Joint Business Plan
NESTLE and TESCO in Poland
Janusz Selwa – TESCO Polska (Poland)
Michal Rubaszko – NESTLE Polska (Poland)
TESCO Globally
TESCO operates currently in
countries.
TESCO in Poland
TESCO is a third player
on Polish retail market
and first HM chain in
Poland.
Current
format
structure
HYPERMARKETS
Area
No. of sku
No. of outlets
4 – 12 k m2
50.000
53
DDS
2 - 3 k m2
12.000
41
1K + SAVIA
1 k m2
3.500
232
NESTLE in Poland
Culinary
Confectionery
Beverages
Pet Food
Infant Nutrition
Cereals
Waters
Lody
FoodServices
What is
Joint Business Planning...?
What is Joint Business Planning?
It all started with the UK
•5 years ago, Nestlé in the UK had a
negative growth rate with Tesco, at a time
when Tesco was increasing it’s share of
the UK Grocery market. Issues included:
– A fragmented Nestlé approach to the
Tesco business
– No endorsement by Senior Management to
the plans
– No issue escalation process
INTERVENTION
What is Joint Business Planning?
Business Unit’
Sales network
JBP4 +6.5%
JBP 3=JBP2 + focus
on key categories
+8.9%
JBP 2 = JBP1 + Key
Initiatives +9.8%
TOP Management Driven
JBP 1 –It worked +8.9%
Fragmented
Approach
Request to
form Teams
1998 - Tesco
attempted to mirror
Wal-Mart Suppliers
DEATH
SPIRAL
Management Model
2001/2
Understood what was
‘Really,Really
Important
Easy to Attack –
Difficult to do Business
2002/3
Listen,
Acknowledge,
Explore and
Respond
2003/4
2004/5
2005/6
• Flexibility on How
we Delivered
•Shared What was
Important to Us
2006/7
Traditional negotiations
What is Joint Business Planning?
Annual Negotiations
JBP process
Sharing objectives
Trade Terms
Jointly Aligned
Shopper Based Plan
Negotiate
the gaps
Activity Plan
JBP incl. TT
What is Joint Business Planning?
Fundamental changes made…..
–
–
–
–
–
Greater listening and understanding on both sides
Increased trust
Increased transparency and visibility of business
Shared more and aligned plans together
Joint ownership responsibility / mutual goals
What is Joint Business Planning?
Each Category Produces and Agrees a Business Plan
Plan Program
I Can Get What I Want
+68% +106% +30%
%Growth
TescoProfits (Mio)
%Growth
10.60
29
35
+30%
9.1%
Service Level
91%
95%
TARGETS
We Deliver Consistently Every Day
We Make Our Jobs Easier to Do
Sales Test v
Control
B:+1.5%
P:+1.2%
By Who
When Does
it Need to be
Done By
Q1 Q2 Q3 Q4 Next Steps
2006/9
First for innovation:
- Format plan for ALL NPD, NPD highlighted as a % in
JBP, Prioritised NPD based on Size of Prize
-Drive On-Shelf Availability through better in-store
support, using "Always Available"
2006/7
Provide best-in-class category insight for every Tesco
format:
-Extras-Superstores-Metro-Express-Dot.Com
2006/7
Tesco & Nestle to agree a plan for "Helping you be
healthier everyday" with significant focus on selected
categories
No Invoicing Queries - All invoices processed
accurately and paid on time
New products setup on system within 12wks of launch
2006/7
Provide category
expertise to support
every range review for
every Tesco format
Jointly agreed 12 month
healthier plan worth
£TBCm RSV
100%
75%
100%
WIP
98.5%
