spend quality dashboardciplsoft.com/kbi/glossary.pdf · what track and measure e-catalog usage by...

Spend Quality DashboardKPI Master Data Definition

Classified - Internal Use

2

I. Performance KPIs- POV Performance- Commodity Performance

II. Capability KPIs- ARIBA- Procurement Efficiency- CCPP Utilization- Catalog Usage per Bottler- Bottler Catalog- e-Catalog Spend- e-Catalog User Usage- e-Catalog Utilization- Negotiation Scores- Supplier Scorecard and Supplier Shaping- Spend Coverage- Category Scorecard- Commodity Management- People- Frequency of updates and Routines

III. Appendices

Slides

4-89-12

1314-1617-19

20212223

24-2728-3031-3435-3738-4041-4445-54

5556-71

Table of Contents


3

Spend Quality

Actual Vs BP

Actual Vs MktActual Vs

Budget

Cost Savings

(POV)

Hedging Performance

(CPR)

Performance

1% Margin Goal

Year On Year

Org. Capacity

Rotation Rate

Procurement Eff. Targets

80% CCPP Utilization

e-Catalog KPIs

Supplier Shaping

Category Scores >80%

Tools and Master Data

Vision 2020 Supply Base

Size and Scope

Commodity Mgmt.

People

Capability

Technical Competency

Negotiation Scores > 80%

95% Spend Coverage

80% Supplier Scorecards

Hedge Capability

Monthly Biannual

Frequency

Comp. & Ben Assessment

% Core Trainings

% Women in leadership


ARIBA

4

POV Performance

What Measure performance of Pipeline of Values (POV) vs. 1% MarginImprovement and Business Plan (BP)

Objective & KPI

KPI: Current Year vs. 1% Margin Improvement (3.2% of Spend)By Country & By Category

KPI: Current Year vs. Business Plan (BP)By Country & By Category


5

What Analyze spends and identify savings opportunities

Rationale Measure, track, and report POV performance against budget and againsttarget

Analyze gap and create action plans to identify more saving opportunities

Scope All 3rd party spends under the following categories –‒ CDE‒ Direct Materials‒ Fleet & Warehouse‒ Logistics‒ IT‒ Manufacturing‒ Packaging‒ Marketing‒ Admin (currently not supported by Tower Lead)

POV Performance


6

What Outlines how POV performance is calculated

Formula KPI: Current Year vs. Business Plan

By Country = Business Plan (less) Full Year POV

By Category = Business Plan (less) Full Year POV

KPI: Current Year = 1% Margin Improvement ~ (3.2% of Spend)

By Country = 1% of NSR~ (less) Full Year POV

By Category = 3.2% of Net Impactable Spend* (less) Full Year POV

*Explanation on Net Impactable spends is covered under Spend Coverage work stream~1% of Margin improvement or 1% of NSR represents the target typically achieved by Fortune 500Companies.

POV Performance


What Outline the Process for Finance Validation of Actual POV Savings

Rationale For consistent and accurate measurement of POV savings and impact to thebottom lineFor bridging the gap between estimated and realized savings

Process

7

POV Performance

Field subject point of contact (SPOC)

consolidates POV’s (Full Year Estimates and YTD Realized)

Country SPOC endorses POV’s to Finance at the end

of the quarter, to be part of CPR for Apr,

Jul, Oct & Jan

Finance reviews and approves actual POV’s via e-mail

Country SPOC submits POV’s as part of CPR, with

Finance’s approval as an appendix


8

Knowledge check examples

Q

A

Is year-on-year reduction in cost of products and services considered as POV?

Yes, POV is a reduction in year-on-year cost.

Q

A

Is reduction in spend due to usage or purchase / volume changes considered as POV?

Usage and volume variances are not included as POV’s.

Q

A

Procurement initiated a change in commodity specification, should this be part of POV?

Yes, there must be procurement effort to be reported as POV.

Q

A

There is a reduction in final bids vs initial bids, should this be reported as POV?

No, this has no P&L impact.

Q

A

How should savings of $60k on purchase price of forklift with useful life of 6 years be reported as POV?

Only year 1 depreciation savings of $10k can be reported as POV as there will be no P&L impact in year’s 2-6.

Q

A

Signed a multi-year contract with fixed rate for 3 years and a 10% discount in year 1. How are the savings to be reported?

Savings equivalent to 10% is to be reported as POV in year 1. No POV’s in year 2&3.

Q&A: POV Performance


9

What Measure the Commodity Performance vs. Business Plan (BP), Prior Year (PY)and Market Price

Objective & KPI

Compare Avg. Price of Commodities* for Current Year vs. BP, PY & Market Price *Sweeteners, Packaging materials, Juices , Fuel and Electricity

KPI: Current Year vs. BPBP target remains unchanged for the year

KPI: Current Year vs. PYComparison to Prior Year is currency neutral to exclude ER impact/benefit

KPI: Current Year vs. Market PriceComparison to Market Price based on MTD consumption (i.e., YTD actualusage)

Commodity Performance


10

What Comparisons on monthly basis (Rolling Estimates) vs. PY, BP and Market Price

Rationale - To measure how well we perform vs. PY, BP and Market Price (Market Price is based on consumption basis)- To mitigate commodity risks to protect the bottom line

Scope Key Commodities:- Packaging

‒ Aluminum‒ PET / Resin

- Sweeteners‒ Sugar – Raws, Refined and Regulated sugar‒ HFCS /HFSS

- Juice & Pulps- Fuel – Diesel, gasoline/petroleum and LNG or LPG for fleet and production- Electricity

Commodity

Performance


11

What Explain how commodity performance is calculated

Formula KPI: Current Year vs. BP & PY

= Current year Avg. Price (less) BP Avg. Price x Current year quantity

KPI: Current Year vs. Market Price

= YTD Avg. Actual Price (less) YTD Avg. Market Price x YTD quantity

• Currency neutral to PY E/R for comparison vs. PY, whileBP E/R for comparison vs. BP and Market Price.

