CHICAGO -- The food industry can add yet another acronym to its vocabulary. It's called Great Performance Alliances, a business process that was given much fanfare during the International Housewares Show here, Jan. 14 to 17.
The program, sponsored by the National Housewares Manufacturers Association, Rosemont, Ill., and developed by Coopers & Lybrand Consulting, based here, was two years in the making. While debuting as an effort between manufacturers and retailers of hard goods, it is planned to extend to other areas of the food industry. Coopers & Lybrand recently discussed the concept with the board of directors of the International Mass Retailers Association, Arlington, Va.
During a special presentation and press conference at the housewares show, Thom Blischok, managing partner for retail industry practice at Coopers & Lybrand, and a principal on the project, introduced GPA best practice models.
The objective of GPA, said Blischok, is to develop a process to change the confrontational relationships that exist between all retailers and manufacturers. It also targets forming an alliance that is focused on the consumer. To help in this effort, three "best practices" booklets are available for retailers and manufacturers to use when faced with a potential confrontational situation. To further educate retailers and manufacturers, a GPA certification
program is being developed.
Tom Conley, executive director and chief operating officer of the housewares association, called GPA "revolutionary" and "ground breaking."
The best practices booklets consist of 40 pages of information that contain guidelines for action and a buyer's check list. These include what GPA research identifies as four critical issues facing retailers and manufacturers: being in-stock and having the ability to do demand-based forecasting, deductions, compliance and returns. Compliance deals with the terms and conditions of the business deal. The GPA calls for the business agreement to be written rather than oral.
"We've tested these practices on retailers and manufacturers, and they are sharing nine margin points," said Blischok, who emphasized it was a significant figure, and worth anyone's effort to pursue GPA. The association will target vertical retail channels, including grocery, to implement GPA. Presentations are expected to be made later this year at meetings of the General Merchandise Distributors Council, Colorado Springs, Colo., and National Association of Chain Drug Stores, Alexandria, Va.
"It will be interesting to see how different channels respond, and if they respond," Conley told SN during an interview.
Before it devised its GPA strategy, the association took a close look at the food industry's Efficient Consumer Response initiative, a process that is also consumer focused.
"Theoretically, the goal of ECR and GPA is probably very similar," Conley said.
"But the difference is in how you get there," he explained.
"We are trying to take GPA one step further than ECR by providing formal training through a certification program," said Conley.
By the end of this month, the association hopes to have a model curriculum ready to be tested, with training to begin officially in the fall. Besides the best practice books, the training will include computer assimilation, discussion groups and role playing.
The program will have three executive levels of certification: senior executives, information systems personnel and buyers/sellers. Each level will have its own specialized programming. All three will be priced separately.
Another difference between GPA and ECR, according to Conley, is less emphasis on technology. Technology is a small portion of the GPA process. "Our focus is to get people to change their business practices," he said.
Indeed, shortcomings of electronic data interchange, an important component of ECR, were outlined during the presentation.
Said Blischok, "Retailers have spent millions of dollars on EDI. Today, with all our sophistication and all the money we've spent, about 70% of our EDI transactions require manual intervention."
Blischok said that the EDI strategy is not working because "we aren't communicating about the fundamentals of what EDI can do for us." Said Conley, "If there are deviations from the norm, and people are changing things (i.e., deductions and allowances) at the last minute and it doesn't flow, then all the EDI in the world isn't going to help." Conley added that GPA will help bring needed standardization to the process. Commenting on GPA, Perry Caccio, chief executive officer of Consumers Distributing, Mississauga, Ontario, said, "This process has elevated the housewares industry just slightly above the fray for most retailers, and for those who are aware of GPA initiatives, it addresses the problem of profitability specifically in the pipeline."
John Meier, chairman of Libbey Inc., Toledo, Ohio, said of the process, "Let's get it on the table. Let's have a template and blueprint. Let's educate our people and begin to strive for some commonality. The supply chain cries for efficiency and the elimination of redundancies that exist as we speak."
Charley Goetz, this year's NHMA chairman, and president of Stylette, Oakdale, Pa., said, "This program has substance. This is real. Everybody wants to walk away and nobody wants to talk about allowances or deductions."