uk s&op + process kirstie edwards november 2011. uk s&op+ 5 levels of s&op maturity –...

UK S&OP + Process

Kirstie EdwardsNovember 2011

UK S&OP+

5 Levels of S&OP Maturity– Level Definitions– UK Timelines

Level 5 – Mature S&OP+

Level 4 – S&OP+

Level 3 – Capable S&OP

Level 2 – Foundation S&OP

Level 1 – Disconnected Management Processes

5 S&OP+ Process Steps– Process definition & Period cycle– Step by Step

Purpose & UK Inputs & Outputs Benefits of S&OP+

– Why transition from S&OP– Impact of Forecast Accuracy


S&OP+ Maturity Levels

Definition: LEVEL 1•Management meetings are traditional in construction, with primary focus firmly on the past to analyse what has already happened. •-There is an annual budgeting process with little focus on forward projections and strategy, but deliver a detailed short term view by line. •-Functions tend to work in silos with few aligned objectives and measures across divisions.•-Functional behaviours are defensive, rather than collaborative

LEVEL 1

February 2010

UK

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Day 1. S&OP processes do not exist




Definition: LEVEL 2•-Process elements are defined with correct accountability across divisions and KPIs•-Correct S&OP structure is in place, with reporting relationships and objectives set.•-Focus is Demand / Supply tactical balancing•-Divisional behaviours are challenged, but not yet performing as aligned team•-Integrated Supply Chain KPIs are initiated

LEVEL 2

February 2010 Day 1. S&OP processes do not exist

May 2010 Eg. Demand forecasting volumes with poor accuracy U

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Definition: LEVEL 3•-The periodic cycle and processes are established and driving integrated Operational and Financial Planning•-A suite of KPIs covering Customer centricity; Supply chain management; Demand Forecasting and -Financial performance is used as a leading indicator, and showing operational effectiveness of 95%+ capability•-Issues are identified and this is the decision making process•-Annual budgeting is removed and S&OP numbers drive forward planning•-High Performing Team behaviours are demonstrated throughout the process

LEVEL 3


May 2010 Eg. Demand forecasting volumes with poor accuracy

July 2010 IBP model built. NSV Pd forecasts & 2011 plan. Supply aligned to Demand

UK

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Level 4 – S&OP+





Definition: LEVEL 4•-Rolling business management forecasting process including Gap analysis vs. strategy and focus on competitive priorities•-Integrated reconciliation is established and providing underlying understanding of business to drive improvement priorities and gap closing actions•-Used to deploy and drive value proposition•-Aligned to Program Summit to be catalyst for markets success in achieving financial shaping targets

LEVEL 4




UK

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January 2011 Portfolio reviews & Financial reconciliation embedded into UK S&OP.

Level 5 – Mature S&OP+

Level 4 – S&OP+





Definition: LEVEL 5•-Continuous reconciliation, managing gaps and alternative scenario planning•-Drives responsive optimisation of the business in pursuit of strategy

LEVEL 5




May 2011 ‘Gaps’ managed & driving activities aligned to strategies. S&OP+ Part of UK culture

UK

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January 2011 Portfolio reviews & Financial reconciliation embedded into UK S&OP.

S&OP+ Input & Output

Policies Financial ShapeStrategy

Demand Forecast Capacity

Sales & Operations

Planning

Sales Plan Operations PlanFinancial Forecast

Sales periodicallyChannel / Product

Demand managementNPD, promotions, specials

Customer Service Levels

Production periodically& Supplier planning

Labour plansIncluding irregular hours & OT

Inventory level management

Year End Estimate & Plan

GAP analysis

Program Summit – Financial Shaping

The Inputs and Outputs are delivered through 5 Steps in a Periodic Process

The 5 Steps of S&OP+

What are they ?The 5 S&OP+ process steps is completed in the UK each period (Steps 1to3 foundation S&OP and Steps 4to5 mature S&OP+). The process is governed by the S&OP manager, and steps occur at set times during the period cycle. The following section provides further detail of these process steps as currently delivered in the UK, laid out in a 4 week period cycle.