Commodity

Performance


12

Knowledge check examples

Q

A

When calculating the variance vs. prior year, should we use prior year’s exchange rate?

Yes, variance should be currency neutral to prior year.

Q

A

Full year quantity has been hedged. Should this be included in variance vs. market price inJune CPR?

No. Variance vs. Market Price should always be based on actual consumption (YTD June).

Q

A

Can we change the BP prices and quantity during the year?

BP prices and quantity cannot be revised and would have to be kept constant during theyear.

Q

A

Is can conversion excluded in calculating commodity performance for Aluminum?

Since can conversion cost is not a commodity, savings is reported under POV and henceshould not be included as commodity performance.

Q&A: Commodity

Performance


13

What Track Utilization and Measure success of ARIBA.

Objectives& KPI

Measure ARIBA Projects

KPI: ARIBA Project Related1. Licensed Users2. Active Users3. Registered Users

KPI: ARIBA User Related1. New Projects in e-sourcing2. Completed e-sourcing Projects3. Total Sourcing Projects

Above KPIs are populated from ARIBA system

ARIBA


14

Procurement Efficiency

What Measure and Benchmark Procurement efficiency

Objectives & KPIs

Improve overall Procurement efficiency

KPI: % OF TOTAL ORGANIZATION COST

= Procurement Organization Cost vs Total Organization Cost

KPI: % OF TOTAL SPEND

= Procurement Organization Cost vs Total 3rd Party Spend

KPI: % OF REVENUE

= Procurement Organization Cost vs Net Sales Revenue (NSR)


15

What Define the criteria that is based on general accounting rules

Criteria Procurement Organization Cost in USD-Overall Spend, Opex and Depreciation, applied against the Procurement CostCenter for both Regular and Contract Employees (incl. Field Procurement)(Excludes Trainings and IT Systems shared with or delivered by other Departments (i.e. Finance, HR))

Total Organization Cost in USD-Overall Spend, Opex and Depreciation, incurred by the Bottling Organization(Excludes COGS (i.e. commodities, etc.)

Total 3rd Party Spend Managed in USD-Overall 3rd Party Spend managed/handled by Procurement, including Direct& Indirect Spend(Excludes Concentrates)

Revenue in USD-Net Sales Revenue (NSR)



16

What Outlines Procurement Efficiency

Formula KPI: % of Total Organization CostProcurement Organization Cost

= -----------------------------------------Total Organization Cost

KPI: % of Total SpendProcurement Organization Cost

= -----------------------------------------Total 3rd Party Spend

KPI: % of RevenueProcurement Organization Cost

= -----------------------------------------Net Sales Revenue (NSR)



17

CCPP Utilization

What Measure the extent of CCPP utilization

Objectives & KPIs

Maximize CCPP utilization against agreed targets

KPI: % OF SPEND MANAGED UNDER CCPP= Total Spend managed vs. Spend negotiated with CCPP

KPI: % OF SUB-CATEGORIES MANAGED UNDER CCPP= Number of Categories managed under CCPP vs total number of Categories


18

What Spends and Categories negotiated under CCPP

Criteria Spend Managed under CCPP in USD-Overall Spend managed/handled thru Coca-Cola Procurement Process

Total Spend Managed in USD-Overall Spend managed/handled by Procurement, including Direct & IndirectSpend(Excludes Concentrates)

No. of Categories-Total number of Categories managed/handled by Procurement(The particular Categories refer to the 2015 list of Categories / Subcategories, as listed in the 2015 Spend)

No. of Categories Negotiated under CCPP-Total number of Categories managed/handled thru Coca-Cola ProcurementProcess

CCPP Utilization


19

What Determines CCPP effectiveness

Formula KPI: % of Spend Managed under CCPP

Spend negotiated with CCPP= -------------------------------------

Total Spend

KPI: % of Categories managed under CCPP

Number of Categories managed under CCPP= ----------------------------------------------------------

Total Number of Categories

CCPP Utilization


20

What Track and Measure e-Catalog Usage by Bottler

Objectives& KPI

Measures the total number of items used/purchased vs. total items inshopping carts.

The following KPIs will be compared to Prior Period and BIG average.

KPI: Catalog Usage per Bottler KPIs1. Items per Bottler2. No. of items ever used3. % of items ever used

Above KPIs are populated from Informatica system

e-Catalog Usage per Bottler


21

What Track and Measure e-Catalog Usage.

Objectives& KPI

Measures the number of items and catalogs per bottler.


KPI: Bottler Catalog KPIs1. Items per Bottler2. Catalog per Bottler3. Average items per Catalog


Bottler Catalog


22


Objectives& KPI

Measures the e-catalog related spends per bottler.


KPI: e-Catalog Spend1. Spend per Bottler past 12 mos.2. Average spend past 12 mos.


e-Catalog Spend


23


Objectives& KPI

Measures the number of users logged in for the last 12 months per bottler.


