Heinz’ Gene Schachte Says Forging “Greater Partnerships” will be Key to Reducing Unsaleables

Gene Schachte, a 16-year veteran of the CPG industry from HJ Heinz, will step up as the new co-chairman of the Joint Industry Unsaleables Leadership Team (JIULT). Schachte, senior manager, reverse logistics, has spent the last five years managing the unsaleables issue for Heinz and four years serving on the JIULT. Heinz was a recipient of the GMA/FMI 2006 Unsaleables Innovation Award, which recognizes companies who work across industry to reduce the incidences of unsaleables.

“We’d like to take the good work accomplished under the committee’s former leadership and seek more industry buy-in on the joint industry recommendations for reducing unsaleables,” said Schachte, who served as the 2007 Unsaleables Conference Co-Chair. “Secondly, we want to focus on what we can do as an industry to really reduce the cost of unsaleables by forging greater partnerships, rather than looking for ways to reallocate how we pay for product.”

Schachte said that while the industry hasn’t seen major reductions in the industry’s unsaleables volume yet, better practices are in place among manufacturers, retailers and wholesalers in the areas of shipping practices, handling and packaging design. “But there is a lot of opportunity out there to do better in key areas, including how we handle recalls and product withdrawals,” said Schachte. “The number one way to reduce unsaleables is to understand root causes. And the best way to get to that point is through greater industry-wide collaboration on applying unsaleables recommendations and understanding key drivers behind the issue.”

Insights from Customer/Channel Management Study to be Explored at GMA Executive Conference

Results from a comprehensive survey of customer and channel management strategies will be covered in-depth during a Strategic Issues session at the upcoming GMA Executive Conference in June at The Greenbrier. The Customer and Channel Management (CCM) Survey, led by the GMA Sales Committee and McKinsey & Company, takes a data-driven approach to link company practices in the areas of pricing, trade spend, in-store execution and sales organization activities to in-market results. “This year’s study has garnered unprecedented breadth and depth of participation, with a record number of companies participating this year,” said Brian Lynch, director, sales &sales promotion/industry affairs at GMA. “We anticipate the Executive Conference session to bring forth some unique insights into how leading companies are leveraging successful customer management practices to win in the rapidly evolving multi-channel marketplace.”

Procter & Gamble’s Don King, Joint Industry Coupon Committee (JICC) co-chair, presented on the industry’s transition to the GS1 DataBar for coupons to a group of manufacturers and retailers at the second annual Coupon Information Corporation (CIC) Industry Summit last month in Washington, DC. “The JICC leadership continues to play an important role in helping the industry adopt this improved bar coding system for coupons,” said GMA’s staff liaison to the JICC, Troy Beeler. King and JICC co-chair Alan Williams of Ahold will be at the Association of Coupon Professionals’ annual conference on April 30 to discuss progress on the transition to the GS1 Databar and next steps to ensuring a smooth industry-wide adoption. The North American Coupon Application Guideline Using GS1 DataBar (RSS) Expanded Symbols can be accessed by GMA members on gmaonline.org. Manufacturers and retailers interested in becoming involved with the JICC can contact GMA’s Troy Beeler at tbeeler@gmabrands.com.

GMA’s Industry Development Team (IDT) met for the first time last week under the new leadership of Joe Bivona, vice president for customer development, Time Warner Retail Sales and Marketing. The meeting agenda included future roles of the IDT and a discussion with GMA President and CEO Cal Dooley on industry activities. GCI’s “Global and North American New Ways of Working Together” group also shared details on the new framework, which is designed to show trading partners areas to focus on while they strive to jointly grow their businesses.