Steps 1,2,3 = Foundation S&OPSteps 4,5 = Mature S&OP+

WEEK 1

Day 2:

•Period actuals volume preparation: UK; Fr; De

•Value preparation in IBP model: UK Only

Day 4:

•STEP 1) Demand Reviews with UK; France and Germany

Day 5:

•STEP 2) Supply Review EU consolidated volumes

•STEP 5) UK Financial Integration

WEEK 2

Day 6:

•Publication UKLT S&OP slide deck (

•see appendix 3

Day 7:

•STEP 3) UKLT Management Review

SKU forecasting for production planning. Market sign off with Local activities include d(promo/launch/de-list)

WEEK 3

Local Activity Reviews. Project reviews with Klix management team; SS management team; Supply Leadership team

Global Portfolio Reviews. Global Activity Managers output publication of Global Dashboard

STEP 4) Portfolio Reviews S&OP reconciliation Global/Local and forecast assumptions in IBP model. (UK only)

WEEK 4Publication of UK Project Dashboard to UKLT. (See example)


PurposeManage performance of Markets/Brands/Channels/Accounts (value and volume). Develop long term unconstrained demand plan based on Marketing and Sales assumptions. Review deep dives on specific topics.Outputs from the Demand review include:Agreed long term unconstrained demand planProvide clarity around Sales Performance; Review & forecast Sales TrendsAgreed resources to fulfil demand plan Risks & opportunities, identified gaps, defined action plansEscalations/replies to other reviews Measure forecast accuracy & leverage for improved Sales Performance.

STEP 1 – DEMAND REVIEWS

P9 & 10 Kafevend Volume phasing onlyC400 YTD actual sales 4075C400 YTD forecast accuracy avg (3 pd fixed measure) = 99%C400 YTD impact on inventory = 43 brewersCurrent inventory levels = 600 brewers (6 wks stock)

Samples: KPIs and Performance results. Gap Analysis and Forecast Assumptions

•We analyse S&OP forecast accuracy, performance and assumptions of volumes and NSV by channel, holding Channel managers accountable for the delivery of forecast and Business Plans.•For Single Serve we measure forecast accuracy of volume and value by Partner•Impact of variances to forecast on the rest of the business is clear and ownership taken in Demand.•We review the latest assumptions driving the forecast for this year and next year•We compare the current YEE to official Plan•We compare the current YEE to the rolling forecast for next year. As part of Program Summit, in 2012 the S&OP forecast YEE will be measured vs LY and Next Yr. (see example slide 14)•Gaps are indentified and actioned

The 5 Steps of S&OP+ STEP 1 – DEMAND REVIEWS Examples

Klix NSV actuals, vs Plan and latest S&OP forecast. Review phasing and identify ‘gaps’

2010 Actuals

2011 Replan 2011 YEE

2012Forecast

2010 vs 2011 YEE

2011 YEE vs 2012 Fcast

TOTAL LOCAL ASP (pence) 16.38 17.25 16.29 18.30 -0.5% 12.3%

T'PUT (dpw) 80 80 90 91 12.9% 1.9%

TOTAL NATIONAL ASP (pence) 13.97 14.01 12.80 13.68 -8.4% 6.9%

T'PUT (dpw) 114 103 81 78 -28.4% -3.6%

INDIRECT ASP (pence) 13.13 13.54 13.33 14.63 1.6% 9.7%

T'PUT (dpw) 105 96 92 102 -12.7% 11.3%

TOTAL MARKET SS ASP (pence) 14.24 14.32 13.91 14.93 -2.3% 7.3%

Drink vol 111.96 113.38 107.07 112.85 -4.4% 5.4%

MC Base 19,442 23,331 21,800 21,081 12.1% -3.3%

T'PUT (dpw) 111 93 94 103 -14.7% 9.0%

ASP & T'PUT Analysis

Sing

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Review projected ASPs and Drinks Per Week for Year end vs last yr (growth/decline)Reviewed projected assumptions for next years ASPs and DPW vs latest YEE (growth/decline)

By channel understand assumptions behind volumes and measure performance for overall business impact. Eg New Business machine placements vs Repeat account placements.

