mr patrick g. gonklin

8/6/2019 Mr Patrick G. Gonklin

1/22

New Ways of Working TogetherPat Conklin, Chief Customer Officer, Procter & Gamble- Asia

The light bulb was not invented from continuousInnovation of a Candle


2/22

The case for change

We have been talking about Collaborative Commerce andCollaboration for years.

Efficient Consumer Response was founded on the

Strategies of: Efficient Assortment

Efficient Replenishment

Efficient Promotion

Efficient New Item Introduction

Yet todays Supply Chain isSTILL filled with waste.

The Case

for Change


3/22

Stores are over SKUStores are over SKUddNew SKUsNew SKUs

RegisteredRegistered

The Case

for Change

1980 2,899

2005 10,651

2007 85,000

Average Items in aAverage Items in a

Typical SupermarketTypical Supermarket

1987 24,500

1997 30,000

2007 45,000

Source: Global Commerce Initiative New Ways of Working Together


4/22

Inventories areInventories are

too hightoo highThere is too much of

the stuff consumersdont want and not

enough of what they

do.

The Case

for Change


5/22

OutOut--ofof--stocksstocks

persistpersist

The Case

for Change


6/22

Trading partnersTrading partners

continue to focus oncontinue to focus onbusiness minutiaebusiness minutiae

instead of shoppersinstead of shoppers

The Case

for Change


7/22

The best way to

predict the future isto invent it.

Alan Kay, noted

computer scientist

Forces and trends that have

the potential

to significantly alter theindustrys value chain

over the next decade.


8/22

The industry must

Redefine the 2016 Value Chain

Trading Partners must more readily and freely

Share InformationIn their Bi-Lateral relationships

The industry must

Develop New Ways of Working Together

New Ways of Working Together


9/22

Manufacturers Retailers

JOHNSON & JOHNSON CARREFOUR

NESTL KROGER CO.

PROCTER & GAMBLE METRO GROUP

KRAFT FOODS WAL-MART

UNILEVER TESCO

J.M. SMUCKER WEGMANS

COCA-COLA SAFEWAY

Legal Counsel

Eckhard CORDES

Chairman of the

Management Board

& Chief Executive Officer

METRO AG

Sir TerryLEAHY

Chief Executive

Officer

TESCO PLC

Stefano PESSINAExecutive

Chairman

ALLIANCE

BOOTS

Lars OLOFFSONChief Executive

Officer

CARREFOUR

GROUP

Mike DUKE

President &

CEO

Wal*Mart

New Ways of Working Together A Consumer Goods Forum Initiative Colleen GOGGINSWorldwide Chairman,

Consumer Group

JOHNSON & JOHNSONJean-Paul AGON

Chief Executive Officer

LOREAL

Bob MCDONALDChairman, President &

Chief Executive Officer

THE PROCTER &

GAMBLE COMPANY

Brenda C. BARNES

Chairman & Chief

Executive Officer

SARA LEE

CORPORATION

Project Leaders

Warren F. BRYANT

Chairman

NATIONAL

ASSOCIATION OF

CHAIN

DRUG STORES

John RISHTON

Chief Executive OfficerRoyal Ahold

Motoki OZAKI

President Kao

Michael KOK

Group CEODairy Farm

Paul POLMAN

Chief ExecutiveOfficer

UNILEVER


10/22

New Ways of Working TogetherEliminate supply chain disruptions, enable growth

Industry Track (Collaborate)Best Practices/

Standards

Documentation,Education,

Communication

GuidingPrinciples andFrameworks

ShareResults

StrategyAlignment

JAGFramework

Focuson

Consumer

CommonGoals &Measures

InformationSharing*

EPC

Data Sync

ConnectedBusiness

Information

Knowledge,Skills &Capabilities

Incentives &Rewards

organisation

Design

PreparePeople forNew World

Sustainability Cross

IndustryIntegration

IntegratedSupply Chain

Share OurSupplyChain

Trading Partner Track (Competitive Advantage)Strategic IssuesBetween Trading

Partners

Common Goals,Common Measures

Specific Measures& Priorities

Other DataSharing

Opportunities

Consumer/

Shopper

Satisfaction

*Note: Utilizations of Industry Standards


11/22



Standards


Communication


ShareResults


InformationSharing*

EPC

Data Sync

ConnectedBusiness

Information


Incentives &Rewards

organisation

Design



IndustryIntegration




Partners



Other DataSharing

Opportunities

Consumer/

Shopper

Satisfaction StrategyAlignment

JointBusinessPlanning

Focuson

Consumer



12/22

Encourage bi-lateral collaboration

Based on clear, fact-basedunderstanding of market context andtrends

(P&G) Establish True Scorecards basedon trading partners strategies as well asoperational and financial objectives