KPI: e-Catalog User Usage1. e-Catalog registered users 2. Average # of users per month 3. % Active users past 12 mos.


e-Catalog User Usage


24

Negotiation Scores

What Measure & Weight the success of CCPP events

Objectives & KPIs

Measure performance of CCPP event and define areas for improvementKPI: SCORE OF CCPP EVENT

= Achieved outcome measured against the Goal

Category Weighting• Participation & Engagement - 13%• Financials 45%• Social Responsibility 18%• Quality & Customer Service 9%• Innovation 5%• Supply Risk & Continuity 10%


25

What Explain how CCPP Negotiation success will be measured and compared

Source Based on own assessment of finished CCPP Event after finalized Deep Dive 4Assessment frequency is semi-annual.

Negotiation Scores

Comparion by Bottler within one Category

Comparison to Prior Period and BIG Average


26

What Explain the Negotiation Scorecard Methodology

Formula Negotiations Scores= Weighted average of each metric scored against the category’s optimumassessment

Negotiation Scores

Key Metrics Optimum

Score

Weightage

Participation 10 13%

Financial 25 45%

Social Responsibility 20 18%

Quality & Customer Service 15 9%

Innovation 5 5%

Supply Risk & Continuity 10 10%

Total 85 100%


Classified - Confidential27

What Supplier Scorecard

Objective To measure the implementation of Supplier Scorecards across 16 sub-categories, sothat performance is measured, evaluated and communicated with suppliers.

Scope • Cans, Closures, CO2, Crowns, Glass, Cartons, Labels, PET• CD Equipment’s, Logistics – Road,• MHE, Production and Packaging Equipment and S&L Chemicals• Gases, Juices and Sweeteners.

KPI % OF SCORECARD IMPLEMENTATION

# of Suppliers (for each category) with Scorecard ÷ Total # of Suppliers (for eachcategory)

Criteria A Supplier Scorecard should be measured based on the following variables:• Quality• Delivery• Financial• Capability and Responsiveness• Innovation• Supply Continuity and ComplianceNote: Weightage is to be assigned by the bottlers, based on the importance of each variable.

Supplier Scorecard& Supplier Shaping


What Supplier Scorecard

Target

Notes:

* For Packaging Materials the expectation is to have Supplier Scorecard coverage as follows –FY 2015 - 60% of supply baseFY 2016 - 80% of supply baseFY 2017 - 100% of supply base

** Production Equipment’s –Packaging Equipment 40%HP Compressor 80%, andProcessing Equipment 40%

CATEGORY SCORE CATEGORY SCORE CATEGORY SCORE

Cans 80%* Glass 80%* PET 80%*

Closures 80%* Juice 100% Prod. Eqpt. Various**

CO2 100% Labels 80%* S&L Chem. 100%

Coolers 100% Logistics – Road 70% Sweeteners 100%

Crowns 80%* MHE 70%



What Supplier Shaping

Objective To measure Supplier Shaping programs implemented during the year.

Scope Only suppliers forming part of Strategic Categories should be part of Supplier Shapingprogram

KPI # of Supplier Shaping Programs

Criteria Qualification for a Supplier Shaping program, should include the following as a bareminimum –

• Progress Tracking (ex: Supplier scorecard that is shared and reviewed at least 4x ayear)

• Aligned Business Objectives (ex: joint planning)

• Value Definition Plans (ex: POV plans for next year), and

• Top 2 Top Meeting (ex: at least once annually)

Target N/A



What Supplier Shaping view in DASHBOARD

Objective Update performance of suppliers through Supplier Scorecards used to measureperformance across multiple sub-categories

Scope Suppliers forming part of the 16 sub-categories as outlined in slide # 27

Frequency Update twice a year (refer slide # 51 for details)

Criteria A Supplier Scorecard should at a bare minimum, measure the following variables-

• Quality• Delivery• Financial• Capability and Responsiveness• Innovation• Supply Continuity and ComplianceNote: Weightage is to be assigned by the bottlers, based on the importance of each variable.


31

Spend Coverage

What Measures amount of 3rd party spend that is managed against discrete definitions below

Objectives & KPIs

Spend Coverage >95% in SC4 & SC5Perform measurement on an annual basis KPI: SPEND COVERED FOR EACH CATEGORY

= Weighted average of each spend coverage level against spend by Tower, Country or Category

Level Key Metrics Score BIG

SC 1 PO’s not issued. Purchase made directly by Requestor. 0%

SC 2 PO’s issued (but no Agreement in place) 20%

SC 3 PO’s issued and Supply Agreement in place 16%

SC 4 PO issued, Supply Agreement and Category Plans in place

16%

SC 5 PO issued, Supplier Agreement, Category Plans and Supplier Performance Review in place.

47%

Total Score 100%


32

What Measure 3rd party spend at strategic level annually

Rationale • To measure how much of our 3rd party spend is covered at the most strategic level of sourcing ability

• To measure how well we perform vs PY

Scope All 3rd Party Spend:

Segmented by‒ Country / Bottler‒ Category‒ Tower Lead

Assessment frequency is annual.

Spend Coverage


33

What Knowledge check

Q

A

Why are there discrete categories?

Each level describes a discrete improvement in strategic sourcing practice for 3rd Partyspend being managed. SC1 being the lowest and SC5 being the optimal

Q

A

Who will validate the spend coverage levels?

The Procurement Director will be responsible for validating spend coverage levels withFinance.

Q

A

Why are we only measuring this once per annum?

