Changing Packaging Increase the Sales - Excel

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Changing Packaging Increase the Sales - Excel Powered By Docstoc

               Driver             Area of Impact   Category             Measuring Methodology                         Priority

                                                              Incremental margin from reduced on-shelf out-of-
1    On-Shelf Availability      Sales              Volume     stock assuming 1% OSA increase = 1/3% sales               Yes
                                                              Incremental margin gain / loss from brand image (for
2    Brand & Store image        In-Store           Volume                                                               Yes
                                                              manufacturer) and store image (for retailer)

                                                              Perceived incremental cost or saving input by trading
3    Promotion                  Sales              Volume     partners, when compared to cost of alternative            Yes
                                                              media such as POP materials, advertising, etc.
     Shelf Space / Density on                                 Incremental margin gain / loss from a change in
4                               Sales              Volume                                                               Yes
     shelf                                                    product density with new packs
                                                              Incremental margin from change in aisle congestion
5    Aisle congestion           In-Store           Volume                                                               Yes
                                                              due to packaging change
     Manufacturing Labour &                                   Difference in manufacturing conversion cost due to
6                               Manufacturing      Cost                                                                 Yes
     Resource                                                 the change in the packaging.
                                                              Two components (both will be incurred if the change
                                Manufacturing /               results in SKU increase/decrease):
7    Complexity                 Warehousing /      Cost       • Fixed cost/SKU spend yearly to maintain additional      Yes
                                Transportation                complexity
                                                              • Incremental inventory carrying cost
8    Packaging Material         Manufacturing      Cost       addnl cost/unit x annual sales                            Yes
                                                              Cost of change in asset utilization, calculated by
9    Asset utilisation          Manufacturing      Cost                                                                 Yes
                                                              manufacturer according to internal procedures.
                                                              Average cost of transporting a m3 of product *
10   Vehicle Fill               Transportation     Cost       difference in product volume due to packaging             Yes
                                                              change * annual volume
11   Shrinkage                  In-Store           Cost       Difference in stock loss before & after change            Yes
                                                        Average amount of time per stock count / cycle
  12     Cycle count          In-Store        Cost                                                           Yes
                                                        count * labor cost
                                                        • Reduced waste from stores / scrap (predicted)
  13     Code Rotation        In-Store        Cost      • Time saved through faster code checking and code   Yes
                                                        Time saved x labour cost (include finding in the
  14     Replenishment        In-Store        Cost                                                           Yes
                                                        backroom+finding in the cage + placing on shelf)
  15     Product Damage       In-Store        Cost      Estimated units damaged x cost/un                    Yes
  16     Shelf Cleaning       In-Store        Cost      Time saved on shelf cleaning x labor cost            Yes
                                                        • Recycling costs
  17     Packaging disposal   In-Store        Cost      • Waste handling costs                               Yes
                                                        • Revenue from sales of disposed packaging
                                                        Percieved cost saving achieved from simplified
  18     Category Reviews     In-Store        Cost                                                           Yes
                                                        category reviews / planogram building, etc.
  19     Legal                In-Store        Cost      • Change to existing costs / fines                   Yes
                                                        • Change to existing advertising spend for the
         Advertising /
  20                          In-Store        Cost      product                                              Yes
                                                        • Change to merchandising & POS material costs
                                                        Yearly interest required to finance the capital
                                                        investment and any one-time costs, given the
  21     Capital Investment   Manufacturing   Capital                                                        Yes
                                                        number of years manufacturer expects the
                                                        investment to be paid off.

Top Of Page
                     BUSINESS CASE DRIVER LOOKUP
       Driver Name
 1 On-Shelf
2 Brand & Store
3 Promotion
4 Shelf Space /
  Density on shelf
5 Aisle congestion

6 Manufacturing
  Labour &
7 Complexity
8 Packaging
9 Asset utilisation
10 Vehicle Fill
11 Shrinkage
12 Store Cycle
13 Code Rotation
14 Replenishment
15 Product Damage
16 Shelf Cleaning
17 Packaging
18 Category
19 Legal
20 Advertising /
21 Capital

 Description                                                                Other Terms
 OSA is the availability of the product on the shelf (or shop floor) for
 the Consumer to buy. Physical out of stocks (OOS) occur when there
 is no longer product available, although there can be a perceived
 OOS by the consumer if the product is difficult to identify and locate,
 or obstructed. For SRP implementations, OSA should be measured
 from the Shopper perspective. OSA is simple to define, but can be
 difficult to measure. The measure should be agreed and the
 improvement targeted. SRP should help drive improved OSA
 because the staff can replenish the product more efficiently. This
 however is very dependent on staff discipline and the suitability of the
 case count.
Image and impact of the store and product brand to the shopper, both
in terms of aesthetics and visual appeal, as well as ability to identify
and locate a product and it‟s variants through brand recognition.

