ECR REPORT EXAMINES VALUE CHAIN ANALYSIS

LISA A. TIBBITTS

NEW YORK -- Members of the Joint Industry Project on Efficient Consumer Response met here last week to unveil the published version of its first major benchmark report, "Applying Value Chain Analysis to the Grocery Industry," and walk through its major findings.

"The potential is out there to wring $24 billion out of the system," said committee co-chairman Paul Gannon, vice president of information technology services for Shaw's Supermarkets, East Bridgewater, Mass. "What the value-chain analysis allows us to do is identify by each of the trading partners how to achieve those savings."

Preliminary copies of the Value Chain Analysis report have been in limited circulation since it was unveiled at the Grocery Manufacturers of America Executive Conference in June. The latest informational session, presented by the ECR Performance Measures Operating Committee, drilled down into five main segments of the distribution chain: manufacturers, brokers, wholesalers, self-distributing retailers and direct store deliveries.

Co-chairman John Haedicke, vice president of activity-based management for Kraft General Foods, Northfield, Ill., said the report seeks to provide a basis for communication among industry members, who can foster consensus on the industry's activities and needs. He stressed that the report covered practical, not theoretical, concepts.

"This lays the groundwork for everything that is to follow. How can you do continuous replenishment before you agree what the steps are, who does what and how to measure it, and who's going to win and who's going to lose? That has to be identified up front," he said.

A battery of panelists each spotlighted various trouble spots and opportunities the report identifies for each link in the distribution chain.