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FY 2011 Plan 2011 YEE Variance

Local Repeat 621 832 211

0National Repeat 260 295 35Indirect Repeat 0 0

Indirect New Biz 300 188

2831 2782 -50Repeat Total 881 1127 246

-112New Biz Total 1950 1507 -444

Local New Biz 1250 859 -392National New Biz 400

Monitor CSV volumes for CAB input

KM Vols 2011 Plan2011

S&OP Variance 2012 YoYCash Lease 796 785 12- 637 148- CSV 2,035 1,997 38- 1,981 16- Total 2,831 2,782 50- 2,618 163-

2011 11/11

Total

1,490,099-

Full Year Plan Latest YEE

LTT 5,210,266 5,943,433 733,167

Autobar 9,593,596 8,502,753

Wholesalers 22,485,695 20,607,292 1,878,403- UK Vending 8,192,960 5,802,496 2,390,464- Ratio Brand 3,673,956 3,426,924 247,032-

Kent & Sussex 4,529,793 4,483,476 46,318-

-22.7%National 6,559,859 5,069,760

-8.4%-5.6%

-11.4%

Variance-2.5%

Volumes - DRINKS (YEE Variance to Plan)

22,283,877 573,075- Variance

Local 22,856,952

1,090,843- Kafevend 30,280,208 30,877,866 597,658 2.0%

-1.0%14.1%-6.7%

-29.2%

113,383,284 106,997,877 6,385,407-

Review Single Serve Partners performance vs S&OP forecast: Period; YTD and Full Year S&OP YEE•Drinks Volumes•Machine Volumes•NSV


PurposeDevelop an achievable Supply Plan as a formal response to unconstrained demand plan from DMR. Manage supply chain performance, capability, flexibility, resources, supply financials & alternative supply scenarios. Review deep dives on specific topics.Outputs from Supply review include:Agreed supply planAgreed resources to fulfil supply plan Recommended supply alternatives to meet demand planRecommendations/decisions on CAB spendRisks & opportunities, identified gaps, defined action plansEscalations/replies to other reviews

STEP 2 – SUPPLY REVIEWS

•Expecting Period 13 FG inventory to close on target at 125 machines•2012 inventory forecast currently reflecting flat build rate of 101 machines per week•Without factory line changes, inventory will peak in summer, and rely on Period 13 factory close to meet year end target.•No recommended changes to target inventory for 2012

Samples: KPIs and Performance results. Planning capacity; production; resource; purchasing; inventory

•We review the latest Demand forecasts and account impacts with Supply leadership teams. •We analyse projected inventory levels vs target using latest Demand forecasts and build rates.• We agree production build rates to manage factory efficiency, minimising the number of line rate changes whilst balancing the needs of S&F.•We align forecast demands to capacity planning eg S&OP was enabler for shift operation change from 4 to 3 in January 2011, saving $0.5m pa•We review the Demand forecast accuracy levels by SKU to manage raws purchasing and Commercial prime cost impacts.

