GCI Standard Presentation May 10 2003 Name der

GCI Standard Presentation May 10, 2003 Name der Präsentation · Page 1

Contents What is GCI all about What GCI does Who GCI is The challenge Potential benefits GCI’s role Achievements so far Priorities Projects GCI Standard Presentation · Page 2

What is GCI about? In brief – working together Global business processes In six words – improving business and creating consumer value GCI Standard Presentation · Page 3

What does GCI do? We link the value chains for consumer goods worldwide We initiate and manage collaborative projects We define best processes for industry We promote the implementation of global standards. . . and spread the word GCI Standard Presentation · Page 4

So it’s about standards? Yes, but … We’re NOT a standards body We work with EAN International To advise on the business needs that new standards must address And promote standards and their implementation GCI Standard Presentation · Page 5

Who is GCI? A unique platform for manufacturer and retailer collaboration Launched in 1999 Representing the interests of one million companies large and small through: International standards bodies Trade / industry associations National / regional ECR initiatives GCI Standard Presentation · Page 6

The Challenge Improving global trade Fuelled by powerful IT and communications Easy movement of products But barriers are still in place! De facto national standards New technologies need common specifications (What shape is your plug? ) GCI Standard Presentation · Page 7

The Scale of Opportunity EAN International alone support 141 countries nearly 1 million member companies 5 billion scanning transactions per day Integrating processes (horizontal and vertical) is complex GCI Standard Presentation · Page 8

Why now? We have a unique opportunity to implement voluntary global standards and apply best practices consistently. . . And to eliminate the need for incompatible proprietary standards and processes But we have to move quickly and get it right Getting it wrong now will inhibit business and damage consumer value GCI Standard Presentation · Page 9

The Potential Benefits Consumers benefit from better business processes Efficiencies of scale and lower process costs through wider system-to-system interaction End-to-end process automation accelerates logistics and helps optimise stock management Lower process costs through reduced errors. . . GCI Standard Presentation · Page 10

. . . more Benefits Fundamental system compatibility reduces investment and operational risks Common processes streamline management tasks across enterprises and functions at every level This is not just about cost. It is also about better quality and freshness, better availability and assortment, and sustainable ways of working GCI Standard Presentation · Page 11

Why Business is backing it “If GCI had been invented at the beginning of the [last] century we would all be driving on the right hand side of the road now. ” (Luc Vandevelde, Marks & Spencer ) GCI Standard Presentation · Page 12

The GCI Structure Co-Chairs Zygmunt Mierdorf, Member Management Board, Metro AG as Acting Co-Chair Antony Burgmans, Chairman, Unilever Vice Co-Chairs Peter Jordan, Director IS Strategic Projects, Kraft Foods International Zygmunt Mierdorf, Member Management Board, Metro AG GCI Standard Presentation · Page 13

Executive Board: Retailers GCI Standard Presentation · Page 14

Executive Board: Manufacturers GCI Standard Presentation · Page 15

GCI Sponsors GCI Standard Presentation · Page 16

GCI Scope Definition of Global Business Needs Input for Global Standards (EAN • UCC GSMP) Development of Global Business Practices Definition of Implementation Guidelines for Global Standards and Business Processes / Practices GCI Standard Presentation · Page 17

GCI Agreed Roles Identify business needs for global standards Co-ordinate and channel user input to standards development Support standards implementation through guidelines, etc. Develop and pilot best business processes Endorse voluntary standards and encourage best practice adoption GCI Standard Presentation · Page 18

How GCI works GCI Executive Board Antony Burgmans Global Steering Group Peter Jordan/Zygmunt Mierdorf Intelligent Tagging GDS Implement. Team Global Scorecard Direct Store Delivery CPFR Pat Rizzotto Dr. Gerd Wolfram Nigel Bagley Jeremy Hollows Jim Flannery Martin White Steve Benson Ann Dozier Jim Mc. Laughlin Rita Marzian Service Providers / Exchanges Marketing & Communication GCI Network Ron Griffin Jeremy Hollows Friso Coppes Robert Wilkinson Jim Flannery Enrico Toja GCI Standard Presentation · Page 19

How do GCI and EAN Int. work together? Business Process Defined Standard Required? YES To GSMP Steering group To BRG (1) Business Process Developed Process & Standard Deployed Process & Standard Implemented GCI Standard Presentation · Page 20 Hard Easy NO Difficulty of task To “extended” BRG (2) Standard Developed Global Standards Management Process (GSMP) GCI Project Established

GCI – Milestones since 1999 GCI Compliance Scorecard I Best Practice Implementation Best Practice Development Global Scorecard Global CPFR 1 Global Data Synchronisation Report 2 Standards Implementation GCI Internet Protocol EAN. UCC XML Standards Development October 1999 GCI Foundation March 2000 July 2000 GCI Standard Presentation · Page 21 July 2001 Import-Export XML Extensions October 2001 2002