YTD Range:
Winning the Treble: Promotions, NPI, Petcare growth
92.5% - 97.6% Jointly agree best-in-class processes for the above
2006/7
2006/7
2006/7
2006/7
Focus on Colloborative Planning:
1] Reduce Failed To Arrive (FTAs) (less than 1%)
2] Seasonality
3] Base Sales
Vendor Managed Inventory (VMI)
2006/7
Investigate and implement innovative RRP and MU
solutions where it makes people's jobs easier
Efficient Checking - To enable faster vehicle turnaround
at Tesco Depots
2006/7
TBC
TBC
TBC
TBC
TBC
TBC
£xxxm, +xx.x%
Drive categories' sales through good Joint Business
Plans
2006/7
Roll-out across all Nestle
categories
95% of range in
c.85%
RRP/MUs
Phased roll-out across all
Nestlé categories
2007/8
2006/7
Better, Simpler, Cheaper
12.1% +15.1% +18.5%
95%
We Try To Get It Right First Time
We Always Save Time and Money
+44% +174% +21% +111%
Total Margin
Drive £1m incremental
sales at RSV
Earn Lifetime Loyalty
74
YTD Achieved What Needs To Be Done
£33m category Petcare step change 3 year growth plan
growth (2006
YTD)
45% market share within WIP
12wks of launch
CUSTOMER
Shopping Trip
400
OPERATIONS
310
95%
BUSINESS PLAN
COMMUNITY
240
2009
FINANCE
116.5
2008
The Way We Work Together
Sales Turnover (Mio)
2007
PEOPLE
2006
Overall KPI Target
£150m in 3 years
Be Responsible, Fair and Honest
Be a Good Neighbour
Grow Sales
Maximise Profit
Developing the Best People
£xxxm, +xx%
xx%, +x.x%pts
Build a Joint Business Plan for every Format
Drive categories' profit and margin through good Joint
Business Plans
An agreed Induction Plan
used by both parties
Develop a Joint Induction Plan for all Nestle-Tesco
employees (including Helping Hands / TWIST)
TBC
Tesco to share with
Nestle all relevant
customer plans
Rated as Top 3 supplier
on use of TescoLink by
Tesco
Provide visibility of Tesco's priorities through the
Customer Plans
2006/7
Best-in-Class Application of TescoLink
2006/7
2006/7
REVIEW “BRAG”
•
A simple document sets out the annual business against all parts of the
Tesco steering wheel and a set of agreed joint targets
•
Reviewed every period between Account Manager and Buyer using the Blue,
Red Amber Green traffic light process
What is Joint Business Planning?
•
•
•
•
•
•
We share our ambition for categories and brands
based on shopper and consumer insight
We build a plan that addresses key consumer/
shopper needs and Tesco/Nestlé opportunities
We commercialise the plan to work for Nestlé
and Tesco using all “levers” e.g. innovation,
distribution, price, promotion, display, front/back
margin…to sell more product to more shoppers
We set this plan against the Tesco Steering
Wheel and the ELH Shopping Trip
We build a month by month execution plan
We review regularly and course correct to get
achieve goals
What is Joint Business Planning?
3. Write the Business Plan & Agree Jointly
0. Identify Point of Departure
1. Share plans, ambitions & insights
Category Plan
icl. 3-year
vision (Nestlé)
Shopper
Insight
(Nestlé/Tesco)
4. Execute the Plan
Customer
Strategy
(Tesco)
2. Identify the mutual opportunities
5. Review & Course Correct
What is Joint Business Planning?