- Store: visual merchandising is used to reinforce the market
positioning of a store, and SRP can impact on this in a deliberate or
incidental way. Poor execution of SRP could inadvertently degrade
the look of the store (excess cardboard, empty packaging etc.).
- Brand: applicable to manufacturer brand and retail / own brands
alike, SRP can impact positively, neutrally or negatively. Primary
packaging is designed to support the brand image, and care should
be taken not to limit it‟s impact (e.g. through partial or full obscuring
not compensated through SRP graphics). The impact on the Brand of
part / full shopped SRP units should also be considered.

Well-executed SRP can increase store and brand impact through
better customer communication and identification, and SRP can be
utilised to improve brand visibility via key brand messages and /or
blocking with larger visuals than are available on the consumer pack.
Promotion and advertising of products in-store can be facilitated by
SRP. Where applicable, the larger print area afforded by SRP can
carry an effective promotional message and on-shelf claims. Many
promotional executions use Gondola End displays. In these areas of
the store, good SRP (specifically „Display Ready‟ such as MU‟s and
Pallet shrouds etc) acts as a billboard for strong communication to
the shopper, driving sales.
Density on shelf is the number of products available within a given     Available shelf
shelf / shop floor area. Through the use of SRP types on shelf, space   space, Product
                                                                        Mix, SKU
previously taken by product maybe partly used by the additional         Range, Variety
packaging, so by reducing the density of products on shelf. However,
this maybe offset, and potentially improved, in categories where
dividers, feeders or on-shelf equipment was required to handle the
product on shelf.
Also of importance is the number of different SKU‟s stocked with a
specified area of shelving or floor space. SKU range can be limited
when products are fast moving as high on-shelf inventories are
required to help meet consumer demand at peak times to help
reduce or limit OOS for that product. SRP can improve the speed of
replenishment and therefore requires less on-shelf stock to meet
times of high consumer demand. This provides an opportunity to
increase SKU range and mix with additional lines, maybe not
previously stocked, delivering more consumer choice and increased
Aisle congestion can be both a physical and aesthetic issue, either
limiting the ability of a shopper to move down the isle, or reducing the
ability of a shopper to look down the isle and locate a product. Where
categories are high volume, or where existing packaging solutions
are cumbersome to replenish shelves, store personnel can contribute
to or cause congestion by blocking isles during replenishment.
Therefore, SRP solutions that speed replenishment, reduce the time
required for staff to be in the isle, leaving it un-obstructed to be
shopped and navigated.

