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New Ways of Working TogetherPat Conklin, Chief Customer Officer, Procter & Gamble- Asia
The light bulb was not invented from continuousInnovation of a Candle
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The case for change
We have been talking about Collaborative Commerce andCollaboration for years.
Efficient Consumer Response was founded on the
Strategies of: Efficient Assortment
Efficient Replenishment
Efficient Promotion
Efficient New Item Introduction
Yet todays Supply Chain isSTILL filled with waste.
The Case
for Change
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Stores are over SKUStores are over SKUddNew SKUsNew SKUs
RegisteredRegistered
The Case
for Change
1980 2,899
2005 10,651
2007 85,000
Average Items in aAverage Items in a
Typical SupermarketTypical Supermarket
1987 24,500
1997 30,000
2007 45,000
Source: Global Commerce Initiative New Ways of Working Together
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Inventories areInventories are
too hightoo highThere is too much of
the stuff consumersdont want and not
enough of what they
do.
The Case
for Change
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OutOut--ofof--stocksstocks
persistpersist
The Case
for Change
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Trading partnersTrading partners
continue to focus oncontinue to focus onbusiness minutiaebusiness minutiae
instead of shoppersinstead of shoppers
The Case
for Change
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The best way to
predict the future isto invent it.
Alan Kay, noted
computer scientist
Forces and trends that have
the potential
to significantly alter theindustrys value chain
over the next decade.
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The industry must
Redefine the 2016 Value Chain
Trading Partners must more readily and freely
Share InformationIn their Bi-Lateral relationships
The industry must
Develop New Ways of Working Together
New Ways of Working Together
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Manufacturers Retailers
JOHNSON & JOHNSON CARREFOUR
NESTL KROGER CO.
PROCTER & GAMBLE METRO GROUP
KRAFT FOODS WAL-MART
UNILEVER TESCO
J.M. SMUCKER WEGMANS
COCA-COLA SAFEWAY
Legal Counsel
Eckhard CORDES
Chairman of the
Management Board
& Chief Executive Officer
METRO AG
Sir TerryLEAHY
Chief Executive
Officer
TESCO PLC
Stefano PESSINAExecutive
Chairman
ALLIANCE
BOOTS
Lars OLOFFSONChief Executive
Officer
CARREFOUR
GROUP
Mike DUKE
President &
CEO
Wal*Mart
New Ways of Working Together A Consumer Goods Forum Initiative Colleen GOGGINSWorldwide Chairman,
Consumer Group
JOHNSON & JOHNSONJean-Paul AGON
Chief Executive Officer
LOREAL
Bob MCDONALDChairman, President &
Chief Executive Officer
THE PROCTER &
GAMBLE COMPANY
Brenda C. BARNES
Chairman & Chief
Executive Officer
SARA LEE
CORPORATION
Project Leaders
Warren F. BRYANT
Chairman
NATIONAL
ASSOCIATION OF
CHAIN
DRUG STORES
John RISHTON
Chief Executive OfficerRoyal Ahold
Motoki OZAKI
President Kao
Michael KOK
Group CEODairy Farm
Paul POLMAN
Chief ExecutiveOfficer
UNILEVER
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New Ways of Working TogetherEliminate supply chain disruptions, enable growth
Industry Track (Collaborate)Best Practices/
Standards
Documentation,Education,
Communication
GuidingPrinciples andFrameworks
ShareResults
StrategyAlignment
JAGFramework
Focuson
Consumer
CommonGoals &Measures
InformationSharing*
EPC
Data Sync
ConnectedBusiness
Information
Knowledge,Skills &Capabilities
Incentives &Rewards
organisation
Design
PreparePeople forNew World
Sustainability Cross
IndustryIntegration
IntegratedSupply Chain
Share OurSupplyChain
Trading Partner Track (Competitive Advantage)Strategic IssuesBetween Trading
Partners
Common Goals,Common Measures
Specific Measures& Priorities
Other DataSharing
Opportunities
Consumer/
Shopper
Satisfaction
*Note: Utilizations of Industry Standards
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New Ways of Working TogetherEliminate supply chain disruptions, enable growth
Industry Track (Collaborate)Best Practices/
Standards
Documentation,Education,
Communication
GuidingPrinciples andFrameworks
ShareResults
CommonGoals &Measures
InformationSharing*
EPC
Data Sync
ConnectedBusiness
Information
Knowledge,Skills &Capabilities
Incentives &Rewards
organisation
Design
PreparePeople forNew World
Sustainability Cross
IndustryIntegration
IntegratedSupply Chain
Share OurSupplyChain
Trading Partner Track (Competitive Advantage)Strategic IssuesBetween Trading
Partners
Common Goals,Common Measures
