Consumer Product Group Benefits: Staying ahead of the curve

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Consumer Product Group Benefits Staying ahead of the curve in the fast-moving environment

Fortune Favours the Brave

52.4

%

of Fortune 500 CPGs work with Oliver Wight

IBP Delivers Growth Top Business Benefits Attributed to Integrated Business Planning (% respondents) Improved Asset Utilization

Increased Revenue

Improved Logistics Planning

Developing and Executing Demand Shaping Programs

19%

17%

52%

20% Capital Planning and Asset Management

21%

Improved translation of Demand into Procurement requirements/buy-side

31%

21%

Improved Forecast Accuracy

31%

27% 28%

31%

Improvements in the Perfect Order/Customer Service

Reduction of Inventory

Source: AMR Research, a Gartner organisation

Improved New Product Inventory

Better Supply Planning / Schedule Adherence

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Business Benefits Delivered Food and Beverage – Ambient Cost and Service

Finished Goods (days)

>37 days

90 94%

>94%

15 - 37 turns

>37 turns

<90%

Customer On Time In Full % (by line)

37 - 17 days

Stockturns Finished Goods <17 days

<15 turns

Oliver Wight Clients

Disadvantage

Parity

Advantage

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Forecast Accuracy

<73%

73 78%

>78%

77 89%

>89%

Forecast Accuracy %

Overall Supply Chain Metrics Total Supply Chain Cost % Sales

>8%

Perfect Order Probability %

8 - 4%

<77%

<4%

Oliver Wight Clients

Disadvantage

Parity

Advantage

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Food and Beverage â&#x20AC;&#x201C; Chilled and Frozen

90 94%

>94%

12 - 37 turns

>37 turns

<90%

Customer On Time In Full % (by line)

Cost and Service

Finished Goods (days)

>62 days

62 - 41 days

<41 days

Stockturns Finished Goods

<12 turns

Oliver Wight Clients

Disadvantage

Parity

Advantage

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Forecast Accuracy

Forecast Accuracy %

<71%

Perfect Order Probability %

<70%

71 78%

>78%

Overall Supply Chain Metrics Total Supply Chain Cost % Sales

>11% 11 - 8%

70 78%

>78%

<8%

Oliver Wight Clients

Disadvantage

Parity

Advantage

Case Studies Company:

Issues Highly complex, competitive and challenging business performance goals High levels of inventory and deteriorating service

Value Delivered Inventory reduced by 50% Slow Moving and Obsolete (SLOB) rates dropped from 35% to 15%

Multinational cosmetics, skin care, fragrance, and personal care company.

Stock turns raised from 1.6 to 3.5 Service levels up to 98.5% Forecast errors halved OTIF improved from 40% to 95% Number of SKUs reduced from 7,500 to 810

IBP has allowed the company to develop a longer-term strategic view of its business and to implement highly effective gap-closing initiatives.

Integrated Business Management Leader

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Company:

Issues Marketplace changed with people spending more but shopping less, meaning Wrigley Poland lost impulse-buy opportunities

Manufacturer and marketer of chewing gum and confectionery â&#x20AC;&#x201C; market leader Poland.

Increased demand for cheaper goods Initiatives driving short-term benefits only

Value Delivered Improved forecast accuracy More transparent demand planning Improved product & portfolio management Simpler processes, lean and automated Achieving goals with reduced effort Greater visibility of gaps in plans and proactive management of risks and opportunities

IBP is now the way we run the business. Itâ&#x20AC;&#x2122;s helped us get better control and better prepared for the future, whatever it may hold.

IBP Process Leader

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Company:

Global Infant Formula Company

Issues Lack of financial integration inhibiting the dynamic financial decision making required in the business Competing in a volatile and dynamic industry S&OP process was established to enable demand/supply balancing but business recognized the need to enhance the process to one that helped focus on delivery of the business strategy (IBP) Establish ownership of the IBP process at leadership level

Value Delivered A more transparent financial outlook allowing the business to identify future risks and opportunities and gap close accordingly Able to handle the business with more confidence, working from one set of figures to assess the entire business situation Global consistency in the process Improved decision making led to optimized financial performance Significantly improved customer service levels Timely investment decisions made to exploit future demand

IBP standardises business processes, but it also allows you to be dynamic; it does not restrain you and that is vital.

Sales and Operations Planning Manager

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Company:

Multinational confectionery, food, and beverage company.

Issues MondelĂŠz International separated from Kraft Foods creating changes in brand identity, organization design, culture, IT, finance, suppliers and customers which became difficult to manage

Value Delivered Customer service improved to 98% Demand plan accuracy improved between 15 and 30% Inventory reduced by 15% Created a culture that was living up to its established and well-communicated values

IBP is a WIN/WIN â&#x20AC;&#x201C; it delivers superior business results while developing the next generation of MondelĂŠz talent to drive growth and to better manage the business leavers across our integrated business model.

Executive VP Human Resources

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Company:

Issues Extensive firefighting caused by changing priorities Different plants working to their own plans and few were aligned Communication delays

Multiple sets of numbers

Global winemaking and distribution business.

