sam kim new ways of working together
TRANSCRIPT
New Ways of Working TogetherPat Conklin, Chief Customer Officer, Procter & Gamble- Asia
The light bulb was not invented from continuous
Innovation of a Candle
• 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 SKUStores are over SKU’’dd””
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
OutOut--ofof--stocks 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 freely
Share InformationIn 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
�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
• organisationDesign
���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
�Industry Track (Collaborate)
�New Ways of Working Together
Eliminate supply chain disruptions, enable growth
��Best Practices/ Standards
���Documentation, Education,
Communication
���Guiding Principles and Frameworks
����Share Results
����•Common Goals & Measures
• Information Sharing*
• EPC
• Data Sync
���Connected Business Information
�����•Knowledge, Skills & Capabilities
• Incentives & Rewards
• organisationDesign
���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���•
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 l iaison, planning coordination, agreement and execution follow-up
• Cross-funct ional teams dr ive 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
• Al low reliable quantification of the opportunities and expected ROI
Fact based
Step 5Monitor &
adapt
Step 1
Review the economic and shopper environment
Condit ions
for success
Step 2Review
sales and
agree on prioritized
growth
levers
Step 3
Define and agree on
3-year JAG plan
Step 4
Execute the
JAG plan
• 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 l iaison, planning coordination, agreement and execution follow-up
• Cross-funct ional teams dr ive analysis and planning to support Buyer-Seller
JAG process
• 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 l iaison, planning coordination, agreement and execution follow-up
• Cross-funct ional teams dr ive analysis and planning to support Buyer-Seller
JAG processJAG process
• Help trade partners build rationale for their growth strategy
• Demonstrate the objective selection of relevant growth levers
• Al low reliable quantification of the opportunities and expected ROI
Fact based
• Help trade partners build rationale for their growth strategy
• Demonstrate the objective selection of relevant growth levers
• Al low reliable quantification of the opportunities and expected ROI
Fact basedFact based
Step 5Monitor &
adapt
Step 1
Review the economic and shopper environment
Condit ions
for success
Condit ions
for success
Step 2Review
sales and
agree on prioritized
growth
levers
Step 3
Define and agree on
3-year JAG plan
Step 4
Execute the
JAG plan
�Industry Track (Collaborate)
�New Ways of Working Together
Eliminate supply chain disruptions, enable growth
��Best Practices/ Standards
���Documentation, Education,
Communication
���Guiding Principles and Frameworks
����Share Results
���•StrategyAlignment
• JAG Framework
���Focus on
Consumer
�����•Knowledge, Skills & Capabilities
• Incentives & Rewards
• organisationDesign
���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����•Common Goals & Measures
• Information Sharing*
• 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
�Industry Track (Collaborate)
�New Ways of Working Together
Eliminate 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
������•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�����•
Knowledge, Skills & Capabilities
• Incentives & Rewards
• organisationDesign
���Prepare People for New World
Change
Vision SkillsMeasures /
Rewards ResourcesAction
PlanChange
SkillsMeasures /
Rewards ResourcesActionPlan Confusion
VisionMeasures /
Rewards ResourcesAction
PlanAnxiety
Vision Skills ResourcesActionPlan
Gradual
Change
Vision SkillsMeasures /
RewardsAction
PlanFrustration
Vision SkillsMeasures /
Rewards Resources False
Starts
Five Elements of Change?
���Prepare People for New World
• 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
���Prepare People for New World
�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
• organisationDesign
���Prepare People for New World
�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������•
Sustainability
• Cross Industry Integration
• Integrated Supply Chain
���Share Our Supply
Chain
• Industry and trading partners must do things differently
• Adopt more sustainable business practices
• Collaborative Transport Management, Empty Miles
���Share Our Supply
Chain
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���• Strategy
Alignment
• JAG Framework
���Focus on Consumer
����• Common Goals & Measures
• Information Sharing*
• EPC
• Data Sync
���Connected Business
Information
�����•Knowledge, Skills & Capabilities
• Incentives & Rewards
• organisationDesign
���Prepare People for New
World
������•Sustainability
• Cross Industry Integration
• Integrated Supply Chain
���Share Our Supply Chain
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?