Any difference to the production costs, that would impact the cost of Conversion Cost
goods sold (COGS). This should include any change to conversion
cost, such as additional manufacturing labour required to execute
SRP, or incremental co-packing labour required if an on-line solution
is not available. It should exclude changes to packaging material
cost which is already included in driver 8 below.
Complexity is defined as the requirement to manufacture and handle Dual / Multiple
multiple SKUs in the supply chain. Even if the consumer product         inventories
remains unchanged, the introduction of an SRP packaging variant
alongside the former packaging solution adds an incremental SKU
(often several), and therefore adds complexity and cost into the
supply chain. It is preferred that an SRP SKU replaces an existing
SKU (or as part of a consolidation exercise), so that complexity is not
added. Associated complexity costs could include:
- Additional SKUs in the Warehouse requiring more storage space
and an overall increase in inventory, as well as requirement for
additional pick faces and ability to handle a variety of SRP types.
- Picking efficiency could be impacted if SRP case size / case count
is changed. Smaller case size could result in more handling and
slower throughput, whereas a move to an MU could improve
throughput and picking efficiency.
- To provide the flexibility across different channels and different
numbers of facings, a secondary pack is required to have very few
facings. This may force SRP to a sub-standard case count in terms of
the total supply chain efficiency.
- Requirement of transportation to handle multiple load carrier / SRP
types on the same vehicle and within the same order e.g. Case, MU,
Pallet & Re-usable Tray.
Packaging material(s) required for the secondary packaging solution /
transit packaging, and the total value/quantity of packaging material
required to convert a certain product to SRP. The cost of packaging
is an element of cost of goods sold (COGS), and therefore any
increase would impact margins (assuming all other factors remain
constant). It is anticipated that sometimes SRP will result in increased
packaging, however depending on the category or the point of
packaging efficiency reached by the supplier beforehand, it may
result in a similar amount, or even reduced, packaging requirements.
Where an SRP solution requires more packaging material, it maybe
possible to offset against others that utilise MU / Pallet SRP types.
The utilisation of capital assets and equipment involved during        Line speed
manufacture. SRP can adversely impact asset utilisation when
additional equipment is required as a result of multiple packaging
solutions for the same product (e.g. additional SKUs are introduced).
For example, two types of packaging machine may be required to
package an SRP and a non-SRP variant of the same product.
Assuming the same amount of product is produced, both machine
types will be running sub-optimally to produce the same output.
However, a positive effect and improved efficiency and utilisation may
be experienced if SRP projects are able to reduce complexity versus
existing solutions.
The utilisation of a vehicle through use of efficient unit loads and      Cube utilisation
transit packaging dimensions that provides good pallet and vehicle
cube. The volume of a pack may change when moving to SRP. This
may alter the number of consumer units that can be packed on a
single pallet and in a vehicle load. If pack counts are reduced, the
proportion of cube space taken by packaging could increase, with the
potential of less product per pallet / vehicle. A move to returnable tray
packaging can lead to much reduced product per vehicle. With the
use of MUs or pallet types, the proportion of cube space taken by the
packaging will likely decrease, with the potential outcome of improved
vehicle fill. Therefore, as current packs do not have 100% vehicle
utilisation, it should be recognised that not all pack changes will lead
to either a positive or negative impact.
Shrinkage can be an issue throughout the supply chain, not just In-   Stock Loss,
Store. SRP can help through more tamper-evident packaging             Theft, Hot
                                                                      Products, Stolen
solutions. Shrinkage depending on the product and packaging type.     Products
Where Shrinkage is a problem, SRP should take that into account
during the process of developing an appropriate packaging solution.
SRP may also facilitate application of security tags.
Periodic counting of either the entire store inventory, or selected   stock count
SKUs, to reconcile with the inventory records of the store. SRP may
have an impact on store inventory counts by providing a visual
grouping of consumer units, therefore making it quicker to count
them. Where on-shelf inventory is high, counts can be done quickly in
multiples of the SRP case count. At times it maybe easier to do this
and then count the number of items already shopped (i.e. count the
empty spaces). However, care must be taken as this approach can
also create a risk with assumed standard counts, therefore reducing
Efficient and effective code rotation helps to ensure products with   Stock rotation,
limited shelf life make it to shelf before the expiry date, and those Date rotation
closer to their expiry date are presented to shoppers ahead of longer
date products. SRP solutions can improve the speed of being able to
rotate cases on shelf as it is easier to move around a number of
products simultaneously, with productivity improved even further
when the best before date is easily located and read. SRP can help
to reduce the amount of wasted product that goes out of date.
Replenishment includes the back-of-store storage and sorting areas, Night Filling,
as well as the labour required to physically replenish the shelves /        Shelf stacking
shop floor. This is the on-going day-to-day activity of storing and
replenishment products. SRP can product recognition making many
tasks simpler and quicker. Locating the product in the store room that
requires replenishment is quicker and more accurate, and when this
is to address an OOS or potential OOS, can reduce lost sales
(especially for priority products during receipt of store deliveries). Pre-
sorting of products for replenishment in the store room before moving
to shop floor is also reduced and so less space needs to be put-aside
for this task, releasing more room for storage. Furthermore store
employees are able to replenish products at a faster as more
products can be placed onto the shelf at once (one touch). Store
productivity can significantly be increased and provides the benefit to
use the saved time for more value-add tasks, or reduce store labour.
Removal of empty packaging should not be over looked.
Product damages are more likely to occur when items are handled
more, or when secondary packaging does not comply with functional
requirements such as „Easy to Open‟. SRP reduces handling of
individual consumer units through one-touch replenishment (and re-
merchandising). Furthermore, following the functional requirements
that make SRP units „Easy to Open‟ (e.g. avoid the use of tools such
as knives) and „Easy to Shelf‟ (e.g. shelf trays remain stable), product
damage can be further reduced. In addition, when the shopper takes
the product out and places it back, an SRP solution can help prevent