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PurposeManage current portfolio - portfolio health/lifecycle management at SKU/brand/category level in line with business strategy & agreed targets. Manage future portfolio (innovation funnel)in line with business strategy/OGSM (with 3 year rolling horizon, balanced to resources, prioritized, delivered on time and in full via robust stage gate process and efficient project management)Output from Portfolio Reviews include:Decisions/recommendations on current portfolio rationalisation Decisions/recommendations on future portfolio/innovation funnelActivities prioritisation, Stagegate decisionsRisks & opportunities, identified gaps, defined action plans Escalations/replies to other reviewsActivity benefits (volume & value) for integration to S&OP forecasting

STEP 3 – ACTIVITY REVIEWS

Samples: Activity and Portfolio projects impacting UK earnings – Consolidated reporting for UKLT

•S&OP manager in alignment with Global Activity Managers & Local management teams (Demand & Supply) gathers all relevant data on projects will impact UK volumes and/or earning.•Eg New Launches, Promos, De-listing, change in customer trends, Pricing•Includes latest status; anticipated delivery dates and projected benefits of volume and NSV. •We also gather insights on forthcoming projects not yet resourced.•Outputs are reviewed by the UKLT to manage and prioritise resources•Project benefits are aligned with Global S&F & built into the S&OP forecasting model.•Volumes impacts are shared from S&OP with Supply for production, down to SKU level

•There are currently 45 projects impacting UK earnings and volumes in 2011•11 have been completed and 5 stopped.•A further 29 projects are active, of which 3 are at High Risk of not delivering the reported benefits


UK Leadership Team Periodic Activity Review – Executive Summary

STEP 3 – ACTIVITY REVIEWS Examples

1 HIGH RISK projects for Review at the next UKLT S&OP meeting are :Project Name Who DescriptionOptimised Merchandiser HA A more flexible, cheaper and easier to use SS merchandiser (Development)Klix 2011 Pricing DF National Direct price change to 7.9%CAM stretch targets DF Stretch target Klix Machine Repeats over plan

2 Recommended Discussion Topics for next UKLT S&OP review

General All How to use section 4 for group discussions & decisions on prioritisation of projects

NEW GLOBAL KLIX projects David F NEW 4 x XL Klix projectsand 1 x Outlook facelift project

NEW GLOBAL SS project Hoss C200 UK LaunchYEE Gap Closing Activities Hoss Single Serve £50k projectYEE Gap Closing Activities David F Klix £255k project + remaining £90k Gap ** 3rd Largest benefit in charts

3 Project Updates from last period publication:Project Name Project Owner Update Description

CAM stretch targets Sophie Dickinson

Klix 2011 Pricing - National Will DavisSS Partner brewers YTG Paul Arnold

Klix YTG Machine CL sales Simon Knapp

Klix YTG Machine CSV sales Will Davis

Status Update: At Risk. Machines sales YTG reduced by 50% for P10 to P13.

Status Update: At Risk. Actual ASPs not meeting plan

NEW: Activities to close £50k Pd on Pd GapNEW: One off reduced price initiative to replace obsolete machines x 165NEW: Replace obsolete machines x 50

4 Current BenefitsCommitted benefits to UK in 2011 £2.091 mio

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Closely Monitor High Risk On Track Complete

•Published periodically from S&OP to the UKLT•Covers all projects and activities Global and/or Local•Summarises any changes to status or benefits since last publication•Clearly shows all projects and highlights which ones are currently not included in S&OP forecast (eg in early feasibility phase) and therefore potential market upside to latest forecast

•P11 includes leadership team review of the Gap Closing activities driven from the P10 S&OP review (section 2)


PurposePrepare the Leadership Business Review agenda. Financialise the process outputs. Integrate and reconcile outputs, define gaps, prepare options/scenarios to close gaps, recommend decisions to the LBR. Output from the Financial Reconciliation include:Business Summary - Balanced Score Card, decisions made, escalations & decisions required, risks & opportunities, Additional supporting material Options/scenarios and recommended decisions to close gaps

STEP 4 – FINANCIAL RECONCILIATION

•Since last period the YEE has declined by £420k (Klix -£380, SS -£60)

Samples: Fully Integrated Planning enables translation of S&OP volumes in NSV and tracking of forecasts

