CGT Inside News - 12/20/2006

7-Eleven Honors Key Suppliers with Retailer Initiative Awards

December 20, 2006 - 7-Eleven Inc. announces winners of its 2006 Retailer Initiative Awards, which formally recognize those suppliers that excelled at helping 7-Eleven meet its convenience customers' changing needs through team merchandising, demand-chain solutions, cost of goods, category management and contributing to creative advertising and promotional programs. Candidates were nominated by 7-Eleven's merchandising and operations teams and judged on business activities in 2005. The award recipients were chosen by the 7-Eleven Awards Committee composed of senior executive team members. And the awards go to:

UST Inc.

7-Eleven recognizes UST for its outstanding efforts in customer focus, demand-chain support and cost-of-goods management during 2005. UST is a holding company for its principal subsidiaries U.S. Smokeless Tobacco Company, makers of Copenhagen and Skoal and International Wine & Spirits Ltd. "UST has had a positive impact on our organization with a collaborative approach to merchandising their high-quality products and maximizing in-store promotions to provide superior value to customers," says 7-Eleven President and CEO Joe DePinto. "This well-deserved award is a result of UST management's ongoing support of the 7-Eleven Retailer Initiative strategy and their leadership, passion and overall efforts to grow the moist smokeless tobacco category."

BakeFresh Company LLC

7-Eleven honors BakeFresh, the producer of fresh bakery items, as a team-merchandising leader for 7-Eleven operations in the Chesapeake and New England regions. The supplier established production efficiency and execution, and quality assurance standards that serve as best practices for other 7-Eleven bakery partners. Also, the company created additional training tools for its manufacturing locations focused on improving product quality, freshness and sales. "The BakeFresh team uses its innovative expertise to provide solutions for new product introductions and improves service to our stores with only the latest equipment and technology in their facilities," says Cynthia Davis, senior vice president of merchandising, 7-Eleven.

LEGO Supports Multi-Channel Direct-to-Consumer Initiative

LEGO Brand Retail Inc., the direct-to-consumer sales division of the LEGO Group, signs a five-year agreement with PFSweb Inc., a global provider of web commerce and business process outsourcing solutions, to support order fulfillment of its online store, www.shop.lego.com and its Shop at Home catalog in North America. PFSweb will integrate its technology platform with the LEGO web commerce application using the PFSweb Entente Integration Suite to fulfill LEGO orders reaching online and catalog customers throughout the United States and Canada. "We needed a proven, specialized business partner with the capability to deliver world-class services based on industry best practices and standards, specifically aimed at improving the quality, productivity and reliability of the inventory management and distribution of LEGO products," says Matt Harker, vice president operations, LEGO Brand Retail. "Critical to the selection process was finding a partner who offered value-added strategic thought leadership and a technology platform that would enhance our total channel performance through advanced warehouse management systems, and PFSweb rose to the top."

Penn Traffic Renews Price and Promotion Solutions Agreement

The Penn Traffic Company, a food marketer in the northeastern United States, continues to develop and implement new strategies designed to generate sales and grow operating income in an increasingly competitive environment. These strategies include enhanced merchandising programs, improved store operations and reduced/contained costs. The company recently renewed its license for DemandTec Price to help grow margins within selected store product categories. Penn Traffic also added DemandTec TradePoint and DemandTec Promotion to more efficiently manage promotions with its vendor partners and to improve the effectiveness of every promotion executed. "Our results from DemandTec Price in the implemented categories were very positive. Based on these results, we plan a full-scale rollout of DemandTec Price across additional store product categories," says Greg Young, Penn Traffic's co-chief operating officer. "Furthermore, with the addition of DemandTec Promotion and DemandTec TradePoint, we expect to develop new, successful and highly strategic promotional strategies that will satisfy our customers and enhance our competitive position."

Colgate to Shed Household Bleach Brands

As part of its ongoing strategy to increase global focus on the more profitable oral and personal care businesses, Colgate-Palmolive Company agrees to sell its Latin American and Canadian bleach brands to The Clorox Company for $126 million plus inventory at cost at closing. The transaction includes the sale of the bleach brands Javex, Agua Jane and Nevex in Canada, Uruguay and Venezuela, respectively, and the license of the Ajax brand for bleach during a transition period in Colombia, the Dominican Republic and Ecuador. "As with the sale of our detergent businesses, this move divests a non-core business in favor of our oral and personal care businesses, which have more than double the rate of sales and profit growth in the countries affected," says Reuben Mark, Colgate's chairman and CEO.

