CHEP Research for the FMI-GMA Trading Partner Alliance Reveals Top Strategies for Reducing $15 Billion in Unsaleable Consumer Goods

Online Educational Platform Will Target Broad Adoption of Best Practices & Cost Savings

CHEP’s Ben Eugrin

New research conducted by CHEP was recently presented to food retail and consumer packaged goods industry executives at the Food Marketing Institute (FMI) – Grocery Manufacturers Association (GMA) Trading Partner Alliance (TPA) Supply Chain Conference in San Diego. It evaluated and compared the effectiveness of 48 strategies manufacturers and retailers use to reduce unsaleable goods and generate cost savings.  Each of the 48 solutions was ranked in order of effectiveness, and three of the most effective solutions were highlighted during today’s presentation.

“Unsaleable goods is a $15 billion issue for our industry, and a reduction of just one percent would save companies $150 million annually,” said Daniel Triot, Senior Director, TPA. “By promoting broader adoption of the best practices CHEP has discovered, we can meet and exceed that goal.”

The data, based on in-depth interviews with retailer and manufacturer supply chain experts, uncovered proven unsaleables reduction best practices across multiple supply chain functions, including, warehousing, shipping and receiving, sales, merchandising and reverse logistics. Each solution was ranked on a four-point effectiveness scale. Participants identified Enhanced Shelf Life Management, Effective Management of Discontinued Items and Sharing of UPC-Level Data as among the most effective solutions.

CHEP’s Ben Eugrin, Director of Supply Chain Solutions, and Mike Boersig, Manager, Supply Chain Solutions, presented the findings together with Rob Shifter, Nestlé Supply Chain Manager; Greg Riggs, SpartanNash Senior Supply Chain Analyst; and Ted Lechner, H-E-B Senior Reverse Logistics Leader.

“Our research uncovered clear patterns for reducing unsaleable goods,” said Mr. Eugrin. “We now know how retailers, manufacturers, and suppliers, working together, can generate significant cost-savings that positively impacts their bottom line.”

CHEP was selected by the TPA’s Joint Industry Unsaleables Leadership Team as its expert partner for its unsaleables reduction initiative in February. The project will culminate in the development and launch of a TPA online unsaleables reduction educational platform, expected in the Fall of 2017. The educational platform will contain detailed information and tools to help trading partners review their supply chains and identify and implement effective unsaleables reduction strategies.

“The unsaleables educational platform is being designed as a living tool that will constantly evolve to include new best practices so that it can help industry maintain vigilance and focus on unsaleables reduction in the future,” concluded Mr. Eugrin.

Areas of focus for the group include shelf life management of goods throughout the supply chain, effective strategy and lead time for discontinued items, and the sharing of UPC level data with manufacturers, allowing them to receive much more granular information to support improvement eforts.