essential lessons from monthly business planning at nestlé
TRANSCRIPT
Monthly Business Planning at Nestlé DSD – Essential Lessons
Geoff Fisher – Dir. Of Supply Chain, Nestle DSD
Anthony Reese – Partner, IBP2 CPIM
Speaker Background
Geoff Fisher Director of Supply Chain, Nestle USA – Direct Store Delivery Div. Before merging with Nestle, he served in the same capacity for Dreyer’s Ice Cream where he was a member of the Supply Chain team for over 14 years. Before starting his rewarding (and tasty) career in ice cream, Geoff was a consultant for 9 years with Andersen Consulting and Price Waterhouse in the Consumer Products and Retail industry segments.
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Speaker Background
Anthony Reese CPIM Is a founding partner at Integrated Business Planning Associates and is a visionary leader with passion for bringing exciting products to market. His early interest in cars led to his first job as an auto mechanic and then into an impressive career in the automotive/motorcycle industry. Along the way, Tony earned two advanced degrees from MIT and now brings in-depth knowledge of Product Lifecycle Management along with strong understanding of Sales and Operations Planning and its current best practice form, Integrated Business Planning.
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Presentation Outline
• A Business Overview
• Our Planning Challenges
• Getting Started
• The Winning Game Plan
• So What Happened?
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Nestlé DSD – An Overview
Great Brands
National Network
Superb “To The Shelf” Service
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Nestlé DSD – An Overview
= Happy Consumers!
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Business Planning Challenges
• Highly seasonal
• Highly promoted
• Large network of demand points
• Capacity Constrained
• Organizational Challenges
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Planning Challenges – Seasonality
• Two Highly Seasonal Businesses
• Two Separate Planning Teams
• One Supply Chain
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Planning Challenges – Promotions
• Our Promotions Do Well
• Planning For Them Is Challenging
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Planning Challenges – Geography
• Over 100,000 Sell To Locations
• Over 75 Warehouses
• -20F Cold Chain
• Many Plants & Lines
• Over 1,000 SKUs
• Short Shelf Life
• A Daily & Weekly Business Pulse
• A High Service Level Expectation
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* Demonstrative Data Only
Planning Challenges – Constraints
• Tight capacity on popular product lines
• Requires longer range forecast accuracy
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Planning Challenges – Organization
• PLAN is king and predictability is rewarded
• Unwillingness to call off of Plan
• Skip over trade realities until too late
Below Plan Plan
S&OP Forecast?
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Getting Started
• The Right Coach
• Making A Case For Change
• Start The Project
• Remain Open To Change
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Getting Started – Find A Coach
• Design A Winning Game Plan from Experience
• Guides Project Around Potential Pitfalls
Alright Folks! I will show you how we can win at this game! But first – let’s make sure we are warmed up and ready to
do the right work!
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Getting Started – The Case For Change
Huddle Play: Consensus Demand Only
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Partial Huddle: Finance &
Demand Planning
Other Team Members On The Sidelines
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Getting Started – The Case For Change
Lack of a huddle forced “at the line” audibles
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Players Join The Game After The Huddle – Ready
To React
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Getting Started – The Case For Change
Other operational forecasts not aligned
Many “broken plays” and missed scoring opportunities – big plays always needed to achieve PLAN
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Getting Started – Project Start Up
• Gained executive support for an S&OP Project
• Built a core team
• Some skeptics thought we were fine
• As-is Sessions were cathartic – the dysfunction was unanimous
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Getting Started – Changed Game Plan
• Crossed paths with a new Monthly Business Planning project out of HQ
• Saw the approach as aligned with our To-be approach with the addition of better customer alignment highlighted during the As-is
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Winning Game Plan
• Define The Core Process
• Build The Transition Plan
• Execute Flawlessly
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The Winning Game Plan – MBP
Monthly
Account
Review
Updated Customer Demand Forecast
Customer-Level Inputs
Monthly
Sales
Review
Updated Business Demand Forecast
Consol. Business Demand Forecast
Monthly
Gap
Review
Updated P&L
Forecast & Scenarios
New P&L Forecast
Monthly
Forecast
Review
Aligned Business Forecast
Full Business Forecast
Monthly
Operations
Review
Aligned Supply
Outlook
Aligned Business Forecast
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The Winning Game Plan – Transitions
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The Winning Game Plan – Execution
• Assigned meetings to functions/leads
• Rolled out one meeting at a time, get good at the basics
• Broke old habits and held Execs out of early cycle meetings
• Created safe environment for start up meetings and feedback
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So What Happened?
• Results Achieved
• Best Practices
• Take-Aways
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Results Achieved
• Best Ever Forecast Performance (>5 percentage points improvement)
• Better and Earlier Alignment on “One Number” (Proactive decisions made earlier)
• Cross-functional Engagement (Right People + Right Topics + Right Time = Trust)
• Achieving Plans with Less Stress (Eliminated off-cycle meetings/decisions)
• Worldwide Standard Process for S&OP
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Lessons Learned – Best Practices • Create a Safe Environment
• Start with unconstrained demand
• Constrain Transparently
• Align P&L on Constrained Demand
• Collaborate – Share Leadership across all key planning functions (Right People, Right Topics, Right Time)
• Track Implementation To Ensure Process Fidelity
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Lessons Learned – Take-Aways
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Our MBP Mantra
When you are not feeling the MBP magic, just boldly say our project slogan…
“MBP IS FOR ME!”
And you will feel happy inside
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Questions
Contact Information
Geoff Fisher, Oakland, California
Anthony Reese, San Jose, California