the product from falling over. Benefits may also be seen during code
rotation of the shelf, counting and cleaning the shelf, and products
are better divided on the shelves, also helping to reduce damage.
Shelf cleaning requirements or frequency can be reduced through
used of SRP as it is simpler to remove multiple items instead of
individual consumer units (similar to one-touch replenishment), so by
reducing the labour requirements. Furthermore, when a product is
damaged most of it will stay in the SRP unit instead of spilling on the
shelf. SRP will also help for more efficient product rotation (first in first
out), so reduced likelihood that shelves get dirty from old products
All secondary packaging going into stores requires disposal or return. Recycling
Packaging should be designed so it is easy to collapse after use, and
if comprised of more than a single material, the materials should be
easy to separate. SRP can facilitate the breakdown of the pack and
sorting of different materials compared to conventional packaging,
improving productivity for staff during replenishment. Furthermore,
making different materials separable ensures more material enters
the waste collection system (mixed materials may go to land fill).
Some SRP solutions may decrease the volume/weight of packing
materials used (e.g. Display units or Returnable items) and so by
decreases the amount of waste handled. On the other hand, if SRP
increases the volume/weight of packing material used (e.g. smaller
pack counts use more packaging per consumer unit) more waste
must be handled. Waste collected at store is bailed and sold,
offsetting Retailer obligations under waste legislation.
Review, execution and creation of category planograms, detailing
positioning, mix, number of facings etc that make the shelf and store
layout. This aspect forms part of the one-off or less frequent process
of merchandising, and should not be confused with the base
replenishment activity that is a constant process. SRP can facilitate
the introduction of a new planogram for a product category through
simpler stock removal and re-positioning as consumer units are
moved en-masse. The reduced handling also reduces damages and
makes planogram changes quicker to execute, and the „easy to
identify‟ attributes of good SRP allow quicker store compliance
analysis. Caution should be taken if there are two SRP sizes within a
particular store for a product, as mistakes can be made
Legal requirements must be abided by to ensure consumers are
protected and purchase quality products. For example, it is prohibited
to sell out-of-date products. SRP may help to meet legal
requirements in a more efficient way by making out-of-date products
easier to identify and remove from the store or warehouse. As an
SRP unit also helps to keep items of similar dates together, the risk of
rogue items that are out of date being missed is reduced. Affects
shopper satisfaction, returns, and may reduce compensation / fines.
Other possible legal aspect include some legal requirements to
display the “country of origin”. In most stores this is done manually on
boards above the articles.
SRP can facilitate advertsising and impact merchandising costs. The
larger print area afforded by SRP may provide an opportunity to
reduce spend on supporting POS / POP materials. Merchandising
costs may also be reduced where SRP provides the units fully
merchandised to the retailer, without the need for additional labour or
supporting equipment.
Capital expenditure, or any other cost not included above due to its       Manufacturing
one-time nature and normally amortized in the same way as capital          equipment
expenditure. This should include:                                          Plant
- Investment required in new manufacturing & packaging equipment           investment.
to produce and execute SRP solutions on-line, including purchase,          Working Capital.
modification, installation, downtime, write-off etc. Typically a large
negative impact for the Manufacturer, unless done as part of the
natural replacement cycle, as often more expensive equipment and
packaging is required to deliver SRP functionality as the packaging
complexity is normally increased.
- Indirect capital investment through use of co-packers when it is not
feasible to produce on-line with other designs.
- Time and resource required to re-design and implement new SRP
packaging solutions for existing products, from initial concept through
to full-scale production. It is expected that SRP solutions will require
packaging re-designs and proto-typing, whether it be a total
transformation or a simpler artwork change. Additional one-time costs
would be anticipated, if only to evaluate the case for SRP. Cross-
functional work involves a large number of resources to work against
a “loss avoidance” project.
Applicability        Mitigate or Maximise                 Impact
All Categories and   Mitigate – Limit the failure of      Benefit to both Retailer and
products             execution (replenishment) in store   Supplier through increased
                     through suitable employee            Sales volume on that
                     training.                            product, with most
                                                          significant benefits realised
                     Maximise – Cases that fit two        in categories with poor
                     deep on shelf help reduce the        OSA. Need to be aware of
                     timing criticality of replenishment, Category / Product
                     and SRP executions that are          cannibalisation impacts.
                     “Easy to Shop” (see Functional
                     requirements), help reduce the
                     perceived OOS to the consumer
More relevant to         Mitigate – When designing pack        Both, through increased or
categories with          style and graphics, the combined      reduced image for the
large number of          impact of consumer pack,              brand and the store, and
products, each with      secondary pack and store              therefore
limited number of        environment need to be                increase/decrease on
facings. Harder to       considered together. Efficient in-    customer loyalty/sales.
measure as often         store execution to ensure staff are   Impact will vary between
qualitative, and         trained on correct usage and          categories based on
impact to sales uplift   replenishment techniques.             shopper behaviour.
and reduced
perceived OOS            Maximise – Packaging design in
harder to quantify       line with shopper research, and
                         aligned to functional
All categories, but    Maximise – Ensure a common         Both Retailer and Supplier
more relevant on       approach for a category so it
categories that are    creates a good impression of the
more dependent on      whole shelf section.
promotions or
impulse purchase. It
does not apply to
products in reusable
trays, crates etc.
All SRP, especially     Mitigate – Harmonise shelf            Both Retailer and Supplier.
where high on-shelf     dimensions by category in order
inventory is required   for sizes of secondary packs to
as a response to        best fit to shelf for highest density
limiting OOS during     possible. Additional SKUs that
peak demand             compliment existing range to limit

