EMEA S&OP USING SCOR MODEL

Presented by

Sarah Bourdeloux, CSCP, EMEA CI & HPO Manager

&

Fabien Roumeaux, EMEA Supply Chain Planning Director

Our passion for flavor

2

Agenda

1. Introduction to the Company

2. EMEA S&OP Journey

3. Methodology

• Assessment

• To be process

• Policy

• Organizational changes

4. Benefits and Challenges

5. The Journey continues

6. Q&A

4

1.Our History

• Founded in 1889 in Baltimore, Maryland

by Willoughby McCormick

• First McCormick product - Root Beer extract

• Acquired F.G. Emmett Spice Company

of Philadelphia in 1896

Motto: “Make the Best – Someone Will Buy It”

1.Global Leader in Flavor & Global Sourcing

5

1980

1990

2000

Unique Sauces 2006

2010

2011

2003

2004

2007

1.Global Leader in Flavor

• Headquartered in Sparks/ Baltimore, Maryland

• 12,000 employees worldwide

• $4.2 billion in sales

• Facilities in 24 countries with brands

reaching more than 125 countries & territories

• Our Mission: “To save the World From Boring Food”

6

38% 62%

2. The journey in McCormick

• Started in North America in 2002,

• Was a consequence of the evolution of the supply chain

executive roles in plan, source, make, deliver, and enable,

• Initial supply chain excellence projects focused on S&OP to

improve metrics negatively impacted by the implementation of

APO (rolled out across the company starting in 2002 ending

with EMEA in 2013),

• 29 SCOR projects from 2006 to 2013 implemented since then,

• Managed as an opportunity to establish an end to end process

• Aligned with McCormick OGSMs and Continuous Improvement

programs

2. Strategically applying the SCOR Implementation Roadmap

through the company at the Global Supply Chain level

2. One year and half journey in EMEA

• Was an opportunity to describe the S&OP process using SCOR, creating meeting guidelines, policies and re energizing current process and integrating new business units,

• Focused on building organizational capability,

• Identified the right sponsor, project leader, cross-functional project and extended teams to ensure full commitment to delivery,

• Helped by Supply Chain Finance to quantify, sign-off, and track portfolio,

• Included individual OGSMs tied to metrics and portfolio to all cross functional participants

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0Demand Planning

Supply Planning

Unit and FinancialReconciliation

Leadership Review andAlignment

SOP Maturity Score as of Feb 2013

Lack of alignment

between countries and

functions for existing

meetings

Lack of ownership and

policies for those 2 activities

Lack of reporting

3. Initial stage and SCORMark assessment

Week

1

P1.1.1

Complete month end close and validate data

FINANCE

P1.1.2

Analyze forecast and BIAS performance

DEMAND PLANNING

P1.1.10EMEA Consumer Reconciliation

P1.1.3

Generate and validate statistical forecast

DEMAND PLANNING

P1.1.6

Consolidate EMEA demand view

SYSTEMATICDEMAND PLANNING

P1.1.7

Update launch and replenishment NPD plans and forecasts

MARKETINGSALES

Week

4W

eek

3W

eek

2

P1.1.8

Update promotional event calendar

MARKETINGSALES

Supply Review

P1.1.9

Update account plans based on collaboration activities (from P4.1)

SALES

P1.1.5

Identify demand shaping opportunities

SUPPLY PLANNING

P1.2.11EMEA Board of Directors Update

P1.1.4

Generate, validate, and conduct country demand review

DEMAND PLANNING

P1.1.13

Conduct Pre-Demand Detailed Review

DEMAND PLANNING

3. To be process : weekly breakdown Demand Review example

3. To be process : DP SCOR Level 4 input/output example

Divisional

European

weeks weeks weeks

Local

3. LOCAL PLANT

SUPPLY REVIEW

2. DEMAND REVIEW BY

cluster / customer

3B. EUROPEAN

SUPPLY REVIEW

7. EMEA financial Reconciliation

5. LEADERSHIP REVIEW EMEA

1. PRE DEMAND

REVIEW BY Cluster /

brand

2B. DEMAND REVIEW

EMEA

3. Policy : Revising the S&OP Cycle

3. Policy : Demand Review

The Pre-Demand meetings are held prior to and Country Demand Review meeting is held on the 5th

workday of each month. The purpose is to obtain consensus from Sales, Finance, and/or Marketing on the

new demand plan (units) rolling forward 18 months and reconcile the Risks and Opportunities from plan,

previous plan, to budget.