PLAN
DO
Plan Program
I Can Get What I Want
CUSTOMER
Shopping Trip
REVIEW
YTD Achieved What Needs To Be Done
£33m category Petcare step change 3 year growth plan
growth (2006
YTD)
45% market share within WIP
12wks of launch
Drive £1m incremental
sales at RSV
Sales Test v
Control
B:+1.5%
P:+1.2%
2006/7
2006/7
Tesco & Nestle to agree a plan for "Helping you be
healthier everyday" with significant focus on selected
categories
No Invoicing Queries - All invoices processed
accurately and paid on time
New products setup on system within 12wks of launch
2006/7
100%
WIP
We Deliver Consistently Every Day
98.5%
YTD Range:
Winning the Treble: Promotions, NPI, Petcare growth
92.5% - 97.6% Jointly agree best-in-class processes for the above
We Make Our Jobs Easier to Do
We Always Save Time and Money
Roll-out across all Nestle
categories
95% of range in
c.85%
RRP/MUs
Phased roll-out across all
Nestlé categories
When Does
it Need to be
Done By
Q1 Q2 Q3 Q4 Next Steps
2006/9
Provide best-in-class category insight for every Tesco
format:
-Extras-Superstores-Metro-Express-Dot.Com
We Try To Get It Right First Time
75%
By Who
First for innovation:
- Format plan for ALL NPD, NPD highlighted as a % in
JBP, Prioritised NPD based on Size of Prize
-Drive On-Shelf Availability through better in-store
support, using "Always Available"
Provide category
expertise to support
every range review for
every Tesco format
Jointly agreed 12 month
healthier plan worth
£TBCm RSV
100%
Earn Lifetime Loyalty
OPERATIONS
Course Correct
Overall KPI Target
£150m in 3 years
Focus on Colloborative Planning:
1] Reduce Failed To Arrive (FTAs) (less than 1%)
2] Seasonality
3] Base Sales
Vendor Managed Inventory (VMI)
Investigate and implement innovative RRP and MU
solutions where it makes people's jobs easier
Efficient Checking - To enable faster vehicle turnaround
at Tesco Depots
2006/7
2006/7
2006/7
2006/7
2006/7
2007/8
2006/7
2006/7
Ensuring the plan stays on course and adapting to changing
circumstances is a fundamental part of the process
COMMUNITY
FINANCE
PEOPLE
The Way We Work Together
Better, Simpler, Cheaper
TBC
TBC
TBC
TBC
TBC
TBC
£xxxm, +xx.x%
Drive categories' sales through good Joint Business
Plans
2006/7
Be Responsible, Fair and Honest
Be a Good Neighbour
Grow Sales
M aximise Profit
Developing the Best People
£xxxm, +xx%
xx%, +x.x%pts
Build a Joint Business Plan for every Format
Drive categories' profit and margin through good Joint
Business Plans
An agreed Induction Plan
used by both parties
Develop a Joint Induction Plan for all Nestle-Tesco
employees (including Helping Hands / TWIST)
TBC
Tesco to share with
Nestle all relevant
customer plans
Rated as Top 3 supplier
on use of TescoLink by
Tesco
Provide visibility of Tesco's priorities through the
Customer Plans
2006/7
Best-in-Class Application of TescoLink
2006/7
2006/7
Steps we took in Poland...
Preparations on NESTLE side
SALES
LOGISTICS
MARKETING
FINANCE
Opening for each other
Top to Top meeting
Meeting held In October 2007
- to share business vision;
- to discuss strategies;
- to improve relations.
Business Leders Meeting
TESCO Conference in
November 2007
- to show our strategy to
TESCO employees (around
200 managers);
Wisła – March 2008 – Joint Business Plan Workshop
Both sides were entirely commited
to deliver the Joint Business Plan.
Meeting participants from:
- Marketing
- Sales
- CCSD
- Logistics
Action Plan set for the rest of 2008
04
05
06
07
08
09
10
11
12
CAT-MAN
Zupy jak Buliony
Zupy
Pomysł
Wellness
u mamy z nożem Standard
na...
nowe
Majonez
nowy
Akcja
Pomysły
+ gratis
majonez Święta
na...
CROSS - MERCH
Range Review
Wellness
Kubek
w 1K
3w1
(20+4)
Espiro NESCAFE Urodziny
(tailor) Collection TESCO
Festiwal
Kawy
Akcja
Święta
CROSS - MERCH
CAT-MAN
Wellness
Princessa
akcja dla
TESCO
Princessa,
Princessa Festiwal Akcja
KitKat,
on-pack Słodyczy Święta
AERO
CROSS - MERCH
Joint Business Plan and Scorecard
All the prepared plans were
wrote down and put into a
scorecard. Next step is to
track if they are properly
executed.
Execution of Joint Business
Plan has to bring
measurable benefits in area
of sales and profits.