                        Maximise – Limit secondary
                        packaging on shelf. If secondary
                        packaging is used for displays,
                        make sure that the packs are
                        stackable or suitable for an
                        effective display off-shelf in store.
                        Maximise density when designing
                        a merchandising unit. Spread
                        replenishment across 24hrs to
                        limit high on-shelf inventories
                        required to cover demand
                        between replenishment shifts.
Large items like     Maximise – SPR as easy/fast to   Impact – Retailer &
bottled water / wine operate in store as possible     Supplier benefit for
etc, or where high                                    resulting uplift and
volume lines require                                  reduction in perceived
frequent                                              OOS, and also provides
replenishment                                         additional benefit to
during peak trading                                   Retailer through shopper
times e.g. Bread                                      satisfaction.

All                 Mitigate – Automation can help    Generally on-cost to
                    introduce SRP with limited or no Manufacturer.
                    effect to conversion costs.
                    Standardization of packs can also
                    help by reducing labour required
                    for changeover time.
All   Mitigate – Standardisation across     Impacts both Supplier and
      Retailers both in terms of            Retailer, although likely to
      execution and timetable. Allow        be greatest for the
      time for evolution in executions.     Supplier. Most companies
      Move to MU / Pallet solutions         have a rule of thumb cost
      where relevant. Minimise on-cost      of additional SKU‟s in the
      so that SRP is a „global‟ change      Supply Chain.
      and additional SKUs are not
      added – Retailers can then
      choose to use the solution or not
      (relevant for on-shelf solutions).
      Smaller case sizes that can be
      „locked‟ together during transit to
      maintain unit load efficiencies.
Dependent on the       Mitigate – Supplier/retailer to       Supplier cost / benefit
chosen solution, but   evaluate together, and objectively,
potentially            if added packaging will have a
applicable to all      significant impact, or if most of the
SRP                    expected benefit can be achieved
                       by improved labelling and
                       opening. Suppliers to develop the
                       packaging that will serve SRP
                       purpose with minimum possible
                       increase in packaging
                       quantity/cost. There maybe times
                       when a packaging re-design to
                       accommodate SRP requirements
                       can actually reduce packaging, or
                       limit environmental impacts, and it
                       is recommended that packaging
                       suppliers are suitably involved to
                       limit or reduce impact (both cost
                       and environmental). Reductions in
                       case count or facings are most
                       likely to drive packaging
Relevant for all SRP Mitigate – Define an SRP solution Primarily Supplier impact,
types and            that can be used in the different  although may also impact
categories           store format (small / medium / big Retailer
                     stores). If this challenge is met,
                     this will reduce the types of
                     packaging and ensure good asset

                     Maximise – As part of de-
                     complexion exercise to review
                     pack styles and counts
Relevant for all SRP Mitigate – Reference „Efficient    Impacts primarily on
types and            Unit Loads‟ to ensure best         Manufacturer distribution,
categories           possible vehicle fill with SRP.    but also impacts Retail
                     Ensure at a category level that    distribution
                     overall packaging used does not
                     increase (e.g. offset moves to
                     smaller units by moves to MU‟s).
                     Avoid changing dimensions of

                     Maximise – Move to MU‟s / Pallet
                     type SRP for fast moving lines
Especially affects   Primarily Retailer benefit,
high value,          but may also provide
concealable and      benefit to Supplier
fashionable (in
style) items
All   Mitigate – to increase the           Increased store efficiency
      counting efficiency through SRP,     will be a Retailer benefit,
      store personnel will need to know    however, any cost resulting
      the number of consumer units in      from reduced count
      each secondary pack, or count full   accuracy will be suffered by
      secondary packs and shopped          both retailer and supplier
      packs separately, which will         causing out of stock. The
      increase counting complexity, or     impact of this driver will be
      reduce counting accuracy.            dependent on category
                                           volume, and consumer unit
                                           pack size (very small
                                           consumer units being more
                                           difficult to count, therefore
                                           providing more benefit with
                                           SRP, etc.)
Products with best   Maximise – Introduce with best      Primarily in-store benefit for
before dates and     practice date coding (refer to IGD) the retailer, although can
limited shelf life                                       provide value to Supplier in
                                                         warehousing environment
Greatest value to       Maximise – consider use of MU /     Primarily Retailer benefit,
high volume and / or    Pallet solutions where very high    unless merchandising /
smaller items in high   volume. Regular training of staff   replenishment labour
case counts.            to ensure SRP solutions fully       supplied by Manufacturer
Recognition aided       utilised and understood.
when large
categories with
many product
For all categories.    Mitigate – If the package is not   Benefit to both Retailer and
Categories with        designed right it can even         Supplier
reusable plastic       increase the damage in the
trays (which are       warehouse (package is too easy
presentable in the     to open) by (mechanical) order
stores) already give   picking. Damage can also occur
this opportunity.      during shelve replenishment when
                       the package is not robust enough
                       after e.g. the top hood is removed
                       / carton is stripped away.

