10 10 kl ecr presentation

New Ways of Working TogetherPat Conklin, Chief Customer Officer, Procter & Gamble- Asia

The light bulb was not invented from continuous Innovation of a Candle

DRAFT V-9 July 2010

• We have been talking about Collaborative Commerce and Collaboration for years.

• Efficient Consumer Response was founded on the Strategies of:– Efficient Assortment– Efficient Replenishment– Efficient Promotion– Efficient New Item Introduction

Yet today’s Supply Chain is STILL filled with waste….

The case for change

The Case for Change

““Stores are over SKU’d”Stores are over SKU’d”

1980 2,899

2005 10,651

2007 85,000

1987 24,500

1997 30,000

2007 45,000

New SKUs New SKUs RegisteredRegistered

Average Items in a Average Items in a Typical SupermarketTypical Supermarket

The Case for Change

Source: Global Commerce Initiative New Ways of Working Together

Inventories are Inventories are too hightoo high“There is too much of the stuff consumers don’t want and not

enough of what they do.”

The Case for Change

Out-of-stocks Out-of-stocks persistpersist

The Case for Change

Trading partners Trading partners continue to focus on continue to focus on business minutiae business minutiae

instead of shoppersinstead of shoppersThe Case

for Change

“The best way to predict the future is to invent it.”

– Alan Kay, noted computer scientist

Forces and trends that have the potential

to significantly alter the industry’s value chainover the next decade.

The industry must Develop New Ways of Working Together

Trading Partners must more readily and freelyShare Information

In their Bi-Lateral relationships

The industry must Redefine the 2016 Value

Chain

Manufacturers Retailers

JOHNSON & JOHNSON CARREFOUR

NESTLÉ KROGER CO.

PROCTER & GAMBLE METRO GROUP

KRAFT FOODS WAL-MART

UNILEVER TESCO

J.M. SMUCKER WEGMANS

COCA-COLA SAFEWAY

Legal Counsel

Brenda C. BARNESChairman & Chief Executive OfficerSARA LEE CORPORATION

Warren F. BRYANTChairmanNATIONAL ASSOCIATION OF CHAINDRUG STORES

Jean-Paul AGONChief Executive OfficerL’OREAL

Eckhard CORDESChairman of the Management Board& Chief Executive OfficerMETRO AG

Colleen GOGGINSWorldwide Chairman, Consumer GroupJOHNSON & JOHNSON

Bob MCDONALDChairman, President & Chief Executive OfficerTHE PROCTER & GAMBLE COMPANY

Sir Terry LEAHYChief Executive OfficerTESCO PLC

Stefano PESSINAExecutive ChairmanALLIANCE BOOTS

Paul POLMANChief Executive OfficerUNILEVER

New Ways of Working Together –A Consumer Goods Forum Initiative

Lars OLOFFSONChief Executive OfficerCARREFOUR GROUP

John RISHTONChief Executive OfficerRoyal Ahold

Mike DUKEPresident &CEOWal*Mart

Project Leaders

Michael KOKGroup CEODairy Farm

Motoki OZAKI President Kao

http://walmartstores.com/Media/Cache/rx3404_6bfi8bfj8efoii8zfpni8tyfhxxxxxx8u9fi87fdk8atfxs3aw8tufhxxxxxx.jpg

http://www.gmabrands.com/publications/iar/2007/Pictures%20Vol%201%20No%208/Dairy%20Farm%27s%20Michael%20Kok.jpg

http://www.google.com/imgres?imgurl=http://www.worldeyereports.com/reports/2009/cd_japan_2009/japan09a.jpg&imgrefurl=http://www.worldeyereports.com/reports/2009/cd_japan_2009/2009_japan09.aspx&usg=__sG0jirkCsMvjeUXrNqfExVZkAgA=&h=114&w=115&sz=7&hl=en&start=1&tbnid=ukAvOaykD8g3FM:&tbnh=86&tbnw=87&prev=/images%3Fq%3DMotoki%2BOzaki%26hl%3Den%26sa%3DG%26gbv%3D2%26tbs%3Disch:1&itbs=1

Industry Track (Collaborate)

New Ways of Working TogetherEliminate supply chain disruptions, enable growth

Best Practices/ Standards

Documentation, Education,

Communication

Guiding Principles and Frameworks

Share Results

• StrategyAlignment

• JAG Framework

Focus on

Consumer

• Common Goals & Measures

• Information Sharing*

• EPC

• Data Sync

Connected Business

Information

• Knowledge, Skills & Capabilities

• Incentives & Rewards

• organisation Design

Prepare People for New World

• Sustainability

• Cross Industry Integration

• Integrated Supply Chain

Share Our Supply Chain

Trading Partner Track (Competitive Advantage)

