Ac neilson collects data from all major grocery

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Unformatted text preview: selection • Private-label manufacturers • National brand • Logistics and distribution • Stock management • Price management Two principal management techniques are employed: (1) comparing product sales in stores with similar demographic markets (especially new stores) that over time can suggest changes in category product mix for a store and (2) using industry data collected by AC Neilson, an independent market research firm. AC Neilson collects data from all major grocery retail chains in Canada and makes it available in aggregated form. This approach allows each grocery chain to know its market for its specific products by geographic region. The performance indicators monitored by category managers in the industry include sales per square foot, change in sales per square foot in comparable stores, customer satisfaction survey index, and individual category manager performance index. See Table 3 for a summary of performance measures and how they are calculated.22 Summary of Supplier-Selection Management Interviews Supplier selection involves selecting the manufacturer of the private-label products and selecting the national/regional brands to be carried in the various retail stores. This subprocess includes developing new products. Private-label manufacturers: Based on category analysis and management’s “gut feeling,” Loblaw develops private-label products when it finds a market niche within a category where the consumer will purchase a product that is not a national brand. Loblaw can introduce either a premium private-label product (President’s Choice™) and/or a generic (no name™) product. The 22 To protect the confidentiality of Loblaw’s specific performance measures, which are considered proprietary by Loblaw’s management, all performance measures cited in the case are based on measures found in KPMG’s retail business model. Therefore, reference is made in the case to performance indicators normally employed in the industry. 19 n KPMG/University of Illinois Business Measurement Case Development and Research Program July 1999o Table 3 Performance Measures for Supply Chain Product Management at Loblaw Performance Measures Category management 1. Sales per square foot 2. Change in sales per square foot in comparable stores 3. Customer satisfaction survey index 4. Individual category manager performance index Supplier selection – ongoing 1. Percentage of orders delivered correctly 2. On-time delivery percentage 3. Lead time for product delivery Logistics and distribution 1. Distribution costs per case 2. Inventory cross-dock percentage 3. Number of errors in “picking” inventory per order 4. Percentage of orders filled completely 5. On-time arrivals of vendors trucks at distribution centers 6. On-time arrivals of distribution center trucks at stores Stock management 1. Inventory turnover rates Formula 1. Sales/store square footage 2. (Salesperiod2 – Salesperiod1) Salesperiod1 3. Based on a survey carried out quarterly by independent research firm 4. Composite performance i...
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This note was uploaded on 01/27/2014 for the course ACCY 405 taught by Professor Staff during the Fall '08 term at University of Illinois, Urbana Champaign.

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