ECR BALTIC FORUM

RIGA, 14th of November 2007

On Shelf Availability

Frank Zimmermann

( Customer Service Development Manager )

Agenda :

1. Unilever
2. It all starts with the shelf
- statement 1
- Unilever : global OSA - activities
3. OSA Germany
- GS1 working group
- consumer reaction
- GS1 : next steps
4. Root cause : examples / snap shots
5. Why OSA is important
6. OSA : Unilever approach
- statement 2
7. ECR activities
- statement 3
 Unilever mission: Vitality

Vitality is the heart of Unilever. Our

mission is to meet everyday needs for
nutrition, home hygiene and personal care
with brands that help people feel good
and get more out of life.
Bee :
Represents creation,
pollination, hard work and Tea : a plant or an
bio-diversity. Bees symboliese extract of a plant,
both environmental challenges such as tea. A symbol
and opportunities. of growing and farming.

Hair: a symbol of beauty and

looking good. Placed next to the
flower it evokes cleanliness and Heart : a symbol
fragrance; placed near the hand of love, care and health.
It suggests softness.
Unilever
 Unilever

206 000 employees,

Ice Cream, Foods ambient & chilled,
Home and Personal Care
business in around 150 countries

• ca. 40 Billions € Turnover

• 150 Mio. shopper every day for Unilever products
• 5 Billion € for advertising & promotions
• 1 Billion € invest in R&D
• 5.169 employees in R&D
• 337 production sites on 6 continents
 Unilever

22 Countries
83 Sourcing Units
It all starts with the shelf
It all starts with the shelf
 Unilever : global OSA activities
Europe

UK
Germany
Denmark

Poland
Portugal
Italy
NA
Finland
Baltics

US

Canada

Asia

Thailand

Vietnam

Indonesia
Latam

Argentina

Brazil

Chile AMET

Mexico
South Africa

Turkey

Arabia

Project Planned
Project in Place
 Unilever : global OSA activities
ASIA
Global Global
Retailer 1 Retailer 2
 Availability Increase
 Retailer 1 94% to 99.6%
 Retailer 2 91% to 97.5%
 Biggest Losses:
 Retailer 1 (H & B)
 New product
introduction (NPD)
 Order process (demand
signal)
 BOS organisation
 Active SKU v. inactive
SKU’s database errors
 Retailer 2
 Inventory Accuracy (PI
alignment)
 Promotional Forecasting
MIDDLE EAST
Global
Retailer 2
Availability Increase
 Foods 97% to 98.8%
 HPC 89% to 98.2%
Biggest Losses :
 Retailer 1 (Foods)
 merchandising errors
 Order process (demand
signal)
 Retailer 2 (HPC)
 Co-packing failure
 Order process (demand
signal)
 BOS - shelf organisation
 Factory Supply Failure
 Promotional Forecasting
 Active SKU v. inactive
SKU’s database errors
UK
Global Global
Retailer 3 Retailer 1
Availability Increase
 Retailer 3 94% to 97%
(best in class – globally)
 Retailer 1 88% to 97%
Biggest Losses
 Retailer 3(Laundry & Beauty)
 New product introduction
(NPD)
 Order process -tbc
(demand signal)
 PI alignment (inventory
accuracy)
 BOS organisation
 Retailer 1 (Frozen)
 Cabinet Replenishment
 BOS organisation
 Order process
 New product introduction
(NPD)
 Unilever : global OSA activities

Poland

99.0%
wth
Retailer 1 OS
A gro

40
stores
+ 2.8% 96.2%

Jan’05 Dec’06

Retailer 2 wth 98.9%

ro
Ag
OS
32
+ 3.2% stores
95.7%

Jan’05 Dec’06
 GS1 – Germany : OSA – working group

Milestones I

 Development of a root cause catalogue alongside the

Supply Chain ( SC ) : factory to shelf 
HQ Industry HQ Customer
critical points:
.
- flow of information
.
- flow of goods .
- organization: people,
processes

 Investigation : study of shopper behaviour in case of Out of Shelf 

 Development and publication of an “application recommendation”

on OSA : done on 7th ECR days Germany 2006 
 GS1 – Germany : OSA – working group

Consumer reactions on out of Deutschland

stocks (carried out in
hypermarkets)
Buys a different brand 37 % 44 % 70 %
Buys same brand elsewhere 21 % 11 % 13 %
Returns later 17 % 11 % 0%
Buys a different size 16 % 17 %

Buys nothing 9% 14 % 17 %

4 billion € 1 billion €
loss loss
per year per year
 GS1 – Germany : OSA – working group

Next Steps :

-Run OSA Projects to gain practical expertise

-Integrate / investigate in new technologies, like RFID

-Involvement of additional business branches

-Investigate in : OSA & promotions

-Investigate in : OSA & seasonalities
-Investigate in : OSA & working capital

=> Program projected up to end 2008

OSA – working group : some root causes

Hand and
Body
Shelves
difficulty to
keep neat
OSA – working group : some root causes

Smaller
similar
packages
are getting
mixed
together
OSA – working group : some root causes

When spaces were

empty they became
dumping grounds
by consumers.
OSA – working group : some root causes

Shelf looks full

– 2 SKU’s are
missing
OSA – working group : some root causes

Back Store Organization

OSA – working group : some root causes
Why is OSA Important?