GCI – Milestones in 2002/2003 GCI Compliance Scorecard II Best Practice Implementation Best Practice Development Standards Implementation EAN • UCC GSMP Standards Development Global Data Synchronisation Report 3 Aligning to Global Standards and Best Practices Global CPFR 2 GTIN Management Guideline The Case for Global Standards (Report) Global Data Dictionary (GCI) August 2002 Global Product Classification Implementation Global Registry Requirements April 2002 Global Data Synchronisation Implementation GCI Standard Presentation · Page 22 October 2002 2003

What GCI has done so far Global Trade Item Number (GTIN) Management Guideline Aligning changes in product, formulation, packaging and promotion with changes in the GTIN Global Data Dictionary Common source of data elements and their structure for item description, message development and as reference for the Global Product Classification GCI Standard Presentation · Page 23

What GCI has done so far Global Product Classification For key trading segments Global Data Synchronisation Three reports covering the vision and recommendations for a GDS Network “The Case for Global Standards” Intelligent Tagging Description of business applications for RFID GCI Standard Presentation · Page 24

What GCI has done so far Global Commerce Internet Protocol Implementation Guidelines and pilot trials for key trading processes in XML CPFR® Two reports describing the global process on CPFR® The GCI Global Scorecard A capability assessment tool with three levels of scorecards GCI Standard Presentation · Page 25

Current Priorities Global Data Synchronisation Implementation Team Taking the leadership in world wide GDS Implementation Global Product Classification Implementation Realising the vision of one EAN • UCC Standard for Product Description Direct Store Delivery Creating a business model for Direct Store Delivery GCI Standard Presentation · Page 26

Current Priorities GCI Intelligent Tagging Model Description of business applications for Radio Frequency Identification and possible pilot trials CPFR® Description of a global process model for CPFR® Global Scorecard Application of three tools to measure collaborative capability at entry, intermediate and full levels GCI Standard Presentation · Page 27

GCI projects Name der Präsentation · Page 28

Intelligent Tagging Name der Präsentation · Page 29

The Idea A cheap microchip + A tiny radio transmitter = Radio Frequency ID (RFID) GCI Standard Presentation · Page 30

The Idea in Practice “A next-generation bar code” A tag cheap enough to attach to all products and pallets Capable of carrying enough ID data for valueadded applications (via user systems) Communicating wirelessly (without physical contact) within built environments GCI Standard Presentation · Page 31

Challenges Lack of worldwide data standards Country-specific regulations Tag and reader incompatibility Tag and data overload Tag costs GCI Standard Presentation · Page 32

The Goal A worldwide RFID standard Pre-empting the proliferation of proprietary standards Bringing forward the huge potential benefits of the technology GCI Standard Presentation · Page 33

The Potential For retailers Faster checkouts, improved security, demand tracking, automated restocking (medium term) For consumers Improved product freshness Smart products that interact with home network technology (long term) GCI Standard Presentation · Page 34

The Potential For manufacturers/logistics Improved product tracking through transit Reduced Shrinkage For retailers and manufacturers Opportunities to add value when home information systems interact with the product (long term) GCI Standard Presentation · Page 35

The Potential Benefits Eliminate line of sight The „new network“ extends the use of the internet Address serialisation of products GCI Standard Presentation · Page 36

GCI needs you To investigate relevant existing field trial applications For the establishment of a “How to get started” checklist To publish a “RFID Implementation Guide” For the Marketing and Communication of GCI recommendations GCI Standard Presentation · Page 37

Direct Store Delivery Name der Präsentation · Page 38

What GCI wants Main focus Development of a process model for Direct Store Delivery Deliverables (build upon existing recommendations) Customer Creation and Maintenance Item and Base-Price Data Alignment Promotional Price Data Synchronisation GCI Standard Presentation · Page 39

Collaborative Planning Forecasting and Replenishment (CPFR®) Name der Präsentation · Page 40

Transforming Inventory Low inventory levels at retail outlets remain fundamentally desirable but … Non-availability of stock when demand surges will normally result in lost sales Demand fluctuations are inherently predictable when trading partners exchange the right data GCI Standard Presentation · Page 41

The right data? Manufacturer data on planned promotions, commodity shortages, etc. Retailer data on other factors (other promotions, influence of external events, etc. ) Store level data on local trends, replenishment cycles, etc. GCI Standard Presentation · Page 42

The Concept Traditionally we have had no means of pulling this data together for effective planning CPFR® requires a culture that supports trust and collaboration the relevant data is available the means to exchange the information is present GCI Standard Presentation · Page 43

