A supermarket chain with a social conscience Far Eastern Economic Review, 2003

Transcription

1 Standards driving Process Improvement 1 - Mr Gerry Lee Managing Director (Business Groups) April 2014 A supermarket chain with a social conscience Far Eastern Economic Review, NTUC Welcome Supermarket, first co-op supermarket Launched by the National Trades Union Congress amidst global oil crisis 1983 NTUC FairPrice: Merger between Singapore Employees Co-operative and NTUC Welcome Co-operative Ltd Social Mission: To moderate the cost of living in Singapore 2 1

2 FairPrice Store Universe S/N Formats Total No. of Stores Total A Shared Vision and Mission Our Vision To be Singapore s leading world-class retailer with a heart. Our Mission To provide customers with the best value, quality products and excellent service. Be a preferred employer, to moderate the cost of living in Singapore, and serve the needs of our members, the labour movement and the community. Best Place to Shop Best Place to Work Best Corporate Citizen 4 2

3 Why does FairPrice Adopt Standards? 5 Because we want to Provide fresh, safe and quality food to all our customers Continue to lead the standards development for the retail industry, as an industry leader. Cement our reputation as a trusted brand 6 3

4 And deliver on our Brand Promise Standards help us to: FAIRPRICE BRAND PROMISE Quality Value Service provide consistently high quality products lower cost of products, and improve value ensure that excellent service is consistently delivered to customers 7 To achieve this, we work closely with our partners and suppliers GOVT & INDUSTRY BODIES To develop, implement & uphold quality standards Part of Working Group to develop & implement Cold Chain Management Standards for Milk & Dairy Products in 2002 Involved in Efficient Consumer Response (ECR) Singapore & helped develop ECR Pallet Standard Singapore Cold Chain Centre, set up in 2004, is the resource centre for Cold Chain Management 8 4

5 To achieve this, we work closely with our partners and suppliers SUPPLIERS Food producers, manufacturers, importers and distributors have to adopt food safety practices which include the following: proper management of cold chain from source, to delivery, to supermarket shelves; educating their employees; ensure compliance of the stringent standards and processes in handling, storage & delivery 9 Food Safety Standards 5

6 ISO/HACCP 1998: First to Implement ISO : First to Implement HACCP, a basic food safety standard 2012: First supermarket retailer to achieve the ISO 22000, a more stringent food safety standard 11 Food Safety & Quality Management Systems Integrated Food Safety & Quality Management Systems 6

7 Two Food Safety Audit Programs 13 Internal Quality Audit Checks in the Backyard Objective - Verify implementation of ISO and ISO 9001 quality standards at branches. Format & Methodology - Conducted by our Food Safety & Quality (FSQ) department twice a year - Covers backend procedures (backyard, selling floor and office) of branch operations - Includes store observations and interviewing of the responsible personnel Retail Quality Assessment Checks at the Store Front Objective - Assess branches on their compliance to Good Retail Practices, and also on their housekeeping standards and food safety on the trading floor. Format & Methodology - Conducted monthly at branches, with results tracked and reported in branch s monthly report - Covers selling area/store front of each branch only Standards that we have adopted 7

8 In addition to ISO 9001 & ISO 22000, we have adopted the following standards Food Related Standards 1) CP 95 : 2002 Cold Chain Management for Milk & Dairy Products 2) SS 552 : 2009 Cold Chain Management for Chilled Pork 3) NOAP NTUC FairPrice Organic Assurance Programme Logistics Related Standards 4) ECR Pallet Standard 5) Carton Barcode Standard 15 1)CP 95 : 2002 Cold Chain Management for Milk & Dairy Products Transport Transport Transport DAIRY FARMS DAIRY PLANTS RETAIL OUTLETS CONSUMERS With this standard, the expiry date was extended from 18 days to 21 days with the good quality of chilled products maintained during the pilot. 16 8

9 1) CP 95 : 2002 Display of Milk & Dairy Products in Chiller Pasteurised and homogenised full-cream milk, skimmed milk, flavoured milk, creams, cheeses, butters and yogurts should be kept at a temperature of 4 C or below except when displayed in open-concept designed chillers where the temperature should not exceed 5 C. 17 1) CP 95 : 2002 Display of Ice Cream in Freezer Ice-cream to be stored at or below -18 C except when displayed in open-concept designed chest-type freezers where the temperature should not exceed -15 C. 18 9

10 2) SS 552: 2009 Cold Chain Management for Chilled Pork Transport Transport Transport PIG FARMS ABATTOIR PROCESSING /DEBONING RETAIL 19 2) SS 552 : 2009 Deboning and Cutting Plant Overseas Only AVA approved countries and abattoirs including de-boning establishments are allowed to export chilled pork to Singapore. All abattoirs shall be HACCP certified and approved by the authorities

