Transcription

Joint Business PlanNESTLE and TESCO in PolandJanusz Selwa – TESCO Polska (Poland)Michal Rubaszko – NESTLE Polska (Poland)

TESCO GloballyTESCO operates currently incountries.

TESCO in PolandTESCO is a third playeron Polish retail marketand first HM chain inPoland.CurrentformatstructureHYPERMARKETSAreaNo. of skuNo. of outlets4 – 12 k m250.00053DDS2 - 3 k m212.000411K SAVIA1 k m23.500232

NESTLE in PolandCulinaryConfectioneryBeveragesPet FoodInfant NutritionCerealsWatersLodyFoodServices

What isJoint Business Planning.?

What is Joint Business Planning?It all started with the UK 5 years ago, Nestlé in the UK had anegative growth rate with Tesco, at a timewhen Tesco was increasing it’s share ofthe UK Grocery market. Issues included:– A fragmented Nestlé approach to theTesco business– No endorsement by Senior Management tothe plans– No issue escalation process

INTERVENTIONWhat is Joint Business Planning?Business Unit’Sales networkJBP4 6.5%JBP 3 JBP2 focuson key categories 8.9%JBP 2 JBP1 KeyInitiatives 9.8%TOP Management DrivenJBP 1 –It worked 8.9%FragmentedApproachRequest toform Teams1998 - Tescoattempted to mirrorWal-Mart SuppliersDEATHSPIRALManagement Model2001/2Understood what was‘Really,ReallyImportantEasy to Attack –Difficult to do Business2002/3Listen,Acknowledge,Explore andRespond2003/42004/52005/6 Flexibility on Howwe Delivered Shared What wasImportant to Us2006/7

Traditional negotiationsWhat is Joint Business Planning?Annual NegotiationsJBP processSharing objectivesTrade TermsJointly AlignedShopper Based PlanNegotiatethe gapsActivity PlanJBP incl. