DRAFT V-9 July 2010
New Ways of Working Together
Pat Conklin, Chief Customer Officer, Procter & Gamble- Asia
The light bulb was not invented from continuous
Innovation of a Candle
The case for change
• 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
“Stores are over SKU’d”
New SKUs
Registered
1980
2,899
2005
10,651
2007
85,000
Average Items in a
Typical Supermarket
The Case
for Change
1987
24,500
1997
30,000
2007
45,000
Source: Global Commerce Initiative New Ways of Working Together
Inventories are
too high
The Case
for Change
“There is too much of
the stuff consumers
don’t want and not
enough of what they
do.”
Out-of-stocks
persist
The Case
for Change
The Case
for Change
Trading partners
continue to focus on
business minutiae
instead of shoppers
“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 chain
over the next decade.
The industry must
Redefine the 2016 Value Chain
Trading Partners must more readily and freely
Share Information
In their Bi-Lateral relationships
The industry must
Develop New Ways of Working Together
New Ways of Working Together –
A Consumer Goods Forum Initiative
Jean-Paul AGON
Chief Executive Officer
L’OREAL
Brenda C. BARNES
Chairman & Chief
Executive Officer
SARA LEE
CORPORATION
Warren F. BRYANT
Chairman
NATIONAL
ASSOCIATION OF
CHAIN
DRUG STORES
Project Leaders
Manufacturers
JOHNSON & JOHNSON
CARREFOUR
NESTLÉ
KROGER CO.
PROCTER & GAMBLE
METRO GROUP
WAL-MART
J.M. SMUCKER
WEGMANS
COCA-COLA
SAFEWAY
John RISHTON
Chief Executive Officer
Royal Ahold
Bob MCDONALD
Chairman, President &
Chief Executive Officer
THE PROCTER &
GAMBLE COMPANY
Retailers
Eckhard CORDES
KRAFT FOODS
Chairman of the
Management Board
UNILEVER
& Chief Executive Officer
METRO AG
Lars OLOFFSON
Chief Executive
Officer
CARREFOUR
GROUP
Colleen GOGGINS
Worldwide Chairman,
Consumer Group
JOHNSON & JOHNSON
TESCO
Legal Counsel
Motoki OZAKI
President Kao
Michael KOK
Group CEO
Dairy Farm
Sir Terry
LEAHY
Chief Executive
Officer
TESCO PLC
Mike DUKE
President &
CEO
Wal*Mart
Stefano PESSINA
Executive
Chairman
ALLIANCE
BOOTS
Paul POLMAN
Chief Executive
Officer
UNILEVER
New

Ways of Working Together
Eliminate supply chain disruptions, enable growth
Industry Track (Collaborate)

Documentation,

Guiding

Standards
Education,
Communication
Principles and
Frameworks
Focus

Connected

Prepare

Share Our

on
Consumer
Business
Information
People for
New World
Supply
Chain
Best Practices/

• Strategy

Alignment
• JAG
Framework
• Common

• Knowledge,


Goals &
Measures
Skills &
Capabilities
• Information
Sharing*
• Incentives &
Rewards
• EPC
• organisation
Design
• Data Sync
Strategic Issues

Between Trading
Partners
Common Goals,

Common Measures
Share


Results
• Sustainability


• Cross
Industry
Integration
• Integrated
Supply Chain
pecific Measures
S
& Priorities
Trading Partner Track (Competitive Advantage)

*Note: Utilizations of Industry Standards

Other Data


Sharing
Opportunities
Consumer/
Shopper
Satisfaction
New

Ways of Working Together
Eliminate supply chain disruptions, enable growth
Industry Track (Collaborate)

Documentation,

Guiding

Standards
Education,
Communication
Principles and
Frameworks
Focus

Connected

Prepare

Share Our

on
Consumer
Business
Information
People for
New World
Supply
Chain
Best Practices/

• Strategy

Alignment
• Joint
Business
Planning
• Common

• Knowledge,


Goals &
Measures
Skills &
Capabilities
• Information
Sharing*
• Incentives &
Rewards
• EPC
• organisation
Design
• Data Sync
Strategic Issues

Between Trading
Partners
Common Goals,

Common Measures
Share


Results
• Sustainability


• Cross
Industry
Integration
• Integrated
Supply Chain
pecific Measures
S
& Priorities
Trading Partner Track (Competitive Advantage)

*Note: Utilizations of Industry Standards

Other Data


Sharing
Opportunities
Consumer/
Shopper
Satisfaction
• 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
ocus
F
on
Consumer
• Embrace joint long-term planning
– Annual planning is often insufficient
– IP protection and trust
• Implement longer term planning
processes
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 liaison, planning
coordination, agreement and
execution follow-up
Cross-functional teams drive
analysis and planning to
support Buyer-Seller
Step 1
Review the economic and
shopper environment
Step 5
Monitor &
adapt
Conditions
for success
Fact based
• Help trade partners build
rationale for their growth
strategy
• Demonstrate the objective
selection of relevant growth
levers
• Allow reliable quantification
of the opportunities and
expected ROI
Step 4
Execute the
JAG plan
Step 2
Review
sales and
agree on
prioritized
growth
levers
Step 3
Define and
agree on
3-year
JAG plan
New