                       Maximise – Design of the SRP is
                       important (proper, robust case /
                       tray to put it in the shelf)
All categories, but   Maximise – Base of secondary    Mainly Retailer benefit
especially “powder packages to be closed (retaining   related to store
products” like sugar, spillage)                       productivity. The benefit
flour. Mainly                                         will vary as to what type of
relevant to on-shelf                                  shelves is being used.
SRP types
Packaging disposal Mitigate – Ensure no more           Impacts solely on Retailer.
is relevant to all packaging is used in the design     Can vary by category since
SRP types.         than the minimum needed to meet     the change in packaging
                   the functionality required. Ensure  amount on moving from
                   at a category level that overall    conventional packaging to
                   packaging used does not increase    SRP depends on the
                   (e.g. offset moves to smaller units relative functionalities of
                   by moves to MU‟s)                   the two packs (e.g.
                                                       Haircare products in shrink-
                    Maximise – Incorporate easy        film only may move to tray
                    collapsible features into SRP      plus shrink-film to achieve
                    designs. Ensure packing lines are easy to shelf functionality).
                    designed to avoid the permanent
                    bonding of materials from two
                    different waste streams – either
                    no bond for different materials or
                    bond only similar materials
Maximum benefits Maximise – Limited SRP sizes /   Could benefit both Retailer
for small items like variants for a product       and Supplier, according to
cosmetics or                                      who does the reviews
confectionary, or
where there is
considerable range
and mix like oriental
Any SRP type used Maximise – Reduce to clear stock Retailer benefit
in perishable          that is low-code
products categories.
Of maximum benefit
for food categories
with short shelf-life.
All categories, but    Both Retailer and Supplier
primarily those that
required intensive
merchandising and
supporting POS /
POP equipment and
All Categories, but   Mitigate – When developing new        One-time cost to
very dependant on     products, design the                  manufacturer, that will be
line design.          manufacturing and packaging line      reflected in the balance
                      for SRP. Introduce as part of         sheet and amortization
                      normal equipment replacement          expense. Also in case of
                      cycle. Standardised low cost          re-design and
                      simple solutions that can be          implementation, it can be
                      produced on-line, that avoid          on cost to both
                      requirement to produce off-line at    manufacturer and retailer
                      co-packer. (Critical volumes are      when they need to work
                      key to this). Treat as an evolution   collaboratively on a new
                      not a revolution i.e. Allow time to   SRP.
                      adapt equipment etc. Make SRP
                      as part of the normal new product
                      design process to reduce
                      retrospective redesign costs.

          KEY:           Orange        STANDING DATA - must be entered as used by multiple driver calculations
                                       Priority   Identified as a Priority Driver - Complete        Yellow cells for this driver

                                                  Not a priority - no data entry required for this driver

                                                          STANDING DATA                                                      Retailer              Manufacturer
                                                          Revenue Per Unit
                                                          Net Profit Margin
                                                          Annual units sold                                                                                    -
                                                          Avg. store labour rate per hour                                                                      N/A
                                                          Inventory value per unit
                                                          Cost of capital (yearly %)                                                      N/A

                    Please check: all positive results should help for better business case, all negative results should work against the business case.

    Priority     1 On Shelf Availability                  Variables                                                          Retailer              Manufacturer
                                                          Current Average OSA                                                                                  N/A please provide data
                                                          Expected Future OSA                                                                                  N/A please provide data
                                                          Incremental Availability                                                       0.0%                  N/A
                                                          Incremental Sales %                                                              0%                   0%
                                                          Margin Per Unit                                                               € 0.00              € 0.00
                                                          Total Annual Gain / (Loss)                                                       €0                   €0

    Priority     2 Brand & Store Image                    Variables                                                          Retailer              Manufacturer
                                                          Expected Incremental Sales Increase / (decrease) in %                                                      please provide data
                                                          Revenue Per Unit                                                                  €0                   € 0 please provide data in line 12
                                                          Net Profit Margin                                                             0.00%                0.00% please provide data in line 13
                                                          Margin Per Unit                                                               € 0.00               € 0.00
                                                          Annual units sold                                                               -                    -     please provide data in line 14
                                                          Total Annual Gain / (Loss)                                                        €0                   €0