*Note: Utilizations of Industry Standards

Strategic Issues Between Trading

Partners

Common Goals, Common Measures

Specific Measures & Priorities

Other Data Sharing

Opportunities

Consumer/ Shopper

Satisfaction





Communication


Share Results



• EPC

• Data Sync

Connected Business

Information





• Sustainability







Partners



Other Data Sharing

Opportunities

Consumer/ Shopper

Satisfaction• StrategyAlignment

• Joint Business Planning

Focus on

Consumer

• Encourage bi-lateral collaboration– Based on clear, fact-based

understanding of market context and trends

– (P&G) Establish True Scorecards based on trading partners strategies as well as operational and financial objectives

• Embrace joint long-term planning– Annual planning is often insufficient– IP protection and trust

• Implement longer term planning processes

Focus on

Consumer

• Five step process building a three-year rolling JAG plan

• Annual milestones to be set• Program reviewed

throughout the year• Buyer-Seller accountable for

functional liaison, planning coordination, agreement and execution follow-up

• Cross-functional teams drive analysis and planning to support Buyer-Seller

JAG process

• Help trade partners build rationale for their growth strategy

• Demonstrate the objective selection of relevant growth levers

• Allow reliable quantification of the opportunities and expected ROI

Fact based

Step 5Monitor &

adapt

Step 1Review the economic and shopper environment

Conditions for success

Step 2Review

sales and agree on

prioritized growth levers

Step 3Define and agree on

3-year JAG plan

Step 4Execute the

JAG plan






JAG process






JAG processJAG process




Fact based




Fact basedFact based

Step 5Monitor &

adapt

Step 1Review the economic and shopper environment

Conditions for successConditions for success

Step 2Review

sales and agree on

prioritized growth levers

Step 3Define and agree on

3-year JAG plan

Step 4Execute the

JAG plan





Communication


Share Results


• JAG Framework

Focus on

Consumer





• Sustainability







Partners



Other Data Sharing

Opportunities

Consumer/ Shopper

Satisfaction• Common Goals & Measures


• EPC

• Data Sync

Connected Business

Information

• Common Goals and Common Measures– Based on a common language

• GS1 “Trading Partner Performance Management” Standard

• Global Data Synchronization

Connected Business

Information





Communication


Share Results


• JAG Framework

Focus on

Consumer



• EPC

• Data Sync

Connected Business

Information

• Sustainability







Partners



Other Data Sharing

Opportunities

Consumer/ Shopper

Satisfaction• Knowledge, Skills & Capabilities




Change

Vision Skills Measures /Rewards Resources

ActionPlan

Change

Skills Measures /Rewards Resources

ActionPlan Confusion

Vision Measures /Rewards Resources

ActionPlan

Anxiety

Vision Skills ResourcesActionPlan

GradualChange

Vision Skills Measures /Rewards

ActionPlan

Frustration

Vision Skills Measures /Rewards Resources False

Starts

Five Elements of Change?


• Understand the Barriers and Enablers to long term, shopper focused business planning

• Transform people performance incentives and rewards

• Build knowledge, skill and capability sets

• Design organisational structure around consumer needs and drivers






Communication


Share Results


• JAG Framework

Focus on

Consumer



• EPC

• Data Sync

Connected Business

Information








Partners



Other Data Sharing

Opportunities

Consumer/ Shopper

Satisfaction• Sustainability




• Industry and trading partners must do things differently

• Adopt more sustainable business practices

• Collaborative Transport Management, Empty Miles


An Integrated Approach to Better Business Results

• Focus on the Consumer will not work if goals and measures are not shared, or if supporting rewards and structures are not in place

• Connect our Business will not work if the connection point is not the shopper or if there are no mutual goals or the supply chain is still viewed as “yours versus mine”

• Prepare our People will be insufficient if there is not a clear, shopper focused business plan focusing the organization, or if there are not the common goals, common measures and information visibility to act on.

• Share our Supply Chain will not be possible without understanding how every decision impacts the shopper, or if the way we measure success is different. Too often we optimize components of the supply chain, but sub-optimize the whole


• JAG Framework

Focus on Consumer



• EPC

• Data Sync

Connected Business

Information





• Sustainability




New Ways of Working Together will require:

– Leaders who inspire by example– Honesty, Integrity and Credibility– Transformation of Business information

• Visible• Connected• Accurate• Informative• Actionable• Relevant

So, what do we do about it?

The NWWT Opportunity• Take responsibility for the current state• Expand your view to include all stakeholders• Collaborate effectively across the supply chain in

the name of the customer experience.• Change outdated structures.• Modify incentives or rewards that do not result in

behaviors that positively impacts the consumer.• Seek to understand and adjust non-compatible

processes.

So, what do we do about it?

10 10 kl ecr presentation

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