In recognition of the time required to complete this activity, it will be done on a perannum basis. It should also encourage Procurement associates to monitor this KPI asthey improve Spend Coverage characteristics in any area of spend management.

Q&A: Spend Coverage


34

Category Scorecards

What • Measures category performance against the optimal target

Objectives & KPIs

Category Scorecards > 80% Performance measured on an annual basis. KPI: CATEGORY MANAGEMENT EXECUTION

= Weighted average of each metric scored against the category’s optimum assessment

Key Metrics Optimum Score

Weightage

Cost 25 17%

Contract & Risk Management 40 28%

Supplier Shaping 20 14%

Brand Value Fundamentals 10 7%

Innovation 45 31%

Sustainability 5 3%

Total 145 100%


35

What Measure and compare performance vs. Category best practices

Rationale • To measure how our business performed in implementing category best practices• To measure how well we perform vs PY

Scope Key Categories in-scope for 2016: Logistics‒ Haulage‒ Inbound Indirect Material‒ Inbound Direct Material‒ Route to Market Fleet & Warehouse‒ 3rd Party Warehouse‒ Material Handling Equipment‒ Pallet‒ Tires Manufacturing‒ CO2‒ Production Equipment‒ Plant Chemicals‒ Laboratory Consumables‒ Lubricants‒ MRO Spare parts

Packaging‒ Closures‒ Metals/ Cans‒ PET‒ Shrink Film‒ Glass‒ Labels‒ Cartons Cold Drink Equipment IT

Category Scorecards


36


Q

A

Who validates whether the category scorecard in each year is per a global standard?

Each Tower Lead will be responsible for validating the score achieved with theProcurement Director for each business being measured.

Q

A

How will we measure each bottler’s overall performance in achieving best practices

Two measurements will be used, a spend weighted average and a linear average will beprovided. This allows for a fair view of high spend priority category scores and all Towerscores.

Q

A

Why are we only measuring this once per annum?

It is not expected that category scores will change dramatically in each half asimplementation of optimal category enhancements take time.

Q&A: Category

Scorecards


37

Commodity Management

What Identify, quantify and manage commodity risk over the strategic businessplan period

Objective & KPI

Measure hedge capability for total Commodities* and associated F/XExposure. *Sweeteners, Packaging materials & Juices for now

KPI: Hedge CapabilitySum of Commodity exposure that can be hedged

= ------------------------------------------------------------------Total Commodity exposure (spread over 3 years)


38

What Key commodities that are included and time frame for coverage

Rationale Measure hedge capability and associated exposure

Scope Key Commodities:- Aluminum,- Resin,- Sugar (includes, Raws, Refined and Regulated)- HFCS- Juice & Pulp- Other (covers Fuel, Dairy, etc.)

The emphasis is on identifying, quantifying and managing commodity riskover a period of time, hence we need to assess the commodities that can behedged / covered over a planning period of 3 Years.



39

What Methodology for calculation

Formula KPI: Hedge Capability

Sum of Commodity exposure that can be hedged (spread over 3 years)= --------------------------------------------------------------------------------------------

Total Commodity exposure (spread over 3 years)

Assessment frequency is twice a year Jun SBP & Feb (Final BP)*

*Data submission for both SBP and ABP is required only from SIB’s



40


Q

A

What is the basis on capability to pre-buy of Resins?

Warehouse capacity, as there is physical offtake of the inventory.

Q

A

Should the shelf life of Juices and Pulps affect the capability to hedge?

Yes, these commodity expired during certain period.

Q

A

In markets, where Sugar prices are regulated, who sets maximum quantity that can bepurchased?

The decision should be based on the local Government policies.

Q

A

A contract for can supplies is expiring by end of Year 2 of the planning period, can it limit the bottler to hedge beyond that period?

Since, Aluminum is freely traded, CBO’s have the flexibility to hedge or price Aluminum thru Treasury beyond the contract period.

Q

A

Does price guidance on Raw Sugar issued by BIG procurement affect the bottler’s capability to hedge?

With Raw Sugar being freely traded (NY11), HQ Procurement has no influence on the bottler’s capacity to hedge; which in turn is governed by local laws and BIG policies.

Q&A: Commodity Management


41

Journey to the Procurement Leader

Technical Competency

LEVERS & KPIS

People Assessment

Rotation Rate

Organizational Efficiency & Surge

Training & Compliance

Compensation & Reward

•Rotation Rate to

Other Function

•Rotation Rate Within

Procurement

•Retention Rate

Coca-Cola system vs. PY

•Organization &

Capacity

Assessment

•% Women in

Leadership

•% Core Trainings

implemented

•Compensation &

Benefits

Benchmark vs.

Market


42

People Assessment

What • Employee evaluation against specific skills and performance goals based on formal

Coca-Cola Leadership Behaviors

• Career path development

Objectives

& KPIs

1. Skill Assessment:

Implement CIPS online skills assessment for all Procurement team members in region

KPI: TECHNICAL ASSESSMENT SCORE

= Average score based on online skills assessment

Associates included in the assessment:‒ Bottler Procurement associates in non-administrative role (ex: Category

managers, buyers, etc.)‒ Procurement Directors‒ Tower Leads


43

What • Procurement rotation programs to increase commercial acumen• Build procurement skills in entire organization via training for non-procurement

staff and cross-functional job rotation• Rotate Category Management ownership within Procurement team to increase

knowledge-span

Objectives & KPIs

Rotation Rate:Evaluate with HR what type of rotation programs make sense within Procurement and between Procurement and other functions; Measure rotation rate