The Fundamentals in Practice Well defined collaborative process A joint demand forecast, shared along the supply chain Shared processes for exception management predefined exception criteria predefined resolution paths GCI Standard Presentation · Page 44

Working with CPFR® Collaboration Daily exchange of information Order proposals Knowledge sharing GCI Standard Presentation · Page 45

Working with CPFR® Planning and Synchronisation Jointly determined schedule for product availability and shipment Synchronised product information to speed time to market Forecasting Exchange of promotional expectations Combining system order proposals and other relevant data GCI Standard Presentation · Page 46

Working with CPFR® Replenishment Improved monitoring of store assortment Out of shelf information Order status tracking Service level monitoring Improved order accuracy GCI Standard Presentation · Page 47

The Benefits Improved sales and customer loyalty through reduced “out of stock” incidents Tighter inventory management Improved lead times Improved mutual understanding across supply chain Richer (shared) data on consumer behaviour GCI Standard Presentation · Page 48

Implementing CPFR® Change requirements Step by step approach Management involvement at all levels for effective system specification Process enhancement (improved order accuracy, collaborative planning sessions, etc. ) Effective design and training for user acceptance GCI Standard Presentation · Page 49

GCI Role Co-ordinate pilot studies to demonstrate proof of concept and establish best practice Recommend a worldwide CPFR® process and data standard As CPFR® becomes standard practice in FMCG we need to ensure that it supports the development of frictionless global supply chains GCI Standard Presentation · Page 50

Global Scorecard Name der Präsentation · Page 51

The Concept If we think collaboration is important, shouldn’t we be benchmarking it? With multiple ECR scorecards already in place, wouldn’t a single global scorecard make life easier? GCI Standard Presentation · Page 52

The Benefits Create a tool that helps businesses Understand performance Compare results meaningfully Establish developmental priorities Benchmark internal performance Benchmark collaboration through the supply chain GCI Standard Presentation · Page 53

www. globalscorecard. net GCI Standard Presentation · Page 54

GCI´s offer to you Three Scorecard levels developed Entry level Used mainly by smaller manufacturers but also retailers with wide supplier base Intermediate level Next stage integration for businesses with tighter supply chain relationships Full (including the GCI Compliance Scorecard and the KPIs) Used as internal capability development and benchmarking tool by large manufacturing companies GCI Standard Presentation · Page 55

The KPI´s (examples) Have you optimised transport and storage for cost-effectiveness? Are your information flows synchronised and right first time? Are all items being delivered as ordered? Is your business achieving its desired category share? GCI Standard Presentation · Page 56

Global Product Classification Name der Präsentation · Page 57

Why addressing this topic at all Sellers need flexibility to profile products in multiple views and align to internal classifications without compromising own systems Buyers need to align products to multiple internal classifications GCI Standard Presentation · Page 58

The Objective Establishing a set of international classification rules to govern a classification scheme Common entry level A solution which is Global Compatible Flexible Agreed by all parties GCI Standard Presentation · Page 59

Description A methodology to group products into blocks (= bricks) to support the identified business processes Consists of attributes and values associated to product bricks GCI Standard Presentation · Page 60

The Principles Level 4 (Segment) Level 3 (Family) Level 2 (Class) Level 1 (Brick) GCI Standard Presentation · Page 61 Key to the Classification Hierarchy is the definition of the lowest level named Bricks Every Product needs to be assigned to a Primary Brick The Brick represents the connection point with the internal/local classification

Brick Examples WINE, SPARKLING WINE, STILL WINE, FORTIFIED & NATURAL GCI Standard Presentation · Page 62 Bricks + Definitions

Attribute Examples Attribute 1 QUALITY WINE, SPARKLING Attribute 2 COLOUR WINE, STILL Attribute 3 GRAPE Attribute 4 WINE, FORTIFIED & NATURAL COUNTRY Attribute 5 REGION GCI Standard Presentation · Page 63 Attributes + Definitions

Value Examples Attribute 1 QUALITY WINE, SPARKLING Attribute 2 COLOUR WINE, STILL Attribute 3 GRAPE Attribute 4 WINE, FORTIFIED & NATURAL COUNTRY Attribute 5 REGION GCI Standard Presentation · Page 64 Values Red White Rosé Values Cabernet Merlot Zinfandel Values

How is this done? EAN International is the owner of the Global Product Classification But: Outsourcing to a service provider (ACNielsen) of management maintenance and distribution GCI Standard Presentation · Page 65

The Benefits Having a standardised and consistently implemented classification enables Global search Global reference Global category analysis Streamline of retail buying programs Global Data Synchronisation GCI Standard Presentation · Page 66

Implementation We need your commitment to move from theory to practice Integration within your organisation Creating interfaces between your systems and the Global Product Classification GCI Standard Presentation · Page 67

