Executive Update

Reverse Supply Chain Improvement Project: Retailer and Manufacturer Discontinued Products

During this session, members of the Reverse Supply Chain Improvement Project presented case study examples that have reduced the number of discontinued products sent to reclamation centers.

For both retailer and manufacturer panel participants, there were similar process elements for each type of discontinuation - developing a plan for the launch of the product as well as an exit strategy; communication with your trading partner; and providing greater transparency in the decision process on both sides of the partnership.

 “In 2010 there were 40,000 new CPG products introduced in the marketplace, but the number of products succeeding is very low,” explained Thomas Breiten, supply chain leader at Energizer Holdings, Inc. “There’s a launch and there needs to be an exit strategy out of products that we think are going to be discontinued. These efforts are interchangeable; it doesn’t matter if it’s retail or manufacturer-based.“

Stephan Henig,  vice president of corporate merchandising at Wakefern Food Corporation explained their unique way of communicating recalls to their trading partners. “Once we’ve decided to discontinue an item, it’s very important to communicate with our trading partners to come up with a strategy to remove the product. Using color tags specifically designated for recalls only, rather than using communications such as email, has been very effective.”

“Open and continuous dialogue with your trading partners is necessary,” added Carmen Chavez region manager of corporate customer supply chain at The Clorox Company. “You must set up specific action steps that are reviewed by both partners, and you must have a level of trust in your trading partner that removing the discontinued product will be executed efficiently.”

Chavez, Henig and Breiten were joined on the panel by Thomas Conoscenti, executive vice president, DRS Product Returns, Oscar Fussenegger, corporate reclamation manager, The Kroger Co. and Joseph Scaccia, director of operations and strategy, Kraft Foods.