Working with GMA staff, the IDT will leverage its expertise to assist in the development of the association’s conference programs and the leadership of key industry issues. "The IDT brings a great amount of industry knowledge to GMA both with our work internally at our individual companies and our leadership roles within other associations" said Bivona, who has 32 years of experience with the CPG industry, including 20 years at Time Warner leading customer development and sales functions. Prior to joining Time Warner, he held senior positions at the Coca-Cola Company and Mobil Oil. Bivona is the Chairman of the Global Marketing Development Center Education Leadership Council; sub-chair of the Food Marketing Institution Meeting Committee; and a member of the National Association of Drug Stores Education Committee.

CPG manufacturers are using cost-cutting measures and increasing efficiencies to compensate for rising fuel and commodity prices and to prevent overall logistics costs from growing, according to a recent IBM study conducted for GMA. The ratio of IT spending to net sales in the CPG industry remained relatively flat between 2006 and 2007, growing just .05 percent, according to the survey, which assessed IT investments among CPG companies. “The fact that IT and logistics costs as a percentage of sales have remained relatively flat in recent years demonstrates the commitment of our member companies to keeping costs down in a challenging economic climate,” said Stephen Sibert, senior vice president for industry affairs at GMA. “Any time consumer products makers can minimize costs, it’s a good thing for consumers.”

Top line findings of the GMA 2008 Logistics Benchmark Report and the GMA Information Technology Investment and Effectiveness Report – conducted by IBM and AMR Research for GMA – were previewed for attendees of GMA’s annual IS/LD Conference earlier this month.

Following the release of both reports in late May, GMA and its research partners will be hosting webinars to provide members with an in-depth look at the surveys’ findings. IBM’s Paul Huppertz, partner, logistics strategy, process improvement and technology, will facilitate a webinar on the 2008 Logistics Benchmark Report on June 5 at 1:00 PM. Guy Blissett, Institute for Business Value, consumer products lead, IBM Global Business Services, and Lora Cecere, research director, consumer packaged goods, AMR Research, Inc. will present findings of the 2008 GMA Information Technology Investment and Effectiveness report on June 19 at 1:00 PM.

Members may sign up for either webinar by contacting Alexis Larkin at alarkin@gmaonline.org; please include name, phone number and e-mail address. Details for the webinars will be sent to registered participants the week prior. The webinar will also be available for download after the presentation on GMA’s webpage.

IS/LD 2008: New Insights on Sustainability, Collaboration Drive High Participation

The largest-ever gathering of industry leaders attended GMA’s Information Systems/Logistics Distribution Conference (IS/LD) earlier this month to hear new insights on issues including sustainability and the emerging use of nanotechnology. The 380+ participants in the 14^th annual IS/LD Conference, held in Rancho Mirage, CA, also heard presentations on creating supply chain growth from Giant Eagle and General Mills; a look at Kimberly-Clark’s use of virtual reality for store; results of GMA’s logistics benchmarking and information technology investment surveys; and an update on the New Ways of Working Together working group. This year’s IS/LD Conference marked the third year GMA has partnered with FMI’s Supply Chain Conference to bring together supply chain, logistics and information systems professionals from both the supplier and retailer side.

GMA Puts More Resources toward Industry Financial Performance as Economy Slows

With the economic downturn impacting food prices and consumer buying patterns, GMA is taking a close look at the financial health of the CPG industry. Brooke Weizmann, senior manager, industry financial performance, said GMA will be a key resource for members in three areas: understanding consumer buying habits; analyzing industry financial performance; and educating members in the areas of technology, logistics and sales to drive greater dialogue and innovation. “While total US demand for food typically remains stable regardless of fiscal patterns, we are seeing changes in what they spend money on at the store level,” said Weizmann. “GMA is looking very closely at the changing economy and how we can be a resource of new information, analysis and education on ways to sustain profitability and growth during good and bad economic times.”

Later this spring, the new GMA Financial Share Group will meet to consider trends and make recommendations for best practices to address timely financial issues, including rising commodities and importation costs, regulatory changes in tax and financial reporting, benchmarking executive compensation and Wall-Street analysis of the industry’s financial performance.

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