    Priority     3 Promotion                              Variables                                                          Retailer              Manufacturer
                                                          Expected Incremental Sales Increase / (decrease) in %                                                      please provide data
                                                          Revenue Per Unit                                                                  €0                   € 0 please provide data in line 12
                                                          Net Profit Margin                                                             0.00%                0.00% please provide data in line 13
                                                          Margin Per Unit                                                               € 0.00               € 0.00
                                                          Annual units sold                                                               -                    -     please provide data in line 14
                                                          Total Annual Gain / (Loss)                                                        €0                   €0

    Priority     4 Shelf Space / Density                  Variables                                                          Retailer         Manufacturer
                                                          Number of facings - before                                                                      N/A please provide data
                                                          Number of facings - after                                                                       N/A please provide data
                                                          Average annual revenue per facing                                                                   please provide data
                                                          Net Profit Margin                                                             0.00%          0.00% please provide data in line 13
                                                          Total Annual Gain / (Loss)                                                       €0              €0

    Priority     5 Aisle Congestion                       Variables                                                          Retailer              Manufacturer
                                                          Expected Incremental Sales Increase / (decrease) in %                                                      please provide data
                                                          Revenue Per Unit                                                                  €0                   € 0 please provide data in line 12
                                                          Net Profit Margin                                                             0.00%                0.00% please provide data in line 13
                                                          Margin Per Unit                                                               € 0.00               € 0.00
                                                          Annual units sold                                                               -                    -     please provide data in line 14
                                                          Total Annual Gain / (Loss)                                                        €0                   €0

    Priority     6 Manufacturig Labour                    Variables                                                          Retailer              Manufacturer
                                                          Increase / (decrease) in conversion cost per unit                               N/A                           please provide data
                                                          Annual units sold                                                               N/A                  -        please provide data in line 14
                                                          Total Annual Saving / (Cost)                                                    N/A                      €0

    Priority     7 Complexity                             Variables                                                          Retailer              Manufacturer
                                                          Increase / (decrease) in number of SKUs in business                                                           please provide data
                                                          Fixed annual cost per SKU maintained                                                                          please provide data
                                                          Annual Saving / (Cost) of change in SKU Complexity                                  €0                   €0

    Priority     8 Packaging Material                     Variables                                                          Retailer              Manufacturer
                                                          Increase / (decrease) in packaging cost per unit                                N/A                           please provide data
                                                          Annual units sold                                                               N/A                  -        please provide data in line 14
                                                          Total Incremental Saving / (Cost) from packaging                                N/A                      €0

    Priority     9 Asset Utilisation                      Variables                                                          Retailer              Manufacturer
                                                          Saving / (Cost) of change in asset utilization                                  N/A                           please provide data

    Priority     10 Vehicle Fill                          Variables                                                          Retailer              Manufacturer
                                                          Difference in distribution cost per unit (including + or -)                                                   please provide data
                                                          Annual units sold                                                               -                    -        please provide data in line 14
                                                          Incremental saving / (cost) of vehicle fill change                                  €0                   €0

    Priority     11 Shrinkage                             Variables                                                          Retailer            Manufacturer
                                                          Value of average shrinkage/yr before                                                               N/A please provide data
                                                          Value average shrinkage/yr after                                                                   N/A please provide data
                                                          Incremental saving / (cost) from shrinkage                                          €0             N/A

    Priority     12 Store Cycle Count                     Variables                                                          Retailer            Manufacturer
                                                          Avg. hrs for full category stock count before (all stores)                                         N/A please provide data
                                                          Avg. hrs for full category stock count after (all stores)                                          N/A please provide data
                                                          Number of stock counts per year                                                                    N/A please provide data
                                                          Incremental saving / (cost) of cycle count                                          €0             N/A

    Priority     13 Code Rotation                         Variables                                                          Retailer            Manufacturer
                                                          Annual cost saved due to reduced scrap from expiry                                                 N/A please provide data
                                                          Annual cost saved from reduced labor for rotation                                                  N/A please provide data
                                                          Incremental saving / (cost) of code rotation                                        €0             N/A

2cd28b91-1c16-4ef6-b760-662c23cca882.xls                                           Data Entry & Driver Calculation                                                                                       63/65

          KEY:          Orange        STANDING DATA - must be entered as used by multiple driver calculations
                                     Priority      Identified as a Priority Driver - Complete        Yellow cells for this driver

                                                   Not a priority - no data entry required for this driver

                                                           STANDING DATA                                                      Retailer          Manufacturer
                                                           Revenue Per Unit
                                                           Net Profit Margin
                                                           Annual units sold                                                                                -
                                                           Avg. store labour rate per hour                                                                  N/A
                                                           Inventory value per unit
                                                           Cost of capital (yearly %)                                                     N/A

