SGC Services
  SKU rationalization is an integral part of the supply chain failure rate. It is critical that this issue be addressed in any comprehensive supply chain improvement initiative.
           
 

Policy Comparison Index

    

PCI provides retailers and manufacturers with an independent benchmark that accurately measures the supply chain failure rate (SCFR) for every manufacturer's UPC within the supply chain channel. The initial benchmark channels are grocery and drug.

The new supply chain realities include the proliferation of UPC codes with the resultant increase in manufacturer and retailer sponsored product discontinuations (Discos) due to non-performance of new items. PCI captures Disco data for every UPC code in the supply chain.

The foundation of PCI is a large and comprehensive validated sample that represents a statistically accurate view of each supply chain channel. Data is acquired from participating retailers under a data acquisition contract. Reclaim data is provided each month via electronic feeds. All data is benchmarked via a “constant retailer supply chain". The same distribution centers, product handling equipment and personnel are utilized to handle all product within a category.

PCI applications include:

  • Benchmarks internal supply chain performance against “Best in Category” performance for all competitors.
  • Monitors the effectiveness of competitive supply chain initiatives.
  • Provides additional data points to supplement ARP rate formulation.
  • Provides a basis for both retailers and manufacturers to implement reimbursement policies based on an independent benchmark.
  • Identifies SKU rationalization prospects. ARP profit or loss is calculated for each UPC code.
  • Calculates ARP activity for all manufacturers and categories. ARP gap (positive or negative) is calculated for each manufacturer and category.