Attendees for the Pre-Demand : Attendees for the country demand review :

Country Country

National account controller Sales director

National account managers Marketing director

Sales director (optional) Demand planning (facilitator)

Marketing managers Commercial finance

Category managers Category management director (optional)

Demand planner (facilitator) General manager

Commercial finance Account controllers

S&OP Process owner

Agenda:

Review rolling 18-month forecast and historical performance

Review NPD and promotion events assumptions

Review gap fillers and historical forecast performance

Note any significant trends; new/lost listings; life cycle changes; special production and custom demands

Identify for reconciliation and leadership meetings: spotlight items; gap actions

3. Policy : Supply Planning

The Pre-Supply and Supply Planning meetings are held on the 5th and 10th workday of each month.

Attendees for Pre-Supply by plant and co-packers in aggregate include local representatives as plant manager,

production manager, planning manager, material manager, purchasing manager,…Attendees for Supply meeting

is at director role for both consumer &industrial activities

Purpose: To obtain consensus on the manufacturing plan going forward a rolling 18 months

Agenda for Pre-Supply Meeting:

Previous month’s performance

Requirements, capacity and production review

Material supply issues

Agenda for EMEA Supply Meeting:

Demand meeting highlights, new projects

Inventory review including projection

Supply Chain delivery reliability, warehouse utilization

Capacity and production review, SLOB review

Material supply issues, spotlight topics for reconciliation/leadership

The supply meeting will be re-scheduled if the planning team or operations representatives are absent. Any

stand-in representative must be authorized to act on behalf of their department.

The EMEA S&OP Reconciliation & Leadership meeting is typically held on between the 15th and 18th

workday of each month following the Supply meeting.

Attendees for the EMEA Leadership & Reconciliation group are :

GM Retail or Industry of each country/business

Finance Director Retail or Industry

Sales Director Retail or Industry

Marketing Director Retail or Industry

Supply Chain Planning Director

Purchasing Director

Operations Director Retail or Industry

Purpose: Align unit plan with budget and actively manage gaps.

Agenda:

Demand update review

Review financial reconciliation summary

Review gaps and financial impact

Supply update review

Review other significant issues

Review long term capacity constraints

S&OP Process review

3. Policy : Reconciliation & Leadership

3. Supply Chain Planning function realignment

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Plan Source Make Deliver Return P

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Pro

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Mate

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Pla

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tions

Co-p

ackin

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Custo

mer

Serv

ice

Ware

house a

nd

Logis

tics

Back Office / Supply Planning

Continuous Improvement, High Performance

Dem

and P

lannin

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Inte

rcom

pany

SLO

B a

nd Invento

ry

Supply Chain Planning Activity

4. Benefits

• Opportunity to redesign organization, processes and tools,

• Align and harmonize WOWs, processes, KPIs in a multi

country/business organization,

• Globally accepted language (SCOR) for process,

performance, practices, and people –fast adoption cross-

culturally enabling common deployment templates,

• Enable frequent benchmark with other FMCGS,

• Support continuous improvement philosophy,

4. Challenges

• Require project resource and time to achieve great results,

• Empower and develop people across the organization,

• Break the silo walls down between functions,

• Daily commitment of all functions to support the S&OP,

• Hardwired to IT both in terms of IT spend priorities as well as

pre-defined requirements –increased utilization of SAP

functionality,

• Never ending story eg strong change management culture….

5. The journey continues

• Supply Chain Excellence Program to focus on 5 areas :

• Leverage all SAP/ APO functionalities to achieve higher performance,

• Drive performance through aligned and widely shared KPI’s & reporting,

• Strengthen inventory management,

• Re engineer promotion process management,

• Excellence in execution thanks to process standardization, roles and responsibilities alignment & fully documented SOPs

• Yearly S&OP Assessment to measure improvement

• On going Six sigma training and projects to achieve higher performance

• Continuous benchmark with other FMCGs

QUESTIONS ?