Specific Measures& Priorities
Other DataSharing
Opportunities
Consumer/
Shopper
Satisfaction StrategyAlignment
JointBusinessPlanning
Focuson
Consumer
*Note: Utilizations of Industry Standards
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Encourage bi-lateral collaboration
Based on clear, fact-basedunderstanding of market context andtrends
(P&G) Establish True Scorecards basedon trading partners strategies as well asoperational and financial objectives
Embrace joint long-term planning Annual planning is often insufficient
IP protection and trust
Implement longer term planningprocesses
Focuson
Consumer
Five step process building athree-year rolling JAG plan
Annual milestones to be set Program reviewed
throughout the year
Buyer-Seller accountable forfunctional liaison, planningcoordination, agreement and
execution follow-up Cross-functional teams drive
analysis and planning to
support Buyer-Seller
JAG process
Help trade partners buildrationale for their growthstrategy
Demonstrate the objectiveselection of relevant growth
levers
Allow reliable quantificationof the opportunities andexpected ROI
Fact based
Step 5Monitor &
adapt
Step 1
Review the economic andshopper environment
Conditions
for success
Step 2Review
sales and
agree onprioritized
growthlevers
Step 3
Define andagree on
3-yearJAG plan
Step 4
Execute the
JAG plan
Five step process building athree-year rolling JAG plan
Annual milestones to be set Program reviewed
throughout the year
Buyer-Seller accountable forfunctional liaison, planningcoordination, agreement and
execution follow-up Cross-functional teams drive
analysis and planning to
support Buyer-Seller
JAG process
Five step process building athree-year rolling JAG plan
Annual milestones to be set Program reviewed
throughout the year
Buyer-Seller accountable forfunctional liaison, planningcoordination, agreement and
execution follow-up Cross-functional teams drive
analysis and planning to
support Buyer-Seller
JAG processJAG process
Help trade partners buildrationale for their growthstrategy
Demonstrate the objectiveselection of relevant growth
levers
Allow reliable quantificationof the opportunities andexpected ROI
Fact based
Help trade partners buildrationale for their growthstrategy
Demonstrate the objectiveselection of relevant growth
levers
Allow reliable quantificationof the opportunities andexpected ROI
Fact basedFact based
Step 5Monitor &
adapt
Step 1
Review the economic andshopper environment
Conditions
for success
Conditions
for success
Step 2Review
sales and
agree onprioritized
growthlevers
Step 3
Define andagree on
3-yearJAG plan
Step 4
Execute the
JAG plan
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13/22
New Ways of Working TogetherEliminate supply chain disruptions, enable growth
Industry Track (Collaborate)Best Practices/
Standards
Documentation,Education,
Communication
GuidingPrinciples andFrameworks
ShareResults
StrategyAlignment
JAGFramework
Focuson
Consumer
Knowledge,Skills &Capabilities
Incentives &Rewards
organisation
Design
PreparePeople forNew World
Sustainability Cross
IndustryIntegration
IntegratedSupply Chain
Share OurSupplyChain
Trading Partner Track (Competitive Advantage)Strategic IssuesBetween Trading
Partners
Common Goals,Common Measures
Specific Measures& Priorities
Other DataSharing
Opportunities
Consumer/
Shopper
Satisfaction CommonGoals &Measures
InformationSharing*
EPC
Data Sync
ConnectedBusiness
Information
*Note: Utilizations of Industry Standards
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Common Goals and
Common Measures
Based on a common language
GS1 Trading PartnerPerformance Management
Standard
Global Data Synchronization
ConnectedBusinessInformation
N W f W ki T th
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New Ways of Working TogetherEliminate supply chain disruptions, enable growth
Industry Track (Collaborate)Best Practices/
Standards
Documentation,Education,
Communication
GuidingPrinciples andFrameworks
ShareResults
StrategyAlignment
JAGFramework
Focuson
Consumer
CommonGoals &Measures
InformationSharing*
EPC
Data Sync
ConnectedBusiness
Information
Sustainability Cross
IndustryIntegration
IntegratedSupply Chain
Share OurSupplyChain
Trading Partner Track (Competitive Advantage)Strategic IssuesBetween Trading
Partners
Common Goals,Common Measures
Specific Measures& Priorities
Other DataSharing
Opportunities
Consumer/
Shopper
Satisfaction Knowledge,Skills &Capabilities
Incentives &Rewards
organisation
Design
PreparePeople forNew World
*Note: Utilizations of Industry Standards
Five Elements of Change?
