Scorecards are beginning to play a more prominent role in the industry's quest to implement efficient distribution practices that benefit retailers and wholesalers, as well as suppliers.
While scorecards are not new, the benchmarking tools are gaining in stature as the need to better understand trading partners' goals and capabilities becomes vital for making progress in a wide range of Efficient Consumer Response program initiatives.
The potential of scorecards for helping companies work together successfully is also expected to be underscored with the release this month of a series of "official" standardized scorecards developed as part of the Joint Industry ECR Project.
"The scorecard is a framework for a conversation you should be having with your important trading partners. If you are not having these conversations, and the scorecard forces you to, you can learn a great deal," said Tom Schaumberg, director of ECR logistics, Harris Teeter, Charlotte, N.C.
"Harris Teeter has used scorecards to determine where we fit within the industry on our ECR initiatives. They have helped us identify opportunities where we have common interests to take costs out of the supply chain and set priorities," he said.
Thus far, companies using scorecards have developed their own systems for charting areas of expertise, setting goals and exploring opportunities for action and improvement, both internally, and with specific trading partners.
But they also welcome the development of standardized tools to help streamline the scorecarding process and make it more accessible and effective in real-life business settings.
If the new set of scorecards enhances the ability of companies to work together in launching or improving key program initiatives, they could bring major benefits to the industry, distributors and suppliers told SN.
The official scorecards, covering key areas of ECR and designed for use by manufacturers, distributors, retailers and brokers, were developed by the Joint Industry ECR scorecard subcommittee, which included representatives from Supervalu, Minneapolis; Kroger Co., Cincinnati; and General Mills, Minneapolis, among others, and by Booz, Allen & Hamilton, Chicago.
Hy-Vee Food Stores, West Des Moines, Iowa, for example, has been using its own scorecards for two years, but is now going to switch to the new scorecards, said John Comer, vice president of purchasing.
"The one we established was more one-sided. We would sit down with suppliers and say 'Here's where we are at with you on inventory turns, use of electronic funds, use of UCS and UCS2.' Those are the types of hard facts you can dig out and track progress in," Comer said.
"With the new scorecards, though, we are more likely to find out that while we think we're great at something, our trading partner may not think we're there yet. We're going to use the cards to dig deeper into areas such as category management, efficient assortment, efficient introductions, efficient promotions and efficient replenishment.
"It sounds complicated and time consuming but we think the numbers will jump out and help make the relationship work better," he said.
Fleming Cos., Oklahoma City, is an early advocate and user of the new industry scorecards. The wholesaler initially tested a pilot version of the scorecard with Procter & Gamble, Cincinnati, in 1995, said Gary Capshaw, Fleming's vice president of logistics and co-chairman of the ECR Operating Committee.
Since then, it has expanded the program to seven more suppliers, including Lipton, Englewood Cliffs, N.J.; Campbell Soup Co., Camden, N.J.; General Mills; Nabisco Biscuit, East Hanover, N.J.; M&M/Mars, Hackettstown, N.J.; Pillsbury, Minneapolis, and Ralston Purina Co., St. Louis. The scorecarding tests at Fleming have focused primarily on the areas of efficient replenishment and other logistics initiatives, with the current suppliers chosen because they represent 40% of the wholesaler's sales in grocery, refrigerated and frozens -- and because some of them "approached us and wanted to do it," Capshaw said.
Meetings to explore launching scorecarding programs are now also set for the near future with J. Gerber & Co., New York; Hershey Foods U.S.A., Hershey, Pa.; Land O' Lakes, Arden Hills, Minn., and Nestle Food, Purchase, N.Y., he added. "Our intention is to score as many of our suppliers as we can and we're developing a chart where we can show everyone how they stack up. We're not going to tell one company specifically what someone else is doing, but we'll say in a general way what similar competitors are doing," Capshaw said.
"The greatest thing this provides is an agenda of actionable items for a meeting. Before, we spend most of the time in meetings talking about obvious problems based on calls to the divisions the day before. It's wasn't a structured problem-solving session. Now we really have an agenda of things to go with," he said.
Craig MacDonald, director of national accounts team at Lipton, said its scorecarding program on efficient replenishment with Fleming resulted in identifying and increasing the number of business opportunities they wanted to move forward with and setting timetables and dates for doing so.
"I got two pages of things that came out of our session that we are going to be working toward over the next year," MacDonald said.
Harris Teeter's Schaumburg said that scorecards have facilitated conversations between trading partners and allowed practitioners to focus on the work through database decision making rather than instinct.
Other retailers also said they make use of internally developed scorecards to help in enhancing program effectiveness with trading partners.
Wegmans Food Markets, Rochester, N.Y., for example, has used in-house developed scorecards for category management and other ECR-related areas such as CRP, said Mike Bargmann, the chain's director of distribution. "We weigh those areas with each vendor within a category such as soap or paper. When a vendor visits with category managers, the scorecards are reviewed for future opportunities," he said.
With regard to the industry standardized scorecards, Bargmann stressed that "whatever ends up being adopted by the industry, it's got to be simple enough so it doesn't create fear. When I saw the size of the industry scorecard, I was fearful of the administration time."
But Fleming's Capshaw said the first scorecard session he conducted, on efficient replenishment, took three to four hours. The second session just two hours. "This isn't as big a deal as it looks going in, in terms of the time it takes to do it," Capshaw said. "The first time it took about twice as long as the second time."
Hy-Vee's Comer said he is looking forward to using the industry scorecards across the board."In six months, we'll have a whole lot of perspective."