “Sustainability 360,” the programs are progressing toward goals of 100 percent renewable energy, creating zero waste, and offering assortments of more energy-efficient and environmentally preferable products.

Wal-Mart has started measuring and improving sustainability performance in a series of networks with suppliers, including fossil fuel reduction, alternative fuel use, more sustainable buildings, increasing truck fleet efficiency, reducing the amount of waste going to landfills, adding more local food suppliers, adding more organic textiles, and energy-efficient electronics. It also encourages its associates to maintain voluntary personal sustainability projects at home and in their communities, and has received more than 480,000 pledges from associates for sustainability initiatives.
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