                    Please check: all positive results should help for better business case, all negative results should work against the business case.
    Priority     14 Replenishment                         Variables                                                   Retailer         Manufacturer
                                                          # of units replenished per hour before                                                   N/A please provide data
                                                          # of units replenished per hour after                                                    N/A please provide data
                                                          Annual units sold                                                      -                 N/A please provide data in line 14
                                                          Avg. labor rate per hour                                                 €0              N/A
                                                          Incremental cost of replenishment                                        €0              N/A

    Priority     15 Product Damage                         Variables                                                          Retailer         Manufacturer
                                                           % of units damaged in-store before                                                              N/A please provide data
                                                           % of units damaged in-store after                                                               N/A please provide data
                                                           % of units damaged in warehouse before                                                               please provide data
                                                           % of units damaged in warehouse after                                                                please provide data
                                                           Inventory value per unit                                                      € 0.0            € 0.0 please provide data in line 16
                                                           Annual units sold                                                              -                -    please provide data in line 14
                                                           Net saving / (cost) from change in damage                                        €0               €0

    Priority     16 Shelf Cleaning                         Variables                                                          Retailer       Manufacturer
                                                           Avg. hrs for full category shelf cleaning before                                              N/A       please provide data
                                                           Avg. hrs for full category shelf cleaning after                                               N/A       please provide data
                                                           Avg. labor rate per hour                                                       €0             N/A       please provide data in line 15
                                                           Number of times shelf cleaning performed per year                                             N/A       please provide data
                                                           Incremental saving / (cost) of shelf cleaning                                  €0             N/A

    Priority     17 Packaging Disposal                     Variables                                                          Retailer          Manufacturer
                                                           Net saving / (cost) from packaging disposal                                                      N/A please provide data

    Priority     18 Category Reviews                       Variables                                                          Retailer          Manufacturer
                                                           Saving / (Cost) of efficiencies from category review                                                    please provide data

    Priority     19 Legal                                  Variables                                                          Retailer          Manufacturer
                                                           Saving / (Cost) due to change in legal costs                                                            please provide data

    Priority     20 Advertising / Merchandising            Variables                                                          Retailer          Manufacturer
                                                           Saving / (Cost) due to change in spend                                                                  please provide data

    Priority     21 Capital Investment                     Variables                                                          Retailer          Manufacturer
                                                           Value of one-time capital investment                                           N/A                     please provide data
                                                           Cost of capital (yearly %)                                                     N/A                  0% please provide data in line 17
                                                           Standard requirement for return on investment (years)                          N/A                     please provide data
                                                           Annual saving / (cost) from capital investment                                 N/A                  €0

2cd28b91-1c16-4ef6-b760-662c23cca882.xls                                            Data Entry & Driver Calculation                                                                                 64/65

                Drivers impacting business case negatively should be demonstrated with negative numbers
                Costs/benefits should be calculated as incremental, not as total of today's business

                                                                                                Incremental Benefit / (Cost)
                                                                                    Priority   Retailer      Manufacturer
                                              On Shelf Availability                                     €0               €0
                                              Brand & Store Image                                       €0               €0
                Revenue      Sales Volume     Promotion                                                 €0               €0
                                              Shelf Space / Density                                     €0               €0
                                              Aisle Congestion                                          €0               €0

                                              Manufacturig Labor / Resource                              N/A              €0
                                              Complexity                                                 €0               €0
                                              Packaging Material                                         N/A              €0
                                              Asset Utilization                                          N/A              €0
                                              Vehicle Fill                                               €0               €0
                                              Shrinkage                                                  €0               N/A
                                              Cycle Count                                                €0               N/A
                                              Code Rotation                                              €0               N/A
                  Cost                        Replenishment                                              €0               N/A
                                              Product Damage                                             €0               €0
                                              Shelf Cleaning                                             €0               N/A
                                              Packaging Disposal                                         €0               N/A
                                              Category Reviews                                           €0               €0
                                              Legal                                                      €0               €0
                                              Advertising / Merchandising                                €0               €0

                            Fixed Capital     Capital Investment                                         N/A              €0
                                                             NET RESULT PER PARTNER:                      €0               €0

                                                                   TOTAL BUSINESS CASE:                                    €0

               SALES UPLIFT BEYOND IDENTIFIED ABOVE, NEED TO JUSTIFY PROJECT: Retailer:                          #DIV/0!
                                                                              Manufacturer                       #DIV/0!
                                                                              Total Chain:                       #DIV/0!

2cd28b91-1c16-4ef6-b760-662c23cca882.xls                     Business Case Result                                                65/65

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Description: Changing Packaging Increase the Sales document sample