Implementation of Global Data Synchronisation (GDS) Name der Präsentation · Page 68

Current Status GCI GDS model approved and handed over to EAN • UCC as statement of requirements EAN • UCC is developing the standard based on the input of GCI (EAN • UCC Item Sync Standard plus related messages - available by 2 nd quarter of 2003) GCI as a joint industry effort is co-ordinating the piloting of the model and encouraging commitment from manufacturers and retailers as well as Service / Solution Providers and Data Pools GCI Standard Presentation · Page 69

The Ambition To create the fundamental infrastructure for a seamless flow of goods through the supply chain (across borders) Seamless? Ensuring all supply chain partners use common product descriptions and classification Establishing an effective mechanism for consistency GCI Standard Presentation · Page 70

It ´s all about Implementation GCI Standard Presentation · Page 71

GDS today Across the industry 30 per cent of transactions contain inaccurate data Proprietary or inaccurate item descriptions delay efficient data exchange = cost $30 billion lost per annum (3. 4 per cent of sales) through supply chain inefficiency GCI Standard Presentation · Page 72

The Opportunity Medium term savings of 1 -3 per cent for manufacturers and retailers* Bottom line improvement 10 -15 per cent Positive revenue impact from improved availability etc * „The Case for Global Standards: Creating the Business Case for Global Data Synchronisation in Your Company“, GCI and Cap Gemini Ernst & Young, October 2002 GCI Standard Presentation · Page 73

Building Blocks A single global standard for data synchronisation Consistent adoption of global standards Global Data Dictionary Global Product Classification GTIN & GLN Certified data pools Global Registry GCI Standard Presentation · Page 74

Where to start? GCI Standard Presentation · Page 75

The Global Network Vision Global Data Synchronisation Network (GDSN) Single Point of Entry to the Network Global Registry Final Data Recipient_1 Data Source_1 Data Pool Exchange Data Pool Data Source_2 Final Data Recipient_2 Data Pool Exchange GCI Standard Presentation · Page 76

The Global Network Reality GCI Standard Presentation · Page 77

Why now? Growth of cross regional trading demands a global language New technologies (XML, etc. ) have created the opportunity for synchronisation If we don’t move quickly to a worldwide standard ad-hoc solutions will confuse the picture The Case is compelling, all elements to decide are available, the time to act is Now! GCI Standard Presentation · Page 78

The Impact Get it right now and we can transform Logistics Order management Catalogue management Category management Long term it’s a powerful platform for advanced initiatives (CPFR®, etc. ) GCI Standard Presentation · Page 79

What you can do Commit to support the model Challenge your business partners to support the model Decide about your timing Participate in early implementation and ongoing development Adoption rate is crucial! GCI Standard Presentation · Page 80

What you can do Analyse your own company status (e. g. with the help of the GCI Compliance Scorecard) Set up your business case Start planning your implementation program Set up some pilots Start educating your people GCI Standard Presentation · Page 81

What you can do Ensure “GCI compliance“ for every new application Improve your data integrity Verify your product and customer data / info exchange policy Plan integration of Global Data Dictionary / Global Product Classification in your systems Map your CPFR® and Exchanges use plans GCI Standard Presentation · Page 82

GCI helps you The GCI Website contains every input you need to make your GDS vision come true GCI together with Cap Gemini Ernst & Young has created the business case for GDS in your company (under Press Information) GCI GDS Roadmap to Implementation (under GCI GDS Implementation Team) GCI Standard Presentation · Page 83

GCI helps you The GCI Website contains every input you need to make your GDS vision come true GCI-GDS Reports 1 to 3 (under GCI GDS Implementation Team) EAN • UCC Standard for Item Model and Item Sync - without messages (under GCI GDS Implementation Team) GCI Standard Presentation · Page 84

We can start now All elements required for the journey are identified PLANET SYNCHRO GCI Standard Presentation · Page 85

The GCI Platform Name der Präsentation · Page 86

Connecting people Facilitate a better cooperation of GCI Companies, GCI Sponsoring Organisations, with Service and Solution Providers and Exchanges to evaluate implementation strategies for EAN • UCC Standards and Best Practices to help implement them Letting the world know what GCI is for and doing GCI Standard Presentation · Page 87

GCI Guideline Aligning to Global Standards and Best Practices GCI Standard Presentation · Page 88

GCI Networking GCI Implementation Network Service Providers and Exchanges Marketing & Communication GCI Standard Presentation · Page 89

GCI Marketing-Toolkit GCI Brochure GCI Standard Presentation GCI Newsletters GCI Updates GCI Specials GCI Press Releases GCI Website GCI Standard Presentation · Page 90

Thank you www. globalcommerceinitiative. org Name der Präsentation · Page 91