11 2) SS 552 : 2009 Fresh Pork in Display Chillers Pork is received in chilled condition & displayed in chillers and at a temperature of 0-4 C. 21 Benefits of Cold Chain Management 22 a. Proper management of cold chain is critical to uphold the safety of consumers and protection of public health b. Helps to clarify any uncertainty or misconception concerning the handling, safety, quality and wholesomeness of products throughout the supply chain c. Maintain good quality products, reduce wastage, improve productivity, increase customer confidence, and increase sales - e.g. we can now source chilled pork from as far away as Canada, thus increasing sources of supply, and keeping costs low - e.g. increased shelf life for chilled milk while preserving the nutritional and sensory quality of the product 11

12 3) NTUC FairPrice Organic Assurance Programme (NOAP) 23 FairPrice s very own quality assurance programme for Housebrand Organic products (Pasar), established in July st quality assurance programme in Singapore that assures the organic integrity of produce along its entire supply chain. NOAP was developed with input from Agrifood Technologies, a subsidiary of AVA Singapore, based on guidelines set by international bodies Codex and ifoam. The products are also regularly audited by Agrifood Technologies to ensure they meet NOAP standards. 3) NTUC FairPrice Organic Assurance Programme (NOAP) All produce is sourced from Organic Farms certified by Thailand s Department of Agriculture. Range includes more than 45 types of vegetables, including Asian varieties such as chye sim, and kai lan

13 3) NOAP Cold Chain Management Supplier Farm Packinghouse Transporter Distribution Centre NTUC FairPrice Retail Outlets Consumers 25 4) Carton Barcode Standard The primary barcode standards used in industry are: EAN 13 ISO/IEC 16390: 2007 (or ITF i2of5) ITF-14 Before barcode implementation, orders were manually recorded and inventorized. Price labels were done using gun tags. Fairprice was the first to implement carton barcoding in

14 4) Carton Barcode Standards Flow of Cartons from Warehouse (GLS) to Store INBOUND CARTONS PUTAWAY OF CARTONS PICKING & SORTING DELIVERY TO STORES 1) Supplier deliver cartons to Warehouse 2) Warehouse scans carton barcodes (ITF14) with handheld RF scanners. Info gets captured into Warehouse Management System (WMS), which assigns locations to each pallet of cartons. 3) Cartons are picked and placed on the conveyor belt auto sortation system, which has barcode scanning to assign the carton to the appropriate sorter lane. 4) Cartons are packed & delivered to store 27 4) Benefits of Carton Barcode Standards *Implementation of Carton Barcode Standards at our Grocery Logistics of Singapore (GLS) Distribution Centre has helped to: a) Improve operational efficiency - accuracy increased from 85% to 97% 28 b) Reduce manpower needs - 50% improvement in staff productivity c) Improve assets utilisation - 18% reduction in use of space d) Increase volume of grocery items handled - Today GLS handles >65000 cartons / day *ISO Pilot Report on Economic Benefits of Standards Implemented by NTUC FairPrice, 30 March

15 5) ECR Pallet Standardization The Pallet Standardization project was undertaken by SPRING Singapore in FairPrice was the 1 st adopter in Objective was to improve operational efficiency and to rationalize the 13 sizes of pallets in use by the FMCG industry in Singapore. Recommendation was to adopt the 4-way 1000mm x 1200mm pallet as the standard for the industry. 29 5) ECR Pallet Standardization Standardization has a) increased labour productivity b) improved the handling of goods c) optimized the use of storage d) reduced delivery costs and e) facilitated the automation of warehouse operations. More than 300,000 standard pallets are in use currently by the industry, resulting in savings of S$7.8m for the FMCG industry as a whole in

16 How has FairPrice Benefited from Standards? 31 Estimated Savings from Implementation of Standards Standards Cold Chain Management for Milk & Dairy Cold Chain Management for Chilled Pork Affected Business Functions Procurement, warehousing & distribution, retail Total Financial Impact on BF (SGD$) 141,677 Procurement, retail 641,639 Carton Barcode, Standard Pallet Warehousing & distribution 3,733,151 Total 4,561,467 Source: Economic benefits of standards study, ISO Pilot Project led by SPRING Singapore, Oct 2010-March

17 Benefits to Customers Customers get to enjoy High quality products High food safety standards Competitive prices High customer satisfaction This translates to higher sales for FairPrice. 33 Challenges Faced & Looking Ahead Costs involved in testing and implementing standards Some inertia in getting our partners and suppliers to implement new processes and standards. Will explore possibilities to adopt more standards to further enhance product safety and quality Equipped with the latest technology in warehouse management systems, our new High-Tech Distribution Centre (DC) in Benoi will further increase our efficiency and boost productivity

18 Summary 35 SUMMARY As a leading supermarket retailer, FairPrice prides itself in being an early adopter of standards, which is in line with our Brand Promise of providing Quality, Value, Service. Standards have benefited Fairprice significantly and helped us to increase our productivity through operational efficiency, reduced wastage, leading to cost savings and increased sales. 36 Development & implementation of standards show interconnectivity throughout the value chain. The industry has to work together to reap the full benefits of standards. 18

19 Thank you 37 19