GlaxoSmithKline Completes Acquisition of CNS

GlaxoSmithKline completes the acquisition of CNS Inc., the marketers of Breathe Right nasal dilator strips and FiberChoice dietary fiber supplements. Following CNS shareholder approval, GSK acquired all outstanding CNS shares for $37.50 in cash per share, valuing the transaction at approximately $566 million. CNS reported sales of $122.2 million for the 12-month period ended September 30, 2006, an increase of 20 percent over the previous 12-month period ended September 30, 2005. The U.S. market generates 86 percent of the company's sales. Breathe Right branded products are marketed in 27 countries while FiberChoice fiber supplements are marketed solely in the United States. "We are very pleased to welcome this outstanding business into the GSK Consumer Healthcare family," says John Clarke, president, GSK Consumer Healthcare. "CNS is a well-managed company, and its brands fit with our growth strategy and are great additions to our portfolio. The opportunity for growth through geographic expansion and pipeline innovation makes this acquisition an exciting prospect."

Best Buy Bolsters Field Technician Capabilities
Best Buy, specialty retailer of consumer electronics, computers and applications, selects Microsoft technologies to help its field technicians and consultants increase productivity and better serve consumers and small businesses. Best Buy is now using 3,000 Windows Mobile-powered Smartphones for its 11,000-member Geek Squad service team to schedule and route customer service calls and to access Internet-based technical content. In addition, Best Buy For Business -- a growing unit of more than 1,000 consultants who sell, implement and support solutions for small-business customers -- is now using Microsoft Dynamics CRM 3.0 in-house to support its complex sales cycle.

Virgin Megastores Expands Digital Marketing Rollout
To enhance the shopping experience and reinforce brand recognition, Virgin Megastores introduces its digital marketing solution from Epson in two stores, one on each coast of the United States. The new installations project music videos onto large walls -- 16 feet wide at Virgin's flagship store in Hollywood, California, and 18 feet wide in the Downtown Disney, Florida, store -- that are designed to entertain shoppers and, at the same time, influence their purchasing decisions. Another new digital display from Epson and ProDisplay USA is situated in the storefront window of Southern California's Goodtimes Skate Shop. By capitalizing on its location, visible from the Pacific Coast Highway and the freeway, the 20-year-old store expects its extreme video to attract the attention of both its loyal customers and its younger generation target market.

SAP Delivers New Transportation Management Functionality

SAP AG announces the immediate availability of new transportation management functionality for mySAP Supply Chain Management (mySAP SCM). Building on SAP's existing transportation management software, the new functionality delivers enhancements in the areas of ocean shipping management and transportation planning. These enhancements are expected to help companies increase visibility and control of shipments globally while reducing the costs associated with transportation management by making the process more flexible and dynamic.

ILOG Signs Agreement with IBM for Semiconductor Solutions

Under a new agreement, IBM will market ILOG Fab PowerOps (FPO), ILOG's solution for semiconductor production scheduling, to its manufacturing execution systems (MES) customers, among others. IBM will market ILOG FPO under the ILOG brand name to its installed base of SiView, LCDView and other View MES product customers. The agreement is expected to result in new product revenue opportunities and service engagements for both companies. The services will be provided through IBM Technology Collaboration Solutions and IBM Global Business Services, with support from ILOG's Professional Services group.

Nike Names Four Vice Presidents

Nike Inc. announces four new vice presidents in corporate and brand roles. Dermott Cleary becomes vice president of sport culture and category marketing. He was most recently global brand director for sports culture. Diana Crist is now global apparel vice president of merchandising operations. Christ was general manager for the Europe region's women's business from 2001 to 2003 and served as global apparel operations director from 2003 to 2006. Larry Harper becomes vice president of U.S. geographical business units. He joined Nike in 1999 and has held various roles at the company, including national sales manager and general manager for Chicago and Los Angeles. Bob Woodruff is now vice president and treasurer. He joined Nike in 1996 as director of global cash and banking, following finance positions at RJR Nabisco, The Pittston Company, Merrill Lynch and Citibank. Before becoming treasurer in 2005, he served as director of capital planning. The promotions are intended to reflect the company's continued management strength and commitment to developing talent.

