EFR is not simply a matter of implementing a new technology. It is about manufacturers, brokers, distributors and operators coordinating their efforts for the benefit of the entire supply chain and the consumer. It is a new way of doing business that requires the involvement and commitment of all industry partners.

The Canadian foodservice sector, in its commitment to provide enhanced value to consumers, has undertaken this initiative to maximize supply chain responsiveness and minimize costs.

"EFR is the most significant opportunity we have to ensure the viability of our industry into the new millennium. EFR can save time and resources in transactions between trading partners, reduce inventory levels and provide better management information for the industry. It is an initiative necessary to drive the health and growth of foodservice in this country."

Gord Wilson, General Manager, Nabisco Food Service Company, and EFR Steering Committee Co-chair

"Today, foodservice trading partners are not taking full advantage of cooperative opportunities to improve the efficiency of the entire supply chain or effectively using available supply chain technology. EFR can help us do this."

Jim Greenwood, President, GFS Canada Company Finlay Greenwood Division and EFR Steering Committee Co-chair

Background

In 1996, KPMG conducted a supply chain review of the foodservice industry on behalf of the Food and Consumer Products Manufacturers of Canada. The study's results concluded:

• The consumer has become more value conscious in the last several years. Industry sales dropped in the early 1990's, and growth has been slow since that time.
• On average, there are 52 days of finished goods inventory in the supply chain (manufacturer 26, distributor 23 and operator 3).
• Information technology for supply chain management is not well used in the industry. Less than 2% of all transactions are made via electronic data interchange (EDI).

The study identified continuous replenishment ($300 million savings) and streamlined administration ($100 million savings) as the two largest opportunities to take costs out of the foodservice supply chain.

EFR has the potential to achieve significant results for the Canadian foodservice industry including:

• Deliver $400 million in savings to the industry from the manufacturers and distributors implementation. Industry savings will likely exceed $500 million once operator savings can be further quantified.
• Provide better management information at every stage of the supply chain.
• Bring trading partners together to focus on adding value to the consumer and growing market share for the benefit of the entire foodservice industry.

Recognizing the benefits of implementing such an initiative, a joint industry committee, comprised of foodservice manufacturers, brokers, distributors and operators, was established in 1997 to launch EFR in Canada.

EFR Steering Committee

The Steering Committee is comprised of two co-chairs (manufacturer and distributor), as well as senior executives from manufacturers, brokers, distributors, operators and associations. The presence of the co-chairs facilitates a top-to-top joint industry committee to develop, discuss and promote industry recommendations.

The Steering Committee's objectives include:

• To identify and develop best practices in industry-wide processes which, when implemented, will facilitate more efficient supply chain.
• To learn from other industry supply chain initiatives, such as ECR and EFR (US), and identify their relevance to foodservice.
• To publish and encourage adoption of industry standards, performance and implementation guidelines.
• To focus on the issues and barriers to implementation, using the committee as a resolution and consensus building forum.
• To establish the industry agenda and target dates.

EFR Projects

As a starting point to establish the fundamental building blocks for EFR implementation, the Steering Committee organized subcommittees, each co-chaired by a senior distributor and manufacturer executive, to oversee the following projects:

1. Product Identification/Bar Codes – to implement and use standard identification codes as per industry (Electronic Commerce Council of Canada) standards* and guidelines, including bar codes on SKU's, cases and pallets.
2. Electronic Commerce – to integrate electronic commerce (EDI) into common business practices, from the order through to reconciliation.

A third subcommittee, designed to provide the educational and communication framework in encouraging industry-wide adoption and understanding of EFR recommendations, was also set up.

*ECCC is the industry organization responsible for EDI and product identification in Canada.

Copyright © 2000 EFR