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Change
Vision SkillsMeasures /
Rewards ResourcesAction
Plan Change
SkillsMeasures /
Rewards ResourcesAction
Plan
Confusion
VisionMeasures /
Rewards ResourcesAction
PlanAnxiety
Vision Skills ResourcesAction
PlanGradual
Change
Vision Skills Measures /Rewards ActionPlan Frustration
Vision SkillsMeasures /
Rewards ResourcesFalse
Starts
Five Elements of Change?
PreparePeople forNew World
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Understand the Barriers andEnablers 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
PreparePeople forNew World
New Ways of Working Together
8/6/2019 Mr Patrick G. Gonklin
18/22
New Ways of Working TogetherEliminate supply chain disruptions, enable growth
Industry Track (Collaborate)Best Practices/
Standards
Documentation,Education,
Communication
GuidingPrinciples andFrameworks
ShareResults
StrategyAlignment
JAGFramework
Focuson
Consumer
CommonGoals &Measures
InformationSharing*
EPC
Data Sync
ConnectedBusiness
Information
Knowledge,Skills &Capabilities
Incentives &Rewards
organisation
Design
PreparePeople forNew World
Trading Partner Track (Competitive Advantage)Strategic IssuesBetween Trading
Partners
Common Goals,Common Measures
Specific Measures& Priorities
Other DataSharing
Opportunities
Consumer/
Shopper
Satisfaction Sustainability Cross
IndustryIntegration
IntegratedSupply Chain
Share OurSupplyChain
*Note: Utilizations of Industry Standards
8/6/2019 Mr Patrick G. Gonklin
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Industry and tradingpartners must do things
differently
Adopt more sustainable
business practices
Collaborative TransportManagement, Empty Miles
Share OurSupplyChain
Focus on the Consumerwill not work if goals and measures are noth d if ti d d t t t i l
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shared, or if supporting rewards and structures are not in place
Connect our Business will not work if the connection point is not theshopper 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 thecommon goals, common measures and information visibility to act on.
Share our Supply Chain will not be possible without understanding howevery decision impacts the shopper, or if the way we measure success isdifferent. Too often we optimize components of the supply chain, but sub-optimize the whole Strategy
Alignment
JAG Framework
Focuson Consumer
Common Goals &Measures
InformationSharing*
EPC
Data Sync
ConnectedBusiness
Information
Knowledge, Skills &Capabilities
Incentives &Rewards
organisationDesign
Prepare People forNew World
Sustainability Cross Industry
Integration
Integrated SupplyChain
Share Our SupplyChain
An Integrated Approach to
Better Business Results
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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, whatdo we do
about it?
8/6/2019 Mr Patrick G. Gonklin
22/22
The NWWT Opportunity Take responsibility for the current state
Expand your view to include all stakeholders
Collaborate effectively across the supply chain inthe 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-compatibleprocesses.
So, whatdo we do
about it?
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