Tupperware Promotes Chief Operating Officer

Effective January 1, 2007, Simon C. Hemus will become president and chief operating officer of Tupperware Brands. Hemus will have responsibility for day-to-day operations of all of the company's businesses while Rick Goings, chairman and CEO, will continue to focus on the company's strategy, leadership development and external relations. Hemus joined the company in December 2005 as group president of the International Beauty segment following the company's acquisition of the direct selling businesses of Sara Lee Corporation. While at Sara Lee, he served as the group president and CEO of the direct selling division for 13 years and prior to that worked with Goings at Avon as a senior officer in multiple markets. In conjunction with this change, Christa M. Hart, currently executive vice president, strategy and business development, will become executive vice president, beauty, with responsibility for most of the businesses that previously reported to Hemus.

Developing the Master Plan for your Enterprise

Four steps to creating a multi-year technology plan that will transform your company

By Mike Cummings, Consumer Industry Vice President, EDS

Consumer packaged goods (CPG) companies face new challenges as industry growth slows. The cost of raw materials is increasing. Consumer segments and new product categories are proliferating. Global supply chains, government regulations and the explosion of data are testing the limits of business systems. CPG companies will either get their arms around these issues or get left behind.

Developing a comprehensive technology strategy that aligns with your business goals provides the necessary foundation to address these issues and rejuvenate growth. Here's a four-step approach:

• Create a clear vision - Determine your market position based on your view of the future. Then design a technology road map to help take you there. This will require an assessment of your company's current situation relative to market trends and strategic direction.
  
  Are you in the midst of an acquisition? Are you trying to penetrate emerging markets? Are you launching new products to new customer segments? Do you have the ability to integrate the many customer and data touch points into an intelligent action plan?
  
  Technology is the common thread that enables companies to manage complexity and drive growth-building activities. Speed to market, promotional planning, understanding consumer behavior, performance management and many other processes depend on information flow and collaboration among suppliers, customers and partners. This, in turn, depends on a solid technology foundation to pull it all together.
  
  
• Follow a methodology - Increased business complexity, whether it stems from mergers and acquisitions or dealing with global supply chains, often breeds inconsistent technology practices. Managers tend to hire their own consultants, establish their own processes and build their own information management systems without regard to the rest of the enterprise, adding to what may already be a complex environment. The result is a fragmented information technology (IT) system that breeds more complexity, rising costs and difficulty in generating speed to market.
  
  There is no single, quick fix for optimizing a company's IT systems. Ultimately, every company should reduce the size and complexity of its IT systems. Every component of an IT system can be categorized as "keep," "retire," "modernize" or "outsource." Retiring and modernizing applications can help reduce complexity and increase market responsiveness. Modernizing legacy applications can yield up to 30 percent in savings.
  
  A disciplined methodology that takes into account business, application and technology architecture, organizational alignment and governance will ensure everyone is on the same page. It provides the rules of engagement for tackling current issues and for working toward your future vision. The end result is a leaner, stronger system that can better align with business goals and deliver value to every part of the enterprise.
  
• Establish a governance model - To be successful, an IT governance model should be established to guide companies through the maze of internal requests for technology services and ensure a reliable, cost-effective, regulation-compliant, secure IT transformation. Many enterprises have uncoordinated governance mechanisms and patch up problems as they arise. To succeed, IT governance must be designed around the interests and needs of the enterprise with buy-in from all senior managers.
  
  A formal governance model also brings added value when outsourcing IT to multiple vendors. In a multi-vendor environment, pre-established interface standards and processes will help deal with additional complexity, the integration of disparate systems and problem resolution. Using a governance model makes it much easier to hold each vendor responsible for delivering against its own service level agreements.
  
• Develop your ecosystem - Your business is part of an ecosystem comprised of business users, suppliers, outsourcing partners, retailers, associations, analysts and more. Developing a strong ecosystem offers increased opportunities for collaboration, innovation and new business.
  
  For example, an extended ecosystem with suppliers around the globe can help you penetrate emerging markets, such as China, India and others. Also, suppliers can be great contributors to new product development as well as provide innovations to existing brands. Retailers are constantly fine-tuning transactional data to understand and anticipate consumer preferences. Your technology strategy should enable you to link with your partners and benefit from sharing complementary data. Be sure to select partners that fit within your technology foundation and can help you achieve your vision.

A well thought-out IT master plan is essential for CPG companies to compete effectively. When done right, it can pave the way for managing complex data systems, mining rich customer insights and hitting narrow windows of market opportunity.

Mike Cummings is vice president of EDS' Consumer Industry segment, which provides information technology services to some of the most recognizable brands within the consumer goods industry.  With a more than 30-year career in the consumer goods industry, Cummings has extensive industry knowledge and experience in consulting, project management and execution of comprehensive IT services.