•The Financial reconciliation is driven through the Integrated Planning model developed currently in the UK.•There is no separate activity to translate volumes into NSV, as this is built into the forecasting model. This enables the demand channel managers to be empowered for the complete ownership of their channel beyond volume•They take accountability for their channel P&L and understand the financial impact their decisions and performance makes.•The financial reconciliation is the preparation of UKLT S&OP review slide-deck. This includes tracking the key drivers of YEE movements by Brand/Channel/Partner


UK KLIX VOLUME & NSV FORECASTING Plan & actuals include Unbranded COPA entries for BV ancillaries

2011-11 YTD Plan YTG Plan FY Plan YTD

Actuals YTG

Forecast YEE Variance to CY Plan

Variance to CY Plan

FY Forecast

Variance to CY YEE

Variance to CY YEE

Machine Additions (Incl Repeats) 1,529 342 1,871 1,426 370 1,796 -75 -4.0% 2,349 553 30.8%Machine Losses (Incl Repeat Uplifts) 1,435 275 1,710 2,513 404 2,917 -1,208 -70.6% 2,133 784 26.9%Base Movement 94 67 161 -1,087 -34 -1,121 -1,283 -795.7% 216 1,337 -119.3%

Machines NSV 1.1 0.2 1.4 1.0 0.3 1.4 0.0 -0.4% 1.5 0.2 11.1%

Drinks Volumes 134.6 25.1 159.7 131.9 24.2 156.1 -3.6 -2.3% 152.0 -4.1 -2.6%Avg Drinks ASP 13.4 13.8 13.5 13.9 14.3 13.9 0.4 3.3% 14.7 0.7 5.3%Drinks NSV 18.1 3.5 21.5 18.3 3.4 21.7 0.2 0.9% 22.3 0.6 2.5%

Additional NSV 0.8 0.2 1.0 0.8 0.1 1.0 -0.01 -1.3% 0.9 -0.04 -4.3%Total 3rd PARTY NSV 20.01 3.87 23.88 20.16 3.91 24.07 0.19 0.8% 24.73 0.66 2.7%

Machine Additions (Incl Repeats) 590 70 660 730 89 819 159 24.1% 495 -324 -39.6%Machine Losses (Incl Repeat Uplifts) 1,080 71 1,151 669 140 809 342 29.7% 580 229 28.3%Base Movement -490 -1 -491 61 -51 10 501 -102.1% -85 -95 -932.2%

Machines NSV 0.0 0.0 0.0 0.0 0.0 0.0 0.0 #DIV/0! 0.0 0.0 -100.0%

Drinks Volumes 77.0 12.3 89.4 79.3 13.7 93.0 3.6 4.1% 89.7 -3.3 -3.5%Avg Drinks ASP 11.7 12.0 11.7 11.6 12.1 11.7 -0.1 -0.7% 12.3 0.6 5.1%Drinks NSV 9.0 1.5 10.5 9.2 1.7 10.8 0.4 3.3% 11.0 0.2 1.4%

Additional NSV 0.7 0.1 0.8 0.5 0.1 0.6 -0.19 -25.2% 0.3 -0.26 -45.4%Total 3rd PARTY NSV 9.69 1.56 11.25 9.71 1.72 11.43 0.18 1.6% 11.30 -0.13 -1.1%

Machine Additions (Incl Repeats) 260 40 300 173 15 188 -112 -37.3% 125 -63 -33.5%Machine Losses (Incl Repeat Uplifts) 289 52 341 177 52 229 111 32.7% 328 -99 -43.2%Base Movement -29 -12 -41 -4 -37 -41 -1 1.3% -203 -162 390.7%

Machines NSV 0.4 0.1 0.5 0.3 0.0 0.3 -0.1 -29.5% 0.2 -0.1 -40.9%

Drinks Volumes 44.2 8.8 53.1 44.9 7.5 52.3 -0.7 -1.3% 49.6 -2.8 -5.3%Avg Drinks ASP 10.9 11.1 11.0 10.4 10.7 10.5 -0.5 -4.6% 11.1 0.7 6.5%Drinks NSV 4.8 1.0 5.8 4.7 0.8 5.5 -0.3 -5.9% 5.5 0.1 0.9%