 Out of stocks can be a lost sale

for both manufacturer and
Customer
 It is the biggest reason for
Customer loyalty and brand
defections
 Once you lose a shopper, it’s
difficult to get them back
 All of our global strategic Customers have identified OSA as a
top priority
Unilever Approach
To On Shelf
Availability
Unilever : 5 Step Approach
Principles of the 5 Step Approach
• TPM focuses on continuous improvement by
empowering all employees
• Unilever has 15 years of experience with TPM
in factories in all regions
• TPM ensures sustainable solutions
• Unilever has used the TPM toolkit to develop
the OSA improvement programme

People Process
Discontinued lines left Review process / 5S - Tesco
on shelf
Rol l cages not sorted at
Better equipment planning - Tesco &
DC
Unilever
Communication of
Traini ng - Tesco and Unilever Working cages process Use OPL’s to hightlight - Tesco and
promotional ends
was not cl ear Unilever
Insufficient Recruitment - Tesco Stock rotation
merchandising personnel Review process - Tesco
difficult
Not aware of OOS Better staff training / Incentives
- Tesco Merchandising Review sales / shelf levels - Tesco and
Plan compliance Unilever
Product left on floor too Better training of staff
long activities - Tesco Loss One
Why is the product not on
the shelf w hen it is in the
Product horizontally store stock system and in
Redesign cabinets / 5S -
stacked in cabinets place the back of store ?
Tesco and Unilever
Poor Packaging Col our coding of packaging Ri ght space for Better shelf organisat ion / 5S
identification - Tesco right products - Tesco and Unil ever
Categori es split Better Category
Artwork difficult to Si mplify packaging labelling
across aisles Management organis ation -
differentiate - Unilever
Tesco and Unilever
Case sizes too bi g Review no. of units / work Planograms -
with Tescos for their Category M anagem ent /
linear not cube better pl anogram s - Tesco
requirements - Unilever
and Unilever
Too many overstocks Review no. of units / work
with Tescos for their Product too high to Redesign BOS, Revi ew
requi rements - Tesco and reach in
equipment used - Tesco
Unilever
Product Place
Strategic Alignment, agree definitions

Top to top meeting

Two times a year, OSA is on the agenda during
the top to top meeting between Retailer and Unilever

Steering group
Quarterly meeting with top management. Customer
Director, Supply Chain director Unilever & retailer

Project team
Monthly meeting with CD and SC project manager, Customer Relationship
manager to determine root cause and to take corrective actions

Key Success factors

• Commitment of Retailer and Unilever to improve On Shelf Availability
• Defining clear targets
• OSA is an integral project
• Focus of Unilever and the Retailer on the extended Supply Chain
• Willingness to share information and insights in all parts of the Supply
Chain and transactional processes

Agree definition
• Preferably, measurement of absolute out of stock (OOS) and nearly out of
stock (NOOS) = number of products is less than the number of facings
 Loss Tree
OOS
26 100.00%

On Hand NOT On Hand

12 45% 14 55%

Found in BoS NOT Found in BoS On Order NOT on Order

8 30% 4 15% 6 25% 8 30%

Why are they

not
Why was it not NOT in Depot ordered?
found? In Depot
4 16% 2 8%
Why is it not on
the shelf?
Discontinued
4 15%
Why is it not in Where is the
the Store? product?
Why are these
lines left on
shelf?
 Root Cause Analysis

People Process
Language barrier Better staff training / Product Inadequate replenishment Review process - Retailer
packaging produced with local procedure
language or product pictures- Equipment not available Better equipment planning - Retailer
Retailer And Unilever to offload
New personnel Training - Retailer and Unilever Product in receiving Shorten product leadtime - Retailer and
area but not in its bay Unilever
Insufficient Recruitment - Retailer Misleading label
merchandising personnel Training and label review process -
on shelf Retailer
Not aware of OOS Better staff training / Incentives Product Review minimum stock levels. Review
- Retailer just arrived ordering process. Shorten delivery lead
Merchandisers too busy Better planning of staff
Problem 1
time - Retailer and Unilever
activities - Retailer
Why is the product not on the
shelf when it is in the store
Product in wrong
stock system and in the back
Redesign BOH / 5S - Retailer
place and Unilever of store?
Product expired / Out of date FIFO / Ageing report to be Product in Better BOH organisation / 5S
implemented - Retailer wrong location - Retailer and Unilever
Wrongly labelled product Simplify packaging Product not Better BOH organisation -
labelling - Unilever visible in BOH Retailer and Unilever
Product not easy to identify Colour coding of packaging - Inadequate space Category Management /
Unilever on shelf better planograms - Retailer
Too many units in a Review no. of units / work and Unilever
Product too high to Redesign BOH, Review
case with retailers for their
reach in BOH equipment used - Retailer
requirements - Retailer and
Unilever
Product Place
 Implement Solution

 Establish Improvement Workshops to:

- Review information and status based around the loss

tree data
- Using the loss tree, categorise the losses
- Analyse each major loss and agree activities to solve
the problem
- Capture these activities on the action plan
Keep a record of actions and agree dates for completion
- Review the action list at the start of each workshop

Gene Toner : OSA Manager Europe

 ECR

( Efficient Consumer Response )

Unilever is engaged in GS1 workingparties, to collaborate with industry and trade partners

Electronic Data Interchange ( EDI ) 

Information with products ( EAN, EAN128 ) 

Masterdata Informationssystem ( SINFOS ) 

Continuous Replenishment Program ( CRP ) 

Collaborative Planning Forecasting Replenishment ( CPFR ) 

On Shelf Availability ( OSA ) 

Radio Frequency Identification ( RFID ) 

Shelf ready package ( SRP ) 

Chris Bull : Unilever Chief Customer Dev. Officer

end, thank You for listening
 ?
Questions