What is EFR?

How does it work?

So, it's all about implementing new technologies?

How did this initiative get started?

Is this a new initiative?

Why should my company get involved?

Who runs the initiative?

What is the Steering Committee mandated to do?

Can my company get involved in a project?

Why should my company use barcodes?

What are the benefits for operators?

What are the benefits for distributors?

What are the benefits for manufacturers?

What is EFR?

The Canadian Efficient Foodservice Response (EFR) initiative is a collaborative effort to align manufacturers, distributors, brokers and operators within the Canadian foodservice supply chain. Its purpose is: to eliminate inefficiencies and wasteful practices; enhance the ability of each party to compete fairly and vigorously; and to achieve a low-cost, high-performing supply chain. In short, EFR is designed to provide better value to your customers while removing unwanted cost and inefficiencies from the foodservice supply chain.

How does it work?

The Canadian foodservice sector, in its commitment to provide greater value to consumers, has undertaken this initiative to maximize supply chain responsiveness and minimize costs. Each supply chain member works in unison with the others to increase value, while minimizing the cost burden on any other member. The result is a supply chain that is synchronized, highly flexible, reliable, and responsive to customer demands, with short cycle times and lower total value chain costs from raw material ingredient supplier to consumption.

So, it's all about implementing new technologies?

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.

How did this initiative get started?

In 1996, KPMG was commissioned to conduct a study examining the state of the foodservice sector. The study results showed that the following had to be accomplished in order for the sector to prosper:

• combat the 6% drop in the foodservice sector's share of Canadian food expenditures (from 41.6% in 1989 to 35.5% in 1996);
• develop more efficient processes and information management systems within the foodservice supply chain; and
• reduce costs and increase supply chain efficiencies by reducing the amount of costly, finished goods inventory and replacing the traditional supply chain model with one based on consumer demand.

Is this a new initiative?

Its origins are modeled on the grocery sector's Efficient Consumer Response (ECR) initiative. Both EFR and ECR share the same goal; to maximize supply chain responsiveness and minimize costs.

While the principle focus of ECR is the grocery sector (or "food-prepared-at-home"), EFR specifically addresses the foodservice sector (or "food-prepared-away-from-home"). Borrowing from the lessons of ECR, EFR has adopted some of the components of ECR while recognizing the unique nature of the foodservice supply chain.

Why should my company get involved?

EFR has the potential to achieve significant results for all members of the Canadian foodservice sector including:

• deliver $400 million in savings to the foodservice industry;
• provide better information management at every stage of the supply chain; and
• bring trading partners together to focus on adding value to the consumer and growing market share for the benefit of the entire foodservice sector.

Who runs this initiative?

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

What is the Steering Committee mandated to do?

The Steering Committee's objectives include:

To identify and develop best practices in industry-wide processes which, when implemented, will facilitate a more efficient supply chain.

To learn from other industry supply chain initiatives, such as ECR and EFR (U.S.), and identify their relevance to the foodservice sector.

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.

Can my company get involved in a project?

There are three subcommittees, each co-chaired by a senior distributor and manufacturer executive, that oversee the following projects:

1. Product Identification/Bar Codes: to implement and use standard identification codes as per industry 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.
3. Education/Communications: to provide the educational and communication framework in encouraging industry-wide adoption and understanding of EFR recommendations.

Why should my company use barcodes?

The Canadian EFR Initiative has identified over $400 million in potential savings to the foodservice sector assuming only manufacturers and distributors implement EFR practices and recommendations. Potential savings can be increased to $500 million if operator savings are included.

Bar coding represents one of the areas where significant benefits and savings can be realized within the foodservice supply chain. Implementation and use of bar coding technology provides different benefits for each member of the supply chain.

What are the benefits for operators?

• Overall reduction in paper based processes and increased data accuracy.
• Reduction of the time required in inventory management activities and simplification of the inventory management process.
• Increased inventory accuracy.
• Increased accuracy and efficiency in the receiving process (right product, right quantity).
• Improved data accuracy resulting in more reliable reports and statistics.
• Facilitation of the ordering and database management process through the use of standardized product identification codes.

What are the benefits for distributors?

• Increased efficiency in the ordering, reconciliation and billing process through the use of standardized product identification and Electronic Data Interchange.
• Improved product tracking both internally within a distribution facility and externally for product shipped to customers.
• Improved accuracy and efficiency in warehouse activities including improved receiving accuracy and matching against purchase order, and improved picking accuracy.
• Bar coding and standard product identification function as enabling tools for EC/supply chain processes, such as Vendor Managed Inventory (VMI) and Collaborative Forecasting and Planning (CPFR).

What are the benefits for manufacturers?

• Improved product traceability (food safety), especially when using encoded batch (lot) numbers and dates.
• Improved inventory control and accuracy.
• Facilitation of the ordering and database management process through the use of standardized product identification codes and the elimination of customer specific proprietary product numbers.
• Increased accuracy and efficiency in product picking and shipping (especially when combined with warehouse management systems and computer directed picking).
• Increased efficiency and accuracy in procurement, billing and reconciliation processes through standard product identification and electronic communication (EDI).

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