Additional NSV 0.4 0.1 0.5 0.6 0.1 0.7 0.17 34.6% 0.5 -0.15 -23.7%Total 3rd PARTY NSV 5.63 1.11 6.75 5.55 0.89 6.44 -0.31 -4.5% 6.21 -0.23 -3.6%

Machine Additions (Incl Repeats) 2,379 452 2,831 2,329 474 2,803 -28 -1.0% 2,969 166 5.9%Machine Losses (Incl Repeat Uplifts) 2,803 398 3,202 3,359 597 3,956 -754 -23.5% 3,041 914 23.1%Base Movement -424 54 -371 -1,030 -123 -1,153 -782 210.9% -72 1,080 -93.7%

Machines NSV 1.5 0.3 1.8 1.3 0.4 1.7 -0.1 -6.3% 1.7 0.0 -0.1%

Drinks Volumes 255.8 46.3 302.1 256.0 45.4 301.4 -0.7 -0.2% 291.3 -10.1 -3.4%Avg Drinks ASP 12.5 12.8 12.5 12.6 13.0 12.6 0.1 0.8% 13.3 0.7 5.5%Drinks NSV 31.9 5.9 37.8 32.1 5.9 38.0 0.2 0.6% 38.8 0.8 2.0%

Additional NSV 1.9 0.3 2.2 1.9 0.3 2.2 -0.04 -1.6% 1.7 -0.5 -20.7%

Total 3rd PARTY NSV 35.33 6.54 41.88 35.42 6.52 41.94 0.06 0.2% 42.24 0.30 0.7%

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NEXT YEAR FORECAST2012

CURRENT YEAR ACTUALS & YEE2011

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STEP 4 – FINANCIAL RECONCILIATION

•By channel we measure the NSV variances of S&OP YEE vs Plan.•We can easily review where the causes of these variances are , and where to focus any Gap closing activities:Machine placementsBase Losses (Churn or Account losses such as Sainsburys)Machines ASPDrinks Volumes (DPW if not in machines base)Drinks ASPRevenue through ancillaries or other Services

•Each period the latest YEE is measured against the rolling forecast for next year, by channel.•This replaces Plan and supports Program Summit

•These summary tables are generated in the IBP model for Klix and SS


PurposeReview strategy deployment progress (incl. financial shape). Support or challenge key recommendations. Review & calibrate business delivery targets. Push decisions and actions back to the process management forums. Review deep dives on specific topics.Outputs from Leadership Team review include:Summary pack to all process management forums, and the whole organizationKey decisions on gaps & opportunitiesDemand / supply trade-offs, new product master plan / resource trade-offs, business unit demand sign-off, financial framework actions,

STEP 5 – LEADERSHIP TEAM REVIEW

KPIs and Performance results across business. Forecast Assumptions. Risks & Opportunities. Gap Analysis

•An S&OP period review takes place with the UKLT on Tuesday week 2. •S&OP publishes a 30+ slide-deck detailing the current performance; risks and opportunities and projected performance for the whole business•Clear actions are assigned to UKLT members and measured on closure of actions.•The slide-deck includes HOT TOPICS: being the burning issues as decided by the S&OP manager•HOT TOPICS only are presented by the S&OP to the UKLT•The supporting slide-deck (not presented) provides further analysis to support the HOT TOPICS. Each category has Customer centric KPI dashboards.