KPI: ROTATION RATE TO OTHER FUNCTION

= average # of rotations within planning year from Procurement role to role outside of Procurement function

KPI: ROTATION RATE WITHIN PROCUREMENT

= average # of years within Procurement function (category rotation); includes between Procurement organizations, regional, BIG, TCCC

KPI: RETENTION RATE COCA-COLA SYSTEM

= %ge of procurement managers who were employed at the beginning of the period and remain in Coca-Cola system at the end of the period

Rotation Rate


44

Rotation Rate

What Define the scope and explain how Rotation Rate is calculated

Scope Associates included in the assessment:‒ Bottler Procurement associates in non-administrative role (ex: Category

managers, buyers, etc.)‒ Procurement Directors‒ At least 1 year in Procurement

Formula KPI: Rotation Rate to Other Function Number of associates moved to other Function

= ------------------------------------------------------------------Total Number of FTE Procurement associates in a year


45

Rotation Rate

What Explain how Rotation Rate is calculated

Formula KPI: Rotation Rate Within ProcurementTotal Number of years in Procurement

= -------------------------------------------------------------Total Number of roles assumed in Procurement

KPI: Retention Rate Coca-Cola System

Total # of Proc. Associates * - # of Proc. Associates lost during the period = ---------------------------------------------------------------------------------------------- x 100

Total # of Proc. Associates *

*beginning of period


46

What • Procurement organizational set-up 2020• Defined capabilities to buy, build or borrow • Execution roadmap• Commitment to Women Leadership Vision 2020

Objectives & KPIs

1. Organizational & Capacity Assessment: Implement organizational assessment using methodology as implemented at CCEAG (ATK Assessment 2013)

KPI: ORGANIZATIONAL & CAPACITY ASSESSMENT

= Weighted average score of multiple metrics, i.e., Capacity, Performance, Organization & Workload, vs. optimum score (refer page #52 for scorecard).

2. Women in LeadershipVision 2020 target: 50 % of Women in leadership positions (Leaders of Leaders, Leaders of Others, Leaders of Self)

KPI: % WOMEN IN LEADERSHIP

= % of women in the following roles: Procurement Director, Senior Category Management, Category Manager



47

What Organizational & Capacity Assessment Methodology

Formula KPI: Organizational & Capacity Assessment= weighted average of 4 metrics based on self assessment vs. optimum score in Scorecard.



Key Metrics Optimum Score Weightage

Capacity 40 30%

Performance 15 20%

Organization 25 20%

Workload 165 30%

Total 245 100%

48

What Define the scope and explain how % Women in Leadership is calculated

Scope Women in Leadership includes:

= Managers/Category Managers and above

Formula KPI: % Women in Leadership

Number of Women in roles of PD, Sr. Category Manager & Category Manager

= --------------------------------------------------------------------------------------------------Total Number of associates with PD, Sr. Category Manager and Category Manager



49

What • Broader training to cover competencies required for 2020• Training scope based on current and target role • Focus on more trainings covering interpersonal skills

Objectives & KPIs

1. Core Trainings

Measure % of core trainings implemented per Procurement Director, Senior Category Manager, Category Manager (Leaders of Leaders, Leaders of Others, Leaders of Self); overall average within total team

Core Trainings:• CCPP• Negotiation• Frontline Leadership / LEAP / LEAP Advanced / Summit (Management Level specific)

KPI: % CORE TRAININGS

= % core trainings implemented as overall average within total team



50

What Benchmarks competitiveness in terms of Compensation & Reward vs. Market

Objectives & KPIs Benchmark compensation against market


Validate together with HR if compensation structure of Procurement is competitive with Market

KPI: COMPENSATION BENCHMARK VS. MARKET

= % of Compensation and reward in region against market



51

SQ Capability Dashboard - Frequency and timing of information request and update

Classified - Internal use

KBI Q1 Q2 Q3 Q4


CCPP Implementation

ARIBA

e-Catalog KPIs

Negotiation Scorecards

Supplier Scorecard &

Supplier Shaping

Category Scorecard1

Spend Coverage

Hedge Capability2

People Assessment

Rotation Rate

Org. Efficiency & Surge



Tools and Master Data

Lars Ludewig

Vision 2020 Supply Base

Lilong Zhang

Size and ScopeRaj Rao


Rajesh Jayaram

PeopleSanam Moayedi

1Per Tower Lead’s Schedule; 2CBO details to be secured from BIG Finance

52

Appendix

Performance KPIs


53

BP Final Annual Business Plan in Feb which remains unchanged for the year

CY Current Year

PY Prior Year

FY Full Year

YTD Year To Date

YOY Year-on-year

RE Rolling Estimate

POV Pipeline of value

CPR Monthly Cost Performance Report

NSR Net Sales Revenue

ER Exchange rate

SPOC Single Point of Contact

Abbreviation

of Terms


54

POV Definitions and Examples

CPR Template


Commodities cost variance vs. BP’16 - Illustration of variance vs. BP, PY and Market

