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CIES SUPPLY CHAIN MANAGEMENT

MAASTRICHT, Netherlands (FNS) -- The arrival of Wal-Mart in the United Kingdom and Germany was a major topic of discussion among the speakers and delegates at the conference on Supply Chain Management: A Vital Element in Category Management, organized here by CIES: The Food Retailing Forum.Speakers acknowledged that Wal-Mart's category management systems are the best in the world and that European

MAASTRICHT, Netherlands (FNS) -- The arrival of Wal-Mart in the United Kingdom and Germany was a major topic of discussion among the speakers and delegates at the conference on Supply Chain Management: A Vital Element in Category Management, organized here by CIES: The Food Retailing Forum.

Speakers acknowledged that Wal-Mart's category management systems are the best in the world and that European food retailers will have to improve their own if they are to compete effectively against the U.S. retailer.

But the speakers stressed that Wal-Mart doesn't have an open field. Such European retailers as Ahold N.V. of Zaandam, Netherlands, and Tesco plc of Cheshunt, England, are among the best in the world and have a good chance at beating Wal-Mart at its own game. In addition, differences in Europe in terms of logistics and information systems may place hurdles in the way of Wal-Mart's European expansion, several speakers pointed out.

"All the data Wal-Mart collects in the U.S. actually might be a disadvantage for it in Europe," said Dick Bell, senior research associate at Templeton College at Oxford University. "Wal-Mart is used to transparency of information in the U.S., but that's not the case in Europe. It's going to have to find different ways to achieve in Europe what it's achieved in the U.S. I think they will be handicapped in Europe by the inavailability of data."

Speakers at the conference outlined ways European retailers can compete against Wal-Mart, with the main emphasis on more collaboration between retailers and suppliers and a greater sharing of data on customers and their preferences. Han Willemse, senior vice president of logistics at Albert Heijn, said the company has completely revised its strategy over the last decade to focus on volume growth, simpler internal processes and systems with such things as paperless ordering and lower inventories, and greater differentiation between Albert Heijn and its competitors.

For example, Albert Heijn has aimed to increase its sales of fish to its customers, and so has worked with fish suppliers on new fresh and packaged products; increased deliveries, to the point where Heijn's fish warehouse can now receive deliveries up to 16 times a week.

Delhaize of Belgium has adopted a similar approach in the wine category, according to Stefaan Wauters, market manager for wine at Delhaize

But European food retailers face unique problems in logistics and in increasing their cooperation with their key suppliers, speakers warned. One is that many European food retailers, such as ICA of Sweeden and Kesko of Finland, are cooperatives or associations, Bell said.

This makes integrating their supply chains difficult because most of the individual stores jealously guard their independence.

Timo Lehtinen, logistics director for foodstuffs at Kesko, outlined successful category management and Efficient Consumer Response projects the cooperative had undertaken with such suppliers as Unilever, Procter & Gamble, Melia flours and cereals, and Libero diapers. But he admitted that not every project was a success.

"There are still failures even if the numbers look good," he said. "It could be we over-estimated our partner or it didn't know what ECR truly means. To succeed, we need more cross-functional operations within the company and then with our suppliers."

TAGS: Walmart