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New Standards Set to Make Trading Partner Performance Management More Effective
A select group of retail leaders, including Oracle, has joined forces to create new GS1 Trading Partner Performance Management (TPPM) standards, with the goal of providing comprehensive, unambiguous metrics definitions and standard communications mechanisms.
Currently, retailers use different terms and calculation approaches to evaluate their suppliers’ performance for even the most common performance measures.
“The same set of shipments could be considered to have a 99 percent fill rate, or a 0 percent fill rate, depending on the method used," says Matt Johnson, senior director, consumer sector collaboration, Oracle.
"This lack of clear definitions and standards leads to unnecessary confusion and disruptions, making it impossible to benchmark performance across trading relationships," Johnson adds.
From GCI to GS1 TPPM
The GS1 committee tasked with designing the new standards encompasses major retailers, including Kroger, Safeway, Wegmans Food Markets, and CVS Pharmacy, as well as manufacturers such as Johnson & Johnson, General Mills, Coca-Cola Company, Kraft Foods, and Procter & Gamble.
They are joined by representatives from major trade associations, as well as GS1 representatives from Mexico and other countries. Oracle co-chairs the committee.
The new standards use the current Global Commerce Initiative (GCI) Scorecard as a starting point, but extend it to include a range of new sales and operational metrics, with a special emphasis on the needs of retailers.
The standard metrics include monetary sales growth, order cycle time, invoice and item data accuracy percentage, sales/consumption forecast accuracy, out-of-stock percentage, and percentage of unsaleables.
The new TPPM measures will be independent of specific product, location, and timeframes, giving retailers the option of measuring performance at whatever level makes the most sense for their business.
Implementation of the new TPPM standards will also include new, standardized communications mechanisms, according to Johnson. As a result, both retailers and manufacturers can submit measurement data and use their choice of technology to aggregate, display, and analyze results.
Already, Oracle is providing a group of companies with online access to trading partner scorecards as well as to underlying data based on a draft version of the new standards.
"The result? Greater productivity and better leverage of technology investments, leading to better trading partner performance overall," Johnson says.
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