“2011 NSV YEE vs 2010 showing 4.7% YoY decline. Was -4.1% last period”

“Klix drinks volumes 29mio cups less than 2010. Sainsburys stores a 22mio cup account lost end Q1, accounts for 16mio. A further 13mio cups down”

STEP 5 – LEADERSHIP TEAM REVIEW

UK Total VOLUME & NSV FORECASTING

GBP 2010 2011 YEE Variance Growth 2010 2011 YEE Variance Growth 2010 2011 YEE Variance Growth

Machine Additions (Incl Repeats) 1,374 1,796 422 30.7% 481 381 -100 -20.8% 1,855 2,177 322 17.4%Machine Losses (Incl Repeat Uplifts) 2,160 2,917 -758 -35.1% 1,712 903 809 47.3% 3,871 3,820 51 1.3%Machines NSV 1.2 1.4 0.2 13.4% 0.4 0.4 -0.1 -12.3% 1.6 1.7 0.1 6.8%

Drinks Volumes 167.9 156.1 -11.9 -7.1% 36.3 22.3 -14.0 -38.6% 204.2 178.4 -25.9 -12.7%Drinks NSV 21.8 21.7 0.0 -0.1% 5.9 3.6 -2.3 -39.0% 27.7 25.4 -2.3 -8.5%

Additional NSV 0.9 1.0 0.03 3.3% 1.9 1.3 -0.64 -32.7% 2.9 2.3 -0.61 -21.0%Total 3rd PARTY NSV 23.90 24.07 0.17 0.7% 8.31 5.30 -3.01 -36.2% 32.21 29.37 -2.84 -8.8%

Machine Additions (Incl Repeats) 479 819 340 71.0% 138 117 -21 -15.2% 617 936 319 51.7%Machine Losses (Incl Repeat Uplifts) 810 809 1 0.2% 285 224 61 21.3% 1,095 1,033 62 5.7%Machines NSV 0.1 0.0 -0.1 -74.6% 0.0 0.1 0.0 94.2% 0.1 0.1 0.0 -36.8%

Drinks Volumes 105.0 93.0 -12.0 -11.4% 7.8 5.1 -2.8 -35.3% 112.8 98.1 -14.8 -13.1%Drinks NSV 12.1 10.8 -1.3 -10.7% 1.1 0.6 -0.4 -40.7% 13.2 11.5 -1.7 -13.2%

Additional NSV 0.7 0.6 -0.16 -22.0% 0.6 0.5 -0.11 -19.2% 1.3 1.0 -0.27 -20.8%Total 3rd PARTY NSV 12.96 11.43 -1.53 -11.8% 1.70 1.18 -0.53 -30.9% 14.66 12.61 -2.05 -14.0%

Machine Additions (Incl Repeats) 336 188 -148 -44.0% 3,224 4,276 1,052 32.6% 3,560 4,464 904 25.4%Machine Losses (Incl Repeat Uplifts) 887 229 658 74.1% 1,349 2,494 -1,145 -84.9% 2,236 2,724 -487 -21.8%Machines NSV 0.4 0.3 -0.1 -16.3% 1.5 2.2 0.6 43.0% 1.9 2.5 0.6 31.1%

Drinks Volumes 57.5 52.3 -5.2 -9.0% 67.8 79.7 11.9 17.5% 125.4 132.0 6.7 5.3%Drinks NSV 6.1 5.5 -0.6 -10.2% 8.9 10.6 1.7 19.4% 15.0 16.1 1.1 7.4%

Additional NSV 0.6 0.7 0.03 5.0% 3.0 2.9 -0.01 -0.5% 3.6 3.6 0.02 0.5%Total 3rd PARTY NSV 7.09 6.44 -0.65 -9.2% 13.37 15.73 2.36 17.6% 20.47 22.18 1.71 8.3%

Machine Additions (Incl Repeats) 2,189 2,803 614 28.0% 3,843 4,774 931 24.2% 6,032 7,577 1,545 25.6%Machine Losses (Incl Repeat Uplifts) 3,857 3,956 -99 -2.6% 3,345 3,621 -276 -8.2% 7,203 7,577 -374 -5.2%Machines NSV 1.7 1.7 0.0 1.9% 1.9 2.6 0.6 32.1% 3.6 4.3 0.7 18.1%

