commitment, culture, communication and · pdf filemove to base + lift forecasting process...
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COMMITMENT, CULTURE, COMMUNICATION AND TRUST: PREREQUISITES TO EFFECTIVE DEMAND & INVENTORY PLANNING
1 CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
Philip Conlon
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19
81
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86
19
91
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POWERFUL BRANDS COMBINE FORCES
2 CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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OUR PORTFOLIO HAS AMERICA’S TOP 10 COFFEE BRANDS
3 CONFIDENTIAL:FOR PRESENTATION PURPOSES ONLY
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UNMATCHED BRAND VARIETY & CHOICE… UNLIKE ANY OTHER SYSTEM IN THE WORLD
4 CONFIDENTIAL:FOR PRESENTATION PURPOSES ONLY
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Walmart Excl.
WINNING PRODUCT PLAN
CONFIDENTIAL:FOR PRESENTATION PURPOSES ONLY
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REVENUE GROWTH
6 CONFIDENTIAL:FOR PRESENTATION PURPOSES ONLY
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7 CONFIDENTIAL: FOR INTERNAL USE ONLY
70 500~ ~
*
CONFIDENTIAL:FOR PRESENTATION PURPOSES ONLY
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GROWTH PRESENTS CHALLENGES
8 CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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BUSINESS LANDSCAPE Demand Shifting Across Brands & Channels
9 CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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MERGER OF TWO DISTINCT CULTURES
10 CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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CALL TO ACTION 2015
11 CONFIDENTIAL:FOR PRESENTATION PURPOSES ONLY
Size of the Prize:
• $20M Revenue
• $40M Obsolescence
• $100M Cash Flow
• Executive Leadership Team Commitment • Mandate - Become More Predictable and
Accurate in Demand Planning
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KEY RECOMMENDATIONS TO SR. LEADERS
• Establish Senior Demand Review
• Implement Channel consensus process
• Forecast “Top Accounts” and “All Other” accounts
• Improve collaboration through weekly Top Account demand planning calls
• Redeploy demand planning resources appropriately
• Revise Forecast Accuracy Lags to align with supply lead times
• Define a firm period for Demand Planning by product group
CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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KEY RECOMMENDATIONS TO SR. LEADERS
• Align on forecast accuracy improvement targets by brand, channel and top account
• Leverage Demantra statistical engine and system functionality
• Move to Base + Lift forecasting model
CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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14
“Commitment is what transforms promise into reality.”
- Abraham Lincoln
CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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Action P1 P2 P3 P4 P5 P6
Develop Demand Planning Strategy & Plan l
Gain Alignment with Leadership on Strategy & Plan l
Gain Alignment on weekly Forecast Accuracy measures l
Gain Alignment on Forecast Accuracy Improvement Goals l
Future State Demand Planning Training – Sales CFTs, DP Teams l
Implement Channel Consensus Process l
Implement Senior Level Demand Review l
Quarterly Forecast Accuracy Improvement Goals in Place for Q2 through Q4
l
Move to Base + Lift Forecasting Process (Demantra Config) l
Implement Demand Planning Firm Period Change Process l
OUR PATH FORWARD
15 CONFIDENTIAL:FOR PRESENTATION PURPOSES ONLY
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WHY FORECASTING MATTERS
16 CONFIDENTIAL:FOR PRESENTATION PURPOSES ONLY
The forecast is authorization to spend the
company’s money
Source: DuPont Financial Performance Model
Educating the Masses
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17
Every management mistake ends
up in inventory. – Michael Bergerac, Chairman of Revlon 1975-1985
CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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GARTNER HIERARCHY OF METRICS
Source: Gartner The Hierarchy of Supply Chain Metrics: Diagnosing Your Supply Chain Health G00278903
CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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19
Culture is the way you think, act and interact…
CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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Consensus Forecast
- Supports financial plan
- Operational Forecast
- Procurement Forecast
- Unbiased Forecast
CONSENSUS FORECAST DEFINED Demand Planning “Voice of Reason”
20
Sales Outlook Forecast
• Outlook plan forecast
• Promotional activity
• Customer Team Input
Product Forecast
• Stat driven
• POS input
• New Products
Sales Outlook and Consensus forecasts may differ
• Consensus team manages the gap between sales and operational forecasts
• Lean out – Live with gap - Address through inventory or manufacturing flexibility
• Lean in – Increase forecasts ahead of gap closing activities to reduce gap
CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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Grocery Mass Retail Club
A NEW WAY OF WORKING WITHIN COMMERCIAL TEAM
21
Coffee
Hot Tea
Dairy Based
Partners
Product Based
Forecasting
Field Sales Team Input
Channel Leaders P
rod
uct
Bas
ed
De
man
d P
lan
nin
g M
anag
er
NPD / EOL
CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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• Education
• System and process training
• Ownership of forecast accuracy goals
• Quantifying impact of poor forecasting
• Weekly post mortem on results within each team
• Demonstrating precisely where forecasts have had an impact on business results – CFR, inventory, financial… good or bad
CREATE A CULTURE OF ACCOUNTABILITY
22 CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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• Trust and credibility had to be earned
• Removing bias from forecasts and supply plans
• Demonstrating how stat forecasts were effective
• Examples of how trust is earned across functions
• Highlighting wins where trust enabled greater performance
BUILD TRUST ACROSS FUNCTIONS
23 CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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NEW CHALLENGES
24 CONFIDENTIAL: FOR INTERNAL USE ONLY
• Amazon effect • Retailer E-Commerce expansion • Grocery consolidation • Unlicensed competition • Licensed Private Label expansion • Continued channel shifting
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WHAT GOT US HERE WON’T GET US THERE Current Improvement Activities
25 CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
• Streamlined organization • Trade inventory analysis • Developing FVA vs. Stat or naïve metrics • Forecastability analysis
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Grocery Partner Retail Club
STREAMLINED ORGANIZATION – E2E SCM
26
Field Sales Team Input
SC Pillar Leaders
CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
EComm/ Amazon Demand
Planning
Supply Planning
Key Account Leads
Customer Care
Logistics
New Product Management
Commercial Team
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27 Data Sources: Shipments: EBU Cube, POS: System Wide POS OH Inventory: Cumulative Shipments - POS
CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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• Predictive analytics • Inventory optimization • Demand sensing • Machine learning • Industry 4.0/ IOT
REMAINING OPPORTUNITIES
28 CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY
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Q&A
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