Embrace joint long-term planning Annual planning is often insufficient

IP protection and trust

Implement longer term planningprocesses

Focuson

Consumer

Five step process building athree-year rolling JAG plan

Annual milestones to be set Program reviewed

throughout the year

Buyer-Seller accountable forfunctional liaison, planningcoordination, agreement and

execution follow-up Cross-functional teams drive

analysis and planning to

support Buyer-Seller

JAG process

Help trade partners buildrationale for their growthstrategy

Demonstrate the objectiveselection of relevant growth

levers

Allow reliable quantificationof the opportunities andexpected ROI

Fact based

Step 5Monitor &

adapt

Step 1

Review the economic andshopper environment

Conditions

for success

Step 2Review

sales and

agree onprioritized

growthlevers

Step 3

Define andagree on

3-yearJAG plan

Step 4

Execute the

JAG plan



throughout the year





JAG process



throughout the year





JAG processJAG process



levers


Fact based



levers


Fact basedFact based

Step 5Monitor &

adapt

Step 1

Review the economic andshopper environment

Conditions

for success

Conditions

for success

Step 2Review

sales and

agree onprioritized

growthlevers

Step 3

Define andagree on

3-yearJAG plan

Step 4

Execute the

JAG plan


13/22



Standards


Communication


ShareResults

StrategyAlignment

JAGFramework

Focuson

Consumer


Incentives &Rewards

organisation

Design



IndustryIntegration




Partners



Other DataSharing

Opportunities

Consumer/

Shopper

Satisfaction CommonGoals &Measures

InformationSharing*

EPC

Data Sync

ConnectedBusiness

Information



14/22

Common Goals and

Common Measures

Based on a common language

GS1 Trading PartnerPerformance Management

Standard

Global Data Synchronization

ConnectedBusinessInformation

N W f W ki T th


15/22



Standards


Communication


ShareResults

StrategyAlignment

JAGFramework

Focuson

Consumer


InformationSharing*

EPC

Data Sync

ConnectedBusiness

Information


IndustryIntegration




Partners



Other DataSharing

Opportunities

Consumer/

Shopper

Satisfaction Knowledge,Skills &Capabilities

Incentives &Rewards

organisation

Design



Five Elements of Change?


16/22

Change

Vision SkillsMeasures /

Rewards ResourcesAction

Plan Change

SkillsMeasures /


Plan

Confusion

VisionMeasures /


PlanAnxiety

Vision Skills ResourcesAction

PlanGradual

Change

Vision Skills Measures /Rewards ActionPlan Frustration

Vision SkillsMeasures /

Rewards ResourcesFalse

Starts

Five Elements of Change?



17/22

Understand the Barriers andEnablers to long term, shopper

focused business planning

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


18/22



Standards


Communication


ShareResults

StrategyAlignment

JAGFramework

Focuson

Consumer


InformationSharing*

EPC

Data Sync

ConnectedBusiness

Information


Incentives &Rewards

organisation

Design



Partners



Other DataSharing

Opportunities

Consumer/

Shopper

Satisfaction Sustainability Cross

IndustryIntegration





19/22

Industry and tradingpartners must do things

differently

Adopt more sustainable

business practices

Collaborative TransportManagement, Empty Miles


Focus on the Consumerwill not work if goals and measures are noth d if ti d d t t t i l


20/22

shared, or if supporting rewards and structures are not in place

Connect our Business will not work if the connection point is not theshopper 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 thecommon goals, common measures and information visibility to act on.

Share our Supply Chain will not be possible without understanding howevery decision impacts the shopper, or if the way we measure success isdifferent. Too often we optimize components of the supply chain, but sub-optimize the whole Strategy

Alignment

JAG Framework

Focuson Consumer

Common Goals &Measures

InformationSharing*

EPC

Data Sync

ConnectedBusiness

Information

Knowledge, Skills &Capabilities

Incentives &Rewards

organisationDesign

Prepare People forNew World

Sustainability Cross Industry

Integration

Integrated SupplyChain

Share Our SupplyChain

An Integrated Approach to

Better Business Results


21/22

New Ways of Working Together will require:

Leaders who inspire by example Honesty, Integrity and Credibility

Transformation of Business information Visible

Connected

Accurate

Informative Actionable

Relevant

So, whatdo we do

about it?


22/22

The NWWT Opportunity Take responsibility for the current state

Expand your view to include all stakeholders

Collaborate effectively across the supply chain inthe 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-compatibleprocesses.

So, whatdo we do

about it?

mr patrick g. gonklin

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