Value Delivered Greater integration and improved communication Spending less time reporting and more time planning Able to spot supply shortfall ahead of time Plugging the shortfall created a combined gross margin of $500k, which paid for another project implementation Aligned new product development with the strategic plan Reduced scrap rates in packaging by up to 60% incurring an annual saving of nearly 6 million Enabled consistent processes and behaviours globally

IBP is the way we manage the global businessâ&#x20AC;Ś Enjoy the benefits that transparency will bring.

CEO

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Company:

Global Packaged Foods Company

Issues Flat revenue and high margin growth over five years. Market share constantly challenged by changing consumer expectations and price Financial forecasts debated and financial plans not integrated Continuous struggle to receive timely and accurate data

Value Delivered Bottom and top line grew for the first time in five years Closed the projected shortfall from $100 million down to $8 million Senior management now spends the majority of its time planning the 12-24 month rolling horizon window versus the near-term Established a culture that looks at the business objectively, seeks the truth, and takes continuous action to address issues that threaten the achievement of the business goals

Our service levels are so good because IBP allows us to forecast the business two years out. Where we identified potential supply constraints and issues, we can manage slowly allocating stock, or deleting some non-profitable products to free up capacity or raw material.

Strategic IBP Manager

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Company:

Global Confectionery Manufacturer

Issues Rapid growth resulted in disparate processes No integration of business areas No long-term strategic view Cultural mindset hurdles Lots of firefighting

Value Delivered Revenue growth of 3% Regained another 4% market share Employees more engaged and motivated Greater visibility and predictability across all business areas Improved business efficiency Optimised asset utilisation and allowed them to manufacture an additional 3,000 tonnes of product Leadership focused 24 month to delivery strategy

They all walked away from the education sessions with something they could use in their own area. This was critical and Oliver Wight helped us to ensure tangible outcomes. It wasnâ&#x20AC;&#x2122;t just about learning something new; it was about learning something new that they could apply from that moment on.

S&OP Project Leader

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Company:

Multinational Brewing Company

Issues Bottom-quartile performer and relationship with retailers reached rock bottom Strong cultural resistance to change whilst working in silo masked a multitude of deeper business issues Big brands were declining due to changing consumer habits Government regulations changing the industry Inaccurate forecasts Volatility meant supply chain fell 15-20% short of start-of-the-monthly forecast Customer and internal sentiment of supply chain capability plummeting to an all-time-low

Value Delivered Savings being made in the supply chain Realistic forecasts lead to production targets being met Increased customer satisfaction through order fulfilment Working from a single set of numbers Integration between departments eradicated silos and transformed cultural behaviours Behaviour bias eliminated Forecast accuracy doubled from 35% to 65% Transparency and cross functional management of performance measure End-to-end collaboration Organisational changes & education to fit the roles & improve people capabilities

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Company:

Issues

ULSTER WEAVERS

Stalled growth in both sales and profit plans

Irish Textiles & Homeware Manufacturer.

Inefficiencies across the business Poor quality control Staff were using spreadsheets for everything Performance measures ranged from 42% (adherence to production plan) and zero (schedule adherence) No planning or forecasting taking place

Value Delivered Now profitable and growing at +30% a year Supplier delivery performance had climbed to 96% Customer delivery performance had climbed to 98% Deliver with quality Turnover increased by £15.5 million Internal supply chain integration

It’s the best thing that’s happened to our business. The vision for this business, is that it will set no boundaries for its growth. We have a lot of programmes of change ahead of us, but you can bet they’ve every chance of succeeding.

Managing Director

Some of our Consumer Product Group Clientsâ&#x20AC;Ś Beverage Company

Kimberly-Clark

Bunge

Molson Coors

Cargill

MondelĂŠz

Dairygold Food

Nampak

Ingredients

Revlon

Greencore Foods

SABMiller

Hunter Boot

The Wrigley Company

For further information on how Integrated Business Planning can help transform your business performance please contact us on +44 (0) 1452 397200 or hello@oliverwight.com

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Imagine the possibilities, realize the potential.

When you talk to Oliver Wight about improving your business, we’ll assume you want results, not just better processes - things like increased revenues and margins and greater market share. If you have the ambition, it is possible to make improvements that truly transform the performance of your organisation and create more fulfilling roles for the people within it. We believe this can only be delivered by your own people. So, unlike other consultancy firms, we transfer our knowledge to you; knowledge that comes from 50 years of working with some of the world’s best-known companies.

Oliver Wight has a long-standing reputation for innovation and we continually challenge the industry status quo, so you always get the latest in new thinking. Your Oliver Wight partners will use their real-world experience to ensure your people, business processes and technology are fully aligned and integrated right across your organization. They will coach, guide and inspire your people to drive change throughout your organization, allowing you to create a culture of continuous improvement and innovation that simply becomes for you ‘the way we do things around here’. It’s a proven, sustainable approach that will deliver results straight to the bottom line.

Oliver Wight EAME LLP The Willows The Steadings Business Centre, Maisemore Gloucester GL2 8EY United Kingdom T: +44 (0)1452 397200 F: +44 (0)1452 397230 hello@oliverwight.com www.oliverwight.com

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