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WASHINGTON -- The Food Marketing Institute (FMI) and the Grocery Manufacturers Association (GMA) yesterday issued recommendations for reducing the volume of unsaleable products, chief among them being a stronger collaboration between retailers and manufacturers.
Developed by the Unsaleables Leadership Task Force, the new report, "Improving Unsaleables Management Business Practices -- Joint Industry Recommendations," outlines how manufacturers and retailers should work together to fix the sources of unsaleables and improve supply chain efficiencies.
"Despite the advances we have made in supply chain technologies and efficiencies, the costs of unsaleables continue to increase," said GMA senior director of industry affairs Karin Croft. "To change this situation, manufacturers and retailers must work together to identify and correct the root causes of unsaleable products."
Key recommendations include:
--Processing unsaleable products through reclamation centers.
--Using product condition data to better understand where and how damage occurs in the supply chain.
- Expanding current data synchronization and registration initiatives to help reduce unsaleable product volume.
-Continuing to use the voluntary guidelines and tools published in the "Joint Industry Report: Product Reclamation Centers in 1990" -- now known as the JIR -- for efficient product reclamation.
"FMI and its retailer/wholesaler members are committed to working with manufacturers to reduce the cost of unsaleables and enhancing distribution processes," said FMI senior director of industry relations Patrick Walsh. "This new report offers a direction for reaching our shared goals."
Since the first industry benchmarks were published in 1995, the average reported rate of unsaleables has grown from 0.75 percent to 1.06 percent in 2004. The task force was formed from the Joint Industry Unsaleables Steering Committee at the request of the FMI and GMA boards of directors to develop new recommendations for lowering the rate of unsaleables. It comprises representatives from more than 30 manufacturers and retailers. The group completed its work in November 2005 and presented its recommendations at the Joint FMI/GMA board meeting Jan. 22.