Ways of Working Together
Eliminate supply chain disruptions, enable growth
Industry Track (Collaborate)

Documentation,

Guiding

Standards
Education,
Communication
Principles and
Frameworks
Focus

Connected

Prepare

Share Our

on
Consumer
Business
Information
People for
New World
Supply
Chain
Best Practices/

• Strategy

Alignment
• JAG
Framework
• Common

• Knowledge,


Goals &
Measures
Skills &
Capabilities
• Information
Sharing*
• Incentives &
Rewards
• EPC
• organisation
Design
• Data Sync
Strategic Issues

Between Trading
Partners
Common Goals,

Common Measures
Share


Results
• Sustainability


• Cross
Industry
Integration
• Integrated
Supply Chain
pecific Measures
S
& Priorities
Trading Partner Track (Competitive Advantage)

*Note: Utilizations of Industry Standards

Other Data


Sharing
Opportunities
Consumer/
Shopper
Satisfaction
• Common Goals and
Common Measures
– Based on a common language
• GS1 “Trading Partner
Performance Management”
Standard
• Global Data Synchronization
Connected

Business
Information
New

Ways of Working Together
Eliminate supply chain disruptions, enable growth
Industry Track (Collaborate)

Documentation,

Guiding

Standards
Education,
Communication
Principles and
Frameworks
Focus

Connected

Prepare

Share Our

on
Consumer
Business
Information
People for
New World
Supply
Chain
Best Practices/

• Strategy

Alignment
• JAG
Framework
• Common

• Knowledge,


Goals &
Measures
Skills &
Capabilities
• Information
Sharing*
• Incentives &
Rewards
• EPC
• organisation
Design
• Data Sync
Strategic Issues

Between Trading
Partners
Common Goals,

Common Measures
Share


Results
• Sustainability


• Cross
Industry
Integration
• Integrated
Supply Chain
pecific Measures
S
& Priorities
Trading Partner Track (Competitive Advantage)

*Note: Utilizations of Industry Standards

Other Data


Sharing
Opportunities
Consumer/
Shopper
Satisfaction
Five Elements of Change?
Change
Vision
Vision
Skills
Measures /
Rewards
Resources
Action
Plan
Change
Skills
Measures /
Rewards
Resources
Action
Plan
Confusion
Measures /
Rewards
Resources
Action
Plan
Anxiety
Resources
Action
Plan
Gradual
Change
Action
Plan
Frustration
Prepare

People for
Vision
Skills
New World
Vision
Skills
Measures /
Rewards
Vision
Skills
Measures /
Rewards
Resources
False
Starts
• Understand the Barriers and
Enablers to long term, shopper
focused business planning
Prepare

People for
New World
• Transform people performance
incentives and rewards
• Build knowledge, skill and
capability sets
• Design organisational structure
around consumer needs and
drivers
New

Ways of Working Together
Eliminate supply chain disruptions, enable growth
Industry Track (Collaborate)

Documentation,

Guiding

Standards
Education,
Communication
Principles and
Frameworks
Focus

Connected

Prepare

Share Our

on
Consumer
Business
Information
People for
New World
Supply
Chain
Best Practices/

• Strategy

Alignment
• JAG
Framework
• Common

• Knowledge,


Goals &
Measures
Skills &
Capabilities
• Information
Sharing*
• Incentives &
Rewards
• EPC
• organisation
Design
• Data Sync
Strategic Issues

Between Trading
Partners
Common Goals,

Common Measures
Share


Results
• Sustainability


• Cross
Industry
Integration
• Integrated
Supply Chain
pecific Measures
S
& Priorities
Trading Partner Track (Competitive Advantage)

*Note: Utilizations of Industry Standards

Other Data


Sharing
Opportunities
Consumer/
Shopper
Satisfaction
• Industry and trading
partners must do things
differently
• Adopt more sustainable
business practices
• Collaborative Transport
Management, Empty Miles
hare Our
S
Supply
Chain
• 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
Focus

Connected

Prepare

People for
Share

Our
Supply
common
goals,
common
measures
and
information
visibility
to
act
on.
on Consumer
Business
New World
Chain
• Share our Supply Chain
will not be possible without understanding how
Information
every decision impacts the shopper, or if the way we measure success is
different.
optimize
of the
chain, but sub• Common

Goals components
&
• Strategy Too often we

• Knowledge,


Skillssupply
&
• Sustainability


Measures
Alignmentthe whole
Capabilities
optimize
• Cross Industry
• JAG Framework
• Information
Sharing*
• Incentives &
Rewards
• EPC
• organisation
Design
• Data Sync
Integration
• Integrated Supply
Chain
An Integrated Approach to
Better Business Results
New Ways of Working Together will require:
– Leaders who inspire by example
– Honesty, Integrity and Credibility
– Transformation of Business information
•
•
•
•
•
•
So, what
do we do
about it?
Visible
Connected
Accurate
Informative
Actionable
Relevant
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?