Executive Update

The Impact of Sales and Procurement on Reverse Logistics Management

David Lambert, CPG practic lead of Wipro Technologies detailed the findings of a 2010 GMA/FMI Joint Industry Unsaleables Leadership Team (JIULT) project, that included retailer and manufacturer surveys and interviews intended to identify improvement areas for sales and procurement opportunities in the food and beverage industry.

The results of the project were based on four phases: data collection, validation, analysis and findings. The main focus, data collection and validation were comprised of a 28 question survey distributed to 48 retail and manufacturer companies, followed by interviews conducted evenly to both retailer and manufacturer subject matter experts.

The findings showed that although the average unsaleables rate has held relatively steady for the past seven years, damaged goods were reduced, and out-of-date and discontinued product rates were up.

One of the challenges found with both the retailer and manufacturer interviews was the lack of cross collaboration for product planning and exit strategies.  “Companies have the new product side down,” said Lambert. “But the number of products that actually succeed is very low. It’s about 11%. The chances that a new product will make it, is very slim.”

The project also focused on the lack of incentives in the industry to reduce unsaleables. Lambert explained that “people aren’t going to charge after what they’re not getting measured against. “