COMMITMENT, CULTURE, COMMUNICATION AND · PDF fileMove to Base + Lift Forecasting Process (Demantra Config) l Implement Demand Planning Firm Period Change Process l OUR PATH FORWARD

COMMITMENT, CULTURE, COMMUNICATION AND TRUST: PREREQUISITES TO EFFECTIVE DEMAND & INVENTORY PLANNING

1 CONFIDENTIAL: FOR PRESENTATION PURPOSES ONLY

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POWERFUL BRANDS COMBINE FORCES


OUR PORTFOLIO HAS AMERICA’S TOP 10 COFFEE BRANDS

3 CONFIDENTIAL:FOR PRESENTATION PURPOSES ONLY

UNMATCHED BRAND VARIETY & CHOICE… UNLIKE ANY OTHER SYSTEM IN THE WORLD


Walmart Excl.

WINNING PRODUCT PLAN

CONFIDENTIAL:FOR PRESENTATION PURPOSES ONLY

REVENUE GROWTH


7 CONFIDENTIAL: FOR INTERNAL USE ONLY

70 500~ ~

*

CONFIDENTIAL:FOR PRESENTATION PURPOSES ONLY

GROWTH PRESENTS CHALLENGES


BUSINESS LANDSCAPE Demand Shifting Across Brands & Channels


MERGER OF TWO DISTINCT CULTURES


CALL TO ACTION 2015


Size of the Prize:

• $20M Revenue

• $40M Obsolescence

• $100M Cash Flow

• Executive Leadership Team Commitment • Mandate - Become More Predictable and

Accurate in Demand Planning

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

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


14

“Commitment is what transforms promise into reality.”

- Abraham Lincoln


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


WHY FORECASTING MATTERS


The forecast is authorization to spend the

company’s money

Source: DuPont Financial Performance Model

Educating the Masses

17

Every management mistake ends

up in inventory. – Michael Bergerac, Chairman of Revlon 1975-1985


GARTNER HIERARCHY OF METRICS

Source: Gartner The Hierarchy of Supply Chain Metrics: Diagnosing Your Supply Chain Health G00278903


http://www.gartner.com/document/code/278903?ref=ggrec&refval=3343217

http://www.gartner.com/document/code/278903?ref=ggrec&refval=3343217

19

Culture is the way you think, act and interact…


Consensus Forecast

- Supports financial plan

- Operational Forecast

- Procurement Forecast

- Unbiased Forecast

CONSENSUS FORECAST DEFINED Demand Planning “Voice of Reason”

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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


Grocery Mass Retail Club

A NEW WAY OF WORKING WITHIN COMMERCIAL TEAM

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Coffee

Hot Tea

Dairy Based

Partners

Product Based

Forecasting

Field Sales Team Input

Channel Leaders P

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NPD / EOL


• 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


• 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


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

WHAT GOT US HERE WON’T GET US THERE Current Improvement Activities


• Streamlined organization • Trade inventory analysis • Developing FVA vs. Stat or naïve metrics • Forecastability analysis

Grocery Partner Retail Club

STREAMLINED ORGANIZATION – E2E SCM

26

Field Sales Team Input

SC Pillar Leaders


EComm/ Amazon Demand

Planning

Supply Planning

Key Account Leads

Customer Care

Logistics

New Product Management

Commercial Team

27 Data Sources: Shipments: EBU Cube, POS: System Wide POS OH Inventory: Cumulative Shipments - POS


• Predictive analytics • Inventory optimization • Demand sensing • Machine learning • Industry 4.0/ IOT

REMAINING OPPORTUNITIES


Q&A

29

Documents

COMMITMENT, CULTURE, COMMUNICATION AND · PDF fileMove to Base + Lift Forecasting Process (Demantra Config) l Implement Demand Planning Firm Period Change Process l OUR PATH FORWARD