Joint Logistics Innitiative
Parameters controlled:
Central Level
Local Level
shelf fill rate
shelf capacity
sales factor
stock in outlets
promotional order
promo order proposal
OOS in TESCO (NESTLE products)
OOS reduction
6,00%
5,00%
by
4,00%
43%
3,00%
2,00%
1,00%
0,00%
OOS
7
8
9
10
11
12
13
14
15
16
17
19
20
21
22
5,60%
5,40%
5,70%
5,17%
5,10%
4,27%
3,95%
5,09%
5,41%
4,55%
4,93%
3,19%
3,60%
3,90%
4,20%
Develop People in JBP way
Tesco – Nestle Purina workshop held in St.Louis helped to support
plan for category development via stakeholders of both partners
WE MANAGED TO INVOLVE
ALSO HUNGARIAN TEAM
AFTER VISIT IN LEARNING CENTRE WE GOT STRONG PLAN FOR FURTHER GROWTH:
all stakeholders from Tesco and Purina are involved
we got strong commitment from Tesco to take part in 1bln Euro market opportunity in Poland – to be
presented at Tesco board
agreed shelf remerchandising from horizontal to vertical blocking
agreed repositioning of snacks in category – exploring potential of impuls segment
branded gondolagondola-end test in 33-4 locations (Q4.2008)
special pet event with local media engagement – 3 top locations (10.08)
cooperation on Tesco web site
detailed challenging plan covers 32 points in total.....
Joint Category Management
Categories
Date of change
Implementation
Instant
Coffee
Countlines
02.2008
05.2008
Culinary
06.2008
„Donuts Promo”
• Total number of stands - 951
–12 stands in each HM
–5 stands in each DDS
–1 stand in each 1K
• No. of outlets: 296
Gdynia
Radomski
Gdynia –– Rafał
Radomski
Poznań Opieńskiego
–Rafał
Maciek
Jezierski
Kraków Kapelanka
– Tomek Tokarski
„Donuts Promo”
Donuts in TESCO
2000
1800
1600
1400
1200
1000
Increase +41%
395.000 pc.
800
600
400
200
0
W1
W2
W3
W4
W5
W6
Donuts 2007
900
1026
1000
1200
1300
1026
Donuts 2008
1000
1176
1200
1900
1700
1176
Sprzedaż NCL 200g w sztukach w Hipermarketach
Sprzedaż N.Gold 200g w sztukach w Hipermarketach
18000
4000
16000
3500
14000
3000
12000
2500
10000
2000
8000
1500
6000
4000
2000
0
W1
W2
W3
W4
NCL - 2007
6275
7564
7383
NCL - 2008
10829
10910
8104
Increase 40%
12.500 pc.
W5
W6
6943
13596
11115
13445
16464
14259
Increase 106%
4.580 pc.
1000
500
0
W1
W2
W3
W4
W5
W6
NESCAFE Gold - 2007
1026
1222
1132
1081
1494
1723
NESCAFE Gold - 2008
1176
1078
1151
2381
2793
3709
Sales results for 2008
I - VIII 2008
35 000 PLN
I - VIII 2007
+ 29%
+31%
30 000 PLN
+23% +21%
25 000 PLN
+43%
+40%
20 000 PLN
+27%
15 000 PLN
+31%
10 000 PLN
-2%
+4%
5 000 PLN
Da
iry
re
am
Ic
e
C
ar
e
Pe
tC
Co
nf
ec
tio
ne
ry
at
er
W
rit
io
n
nu
t
In
fa
nt
C
er
ea
ls
Be
ve
ra
ge
s
Cu
lin
ar
y
0 PLN
7 principles that support JBP
1
The consumer / Shopper is King
2
We set “SMART” goals
3
Clear on the “what” (i.e KPI’s) BUT FLEXIBLE on the “How”
4
Senior Management endorsement and visible support
5
6
7
A process, not an event – PLAN, DO, REVIEW
Focus on the 90% we agree and work through the 10% we don’t
“What’s right” mindset v. “Who’s right”
Efficient Distribution and Transportation