Drinks Volumes 330.5 301.4 -29.1 -8.8% 112.0 107.1 -4.9 -4.4% 442.4 408.5 -34.0 -7.7%Drinks NSV 40.0 38.0 -1.9 -4.9% 15.9 14.9 -1.0 -6.5% 55.9 53.0 -3.0 -5.3%

Additional NSV 2.3 2.2 -0.10 -4.3% 5.5 4.7 -0.76 -13.9% 7.8 6.9 -0.86 -11.1%

Total 3rd PARTY NSV 43.95 41.94 -2.01 -4.6% 23.39 22.21 -1.17 -5.0% 67.34 64.15 -3.19 -4.73%

GROWTH - 2011 YEE vs 2010 ACTUALS TOTAL KLIX SINGLE SERVE

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UK

Summary Table NSV £ms

2011 KLIX SINGLE SERVE Total UK

2010 43.95 23.39 67.342011 YEE 41.94 22.21 64.15Var £s -2.01 -1.17 -3.19Var %s -4.6% -5.0% -4.7%

Summary Table Drinks Vols


2010 330.47 111.96 442.432011 YEE 301.41 107.06 408.46Var Vols -29.06 -4.91 -33.97Var %s -8.8% -4.4% -7.7%

Summary Table Machine Vols


2010 2,189 3,843 6,0322011 YEE 2,803 4,774 7,577Var Vols 614 931 1,545Var %s 28.0% 24.2% 25.6%

2011 YEE vs 2010 Actuals (growth)

Cash Earnings YEE 10%

Monitor Payplan

YEE NSV growth / Cash Earnings Matrix

Summary Table NSV £ms

Next Year KLIX SINGLE SERVE Total UK

2011 YEE 41.94 22.21 64.152012 Forecast 42.24 23.56 65.80Var £s 0.30 1.35 1.64Var %s 0.7% 6.1% 2.6%

Summary Table Drinks Vols


2011 YEE 301.41 107.06 408.462012 Forecast 291.27 112.46 403.73Var Vols -10.14 5.41 -4.74Var %s -3.4% 5.0% -1.2%

Summary Table Machine Vols


2011 YEE 2,803 4,774 7,5772012 Forecast 2,969 7,473 10,442Var Vols 166 2,699 2,865Var %s 5.9% 56.5% 37.8%

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Latest S&OP forecast showing UK 2.6% NSV growth in 2012Drinks volumes YoY significantly different Klix decline 10mio cups vs SS growth 5.4mio packs. Machines volumes for Klix is showing growth + 166 machines, whilst SS machines growth of 57% includes C200 launch.

Actions assigned to UKLT to deliver strategyUK stakeholders push back actions to their S&OP+ process review meetings. Actions aligned to market strategy and deliverables.

Examples of Benefits of S&OP+

“Demand planning is the business’s starting point for the planning and use of company

resources in the pursuit of profitability”

Susan L. Storch. Oliver Wight Americas. 2010

WHY TRANSITION FROMS&OP to S&OP+ ?

Greater financial integration

Inclusion of strategic initiatives and activities

Clear translation between detail forecasting and top-level planning

Improved decision-making

Improved trust within the management team

Increased accountability and business management

Improved scenario financial modelling & risk analysis

Companies with World Class

mature S&OP+ have 10% of the

stock outs of companies

without S&OP

Increasing Forecast

Accuracy by just 3% will

Increase Profit Margin by 2%

1% improvement in Forecast

Accuracy can deliver a 2%

improvement in Perfect Order

Fulfilment

Purchasing Costs

Productivity Inventory Perfect Order fulfillment

0%5%

10%15%20%25%30%35%

Average World Class

Impr

ovem

ent %

uk s&op + process kirstie edwards november 2011. uk s&op+ 5 levels of s&op maturity –...

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