55

Performance vs. Market based on YTD consumption

Commodity Performance - Example


ALUMINUM $/MT %ge $/MT $/MT Qty - MTs Ave. Price Reported C/N

Cambodia 1,696$ 96% 1,695$ 1,648$ 3,320 1,693$ (0.0)$ (0.4)$ (0.4)$ 0.2$

China 1,594$ 100% 1,498$ -$ 8,945 1,498$ (0.9)$ (2.5)$ (2.5)$ (0.5)$

India 1,800$ 77% 1,784$ 1,650$ 1,853 1,754$ (0.1)$ (0.2)$ 0.1$ 0.2$

Malaysia 1,704$ 93% 1,744$ 1,654$ 5,593 1,738$ 0.2$ (0.3)$ 0.7$ 0.5$

Myanmar 1,680$ 82% 1,635$ 1,650$ 1,615 1,638$ (0.1)$ (0.4)$ (0.0)$ 0.0$

Vietnam 1,697$ 85% 1,711$ 1,648$ 6,585 1,702$ 0.0$ (0.9)$ (0.3)$ 0.3$

Total - CBOs 1,674$ 92% 1,642$ 1,650$ 27,910 1,642$ (0.8)$ (4.7)$ (2.5)$ 0.7$

Bahrain 1,500$ 92% 1,512$ 1,649$ 1,368 1,524$ 0.0$ (0.4)$ (0.4)$ (0.1)$

Egypt 1,561$ 100% 1,850$ -$ 11,114 1,850$ 3.2$ 0.2$ 3.6$ 1.7$

UAE 1,764$ 87% 1,725$ 1,650$ 3,333 1,715$ (0.2)$ (0.4)$ (0.4)$ 0.3$

Total - SIBs 1,595$ 97% 1,799$ 1,650$ 15,815 1,793$ 3.1$ (0.6)$ 2.7$ 1.9$

Total - BIG 1,646$ 94% 1,700$ 1,650$ 43,725 1,697$ 2.3$ (5.3)$ 0.2$ 2.6$

Act.'15 Market Price

CBO 1,840$ 1,598$

SIB 1,836$ 1,600$

BIG 1,839$ 1,599$

BP '16 FY'16 Est.Priced UnpricedYTD'16 Est.

Vs Mkt - $

Mil

FY'16 Est. Vs

BP - $ Mil

FY'16 Est. Vs Act'15

56

POV Performance- ExampleIllustration by Country – 1.2% of NSR


$ Mil % to NSR2016 Est. vs. 1%

Margin

2016 Est. vs.

BP'16$ Mil

% to

2016 Est.

Cambodia 1.2 1.6 1.6% 1.3 (0.6) (0.4) 0.9 54%

Bangladesh - - 0.0% 0.7 - -

China 9.9 12.0 0.7% 26.0 4.5 (2.1) 5.2 43%

Germany 5.7 4.5 0.6% 32.9 2.6 1.2 4.5 100%

Guatemala 1.9 1.7 1.0% 3.6 (0.0) 0.2 0.9 51%

India 14.1 20.2 1.6% 13.7 (7.6) (6.2) 10.6 52%

SIMA 3.5 5.1 1.7% 6.3 (2.0) (1.6) 1.8 35%

Monresa 3.3 3.1 1.7% 4.5 (1.2) 0.2 1.1 36%

Myanmar 4.2 4.9 5.0% 1.9 (3.9) (0.6) 2.6 53%

Nepal - - 0.0% 0.6 - -

Sri Lanka - - 0.0% 0.5 - -

Vietnam 3.3 4.0 1.2% 7.6 (0.6) (0.7) 1.6 41%

Total CBOs 47.0 57.1 1.1% 97.6 (7.0) (10.1) 29.1 51%

CBOs (excl. GER) 41.2 52.6 1.2% 64.8 (9.7) (11.3) 24.6 47%

Bahrain 0.6 0.8 1.1% 0.7 (0.1) (0.3) 0.4 51%

Egypt 8.3 8.4 1.5% 8.2 (2.7) (0.1) 1.3 15%

UAE 2.3 2.3 1.1% 2.1 (0.2) (0.0) 0.7 29%

Total SIBs 11.1 11.5 1.4% 11.1 (3.0) (0.4) 2.4 21%

Total BIG 58.1 68.6 1.2% 108.8 (10.0) (10.5) 31.5 46%

(Fav) / Unfav - $Mil H1'16 Realized POVBottler

($ Mil)

BP'16

Target

2016 Est.

2015 Act.

57

POV Performance- ExampleIllustration by Category – 3.5% of Impact-able Spend


$ Mil% to

Spend

2016 Est. vs.

3.2% of Spends

2016 Est. vs.

BP'16$ Mil

% to

2016 Est.

CDE-Opex 1.1$ 0.6$ 0.8 2.2% 0.3 (0.1) 0.4 49%

CDE-Capex 1.0$ 1.1 (1.1) (0.0) 0.8 73%

Direct Material 3.8$ 11.7$ 7.2 5.9% (3.4) 4.5 4.3 59%

Fleet and Warehouse 3.6$ 1.2$ 2.1 1.7% 1.5 (0.9) 1.0 48%Fleet 0.7 0.1

Warehouse 1.3 0.7

Fleet & WH - Capex 0.1 0.2

General & Admin 2.6$ 0.4$ 0.2 0.3% 2.4 0.2 0.1 37%

IT 1.6$ 2.8$ 2.1 3.9% (0.4) 0.7 1.3 62%Infrastructure 0.8 0.6

IT Services 0.3 0.2

Software, Connectivity & Tel. 0.9 0.5

Logistics 13.1$ 5.4$ 14.7 3.5% (1.6) (9.3) 6.5 44%Freight & Fuel 12.9 5.6

Third Party Services 1.8 0.7

Manufacturing 10.5$ 5.6$ 6.3 1.9% 4.2 (0.7) 2.7 43%Gases, Contract Pack, Facilities 3.7 1.7

MRO 2.5 1.0

Marketing 5.1$ 2.9$ 1.8 1.1% 3.3 1.1 1.1 60%

Packaging 19.7$ 26.2$ 32.0 5.1% (12.3) (5.8) 13.4 42%Primary Packaging 22.8 9.1

Secondary Packaging 9.2 4.3

Production Equipment 0.4$ 0.4 #DIV/0! (0.4) (0.1) 0.1 18%

Total 61.2$ 58.1$ 68.6 3.5% (7.5) (10.5) 31.5 46%

BP'16 Target2016 Est. POV (Fav) / Unfav - $Mil H1'16 Realized POV

Categories

($Mil)

Target

(3.2% of 2015

Spends)

58

Appendix

Tools & Master Data


59

The Negotiation Scorecard will help to measure & compare the success of our realized CCPP events after Deep Dive 4

Category Explanation Score Weighting Total Rating

1Participation of other bottler

(Non-CEPG)

Volume leverage through multi-bottler

cooperation0

Single Bottler

negotiation1

Attempt to leverage, but

could not find partners2

One additional partner

participated3 2-3 bottlers participated 5 Global participation 5% 0

2 Input from StakeholdersEvaluate overall value of Stakeholder

Participation0 No value for the process 1

Stakeholder participation

did not help2

Stakeholder participation

helped in some areas but

less than expected

3Stakeholder participation

was helpful - value tbd5

Stakeholder engagement

was very valuable for the

final result

8% 0

3 Multi year savingsAre incremental savings being generated after

Year 11 1 year value 3 2 year value 5 3 year value 7% 0

4 1% Margin GoalEvaluate Level of saving against 1% Margin

Goal0 No cost savings 1 >0% - 1,0% 2 >1% - 3% 3 >3% - 7% 5 > 7 % 15% 0

5 Total Cost of OwnershipIf applicable - Have the cost of ownership

model been used ?0

TCO was not in scope of

negotiation2

TCO model was used, but

with limited input due to

missing information

5100% TCO reviewed with

Stakeholders10% 0

6Value creation / Continuous

Improvement

How many different savings value levers were

identified and successfully activated as a

result of the negotiation

0just one - direct price

reduction1 > 1 lever 3 >3 levers 5 >5 levers 8% 0

7Involvement of Finance

Department

Have Targets been established and validated

with Finance ?0

No Targets established

or aligned1

Targets established, but

not reached2

Targets established and

achieved5

Targets established,

achieved and validated5% 0

8 GFSIIf applicable - Selected suppliers GFSI

approved ?0

Not all suppliers audited -

supply disruption

expected

3

All supplier audits scheduled -

or conditional approval given-

no disruption expected

5All supplier audited and

passed5% 0

9 SGP Selected suppliers SGP compliant ? 0

Not all suppliers audited -

supply disruption

expected

3




5All supplier audited and

passed5% 0

10 Joint Social ResponsibilityDoes the agreement contain clear objectives

for both parties0

No agreement or

response3

Plan in place with minimum

goals5

Plan in place with

quantified goals by year5% 0

11 CO2 Footprint Transparency Clear Visibility of suppliers CO2 Footprint 0 no information available 2 Information available 5All relevant information

transparent and available3% 0

12Clear Plan to reach Zero

Defect Target

How the contract addresses direct +

consequential damages0 not addressed at all 1

contract addresses

direct damages3

contract addresses

damages + clear method

how to manage &

quantify

5

contract addresses all

direct damages incl. non-

performance penalties

3% 0

13Customers requirements /

Priorities

Have you run a survey to select the right

supplier0

Selection did not include

stakeholder

recommendation

1

Stakeholder

recommendation

selected, but @

minimum level

3

Stakeholder selection

considered to large

extend

5

Stakeholder

recommendation 100%

honored

3% 0

14 Service Level Agreement Is there an aligned SLA in place ? 0 not in place 1contract addresses a

SLA3

SLA in place meeting

Stakeholders needs5


Stakeholders need - with

improving SL over the

years

3% 0

Innovation 15Innovation & Continuous

Improvement

Defined Action Steps how to push for

innovation during contrat length0 Nothing committed 3

Contractual agreement to

work on improved

performance and efficiency

w/o value commitment

5

Suppliers gives us first

access to applicable

innovation and commits to

value

5% 0

16 Contingency StrategyExistance of a Contingency Strategy in case

of major supply disruption0 No evaluation done 3

Contingency for small

disruption in place, but not for

major

5

Contingency strategy

imbedded in contract &

alternative supply points

BU certified

5% 0

17 Preferred Customer StatusAgreement to be treated as preferred

customer during demand peaks0

Was not in scope of

negotiation1 2

Agreement to get proportional

share of business3 5

All suppliers give Preferred

Customer Status5% 0

500 0,0

100% 0%

BI - ScoreCard to measure Success of CCPP Event - METHODOLOGY & EXPLANATIONS

Total Score:Maximum Score:

R A T I N G

Supply Risk &

Continuity

Quality &

Customer

Service

Social

Responsibility

Financials

Participation /

Engagement


60

The Methodology for the Negotiation Scorecard follows the already established Category Scorecards sub-divided in 6 different Perspective…

Perspective 1: Participation – 13%

Category Explanation R A T I N G Weighting

Participation of other

bottler (Non-CEPG)

Volume leverage through multi-

bottler cooperation0

Single Bottler

negotiation1

Attempt to

leverage, but

could not find

partners

2One additional

partner participated3

2-3 bottlers

participated5

Global

participation5%

Input from

Stakeholders

Evaluate overall value of

Stakeholder Participation0

No value for the

process1

Stakeholder

participation did

not help

2

Stakeholder

participation helped in

some areas but less

than expected

3

Stakeholder

participation was

helpful - value tbd

5

Stakeholder

engagement was

very valuable for

the final result

8%


61

The Methodology for the Negotiation Scorecard follows the already established Category Scorecards sub-divided in 6 different Perspectives…

Perspective 2: Financial – 45%


Multi year savingsAre incremental savings being

generated after Year 11 1 year value 3 2 year value 5 3 year value 7%

1% Margin GoalEvaluate Level of saving against

1% Margin Goal0 No cost savings 1 >0% - 1,0% 2 >1% - 3% 3 >3% - 7% 5 > 7 % 15%

Total Cost of

Ownership

If applicable - Have the cost of

ownership model been used ?0

TCO was not in

scope of

negotiation

2

TCO model was used,

but with limited input

due to missing

information

5

100% TCO

reviewed with

Stakeholders

10%

Value creation /

Continuous

Improvement

How many different savings value

levers were identified and

successfully activated as a result of

the negotiation

0just one - direct

price reduction1 > 1 lever 3 >3 levers 5 >5 levers 8%

Involvement of Finance

Department

Have Targets been established and

validated with Finance ?0

No Targets

established or

aligned

1

Targets

established, but

not reached

2Targets established

and achieved5

Targets

established,

achieved and

validated

5%


62


Perspective 3: Social Responsibility – 18%

GFSIIf applicable - Selected suppliers

GFSI approved ?0

Not all suppliers

audited - supply

disruption expected

3




5All supplier audited

and passed5%

SGP Selected suppliers SGP compliant ? 0

Not all suppliers

audited - supply

disruption expected

3




5All supplier audited

and passed5%

Joint Social

Responsibility

Does the agreement contain clear

objectives for both parties0

No agreement or

response3

Plan in place with minimum

goals5

Plan in place with

quantified goals

by year

5%

CO2 Footprint

Transparency

Clear Visibility of suppliers CO2

Footprint0

no information

available2 Information available 5

All relevant information

transparent and

available

3%



63


Perspective 4: Quality & Customer Service – 9%


Clear Plan to reach Zero

Defect Target

How the contract addresses direct

+ consequential damages0 not addressed at all 1

contract addresses

direct damages3

contract addresses

damages + clear

method how to

manage & quantify

5

contract addresses all

direct damages incl.

non-performance

penalties

3%

Customers requirements

/ Priorities

Have you run a survey to select

the right supplier0

Selection did not

include stakeholder

recommendation

1

Stakeholder

recommendation

selected, but @

minimum level

3

Stakeholder selection

considered to large

extend

5

Stakeholder

recommendation

100% honored

3%

Service Level

AgreementIs there an aligned SLA in place ? 0 not in place 1

contract addresses

a SLA3


Stakeholders needs5


Stakeholders need -

with improving SL

over the years

3%


64


Perspective 5: Innovation – 5%


Innovation &

Continuous

Improvement

Defined Action Steps how to

push for innovation during

contract length

0Nothing

committed3

Contractual agreement to work on

improved performance and

efficiency w/o value commitment

5

Suppliers gives us first access

to applicable innovation and

commits to value

5%


65


Perspective 6: Supply Risk & Continuity – 10%


Contingency Strategy

Existence of a Contingency

Strategy in case of major

supply disruption

0No evaluation

done3

Contingency for small disruption in

place, but not for major 5

Contingency strategy imbedded in

contract & alternative supply points

BU certified

5%

Preferred Customer

Status

Agreement to be treated as

preferred customer during

demand peaks

0Was not in scope

of negotiation2

Agreement to get proportional share

of business5

All suppliers give Preferred

Customer Status5%


66

Appendix



ABP'16 ABP'17 ABP'18 ABP'16-18

Spend in $ Mil

Commodity that can be

Hedged

Total Commodity

Exposure

Hedge Capability


Hedged

Total Commodity

Exposure

Hedge Capability


Hedged

Total Commodity

Exposure

Hedge Capability


Hedged

Total Commodity

Exposure

Hedge Capability

Aluminum $ 3.8 $ 3.8 100.0% $ 4.1 $ 4.1 100.0% $ 4.5 $ 4.5 100.0% $ 12.4 $ 12.4 100.0%

Resin* $ 122.0 $ 122.0 100.0% $ - $ 147.8 0.0% $ - $ 169.0 0.0% $ 122.0 $ 438.8 27.8%

Sugar^ $ 181.9 $ 181.9 100.0% $ 49.1 $ 196.2 25.0% $ - $ 225.4 0.0% $ 231.0 $ 603.6 38.3%

Juice & Pulps~ $ 64.0 $ 64.0 100.0% $ 36.6 $ 73.1 50.0% $ - $ 84.2 0.0% $ 100.5 $ 221.3 45.4%

Total$ 371.7 $ 371.7 100.0% $ 89.7 $ 421.3 21.3% $ 4.5 $ 483.1 0.9% $ 465.9 $ 1,276.1 36.5%

* Resin equivalent to 12 months of pre-buys

^ Based on past experience of 15 months

~ Juice based on shelf life of 18 months

67

Commodity Management- Example

Illustration of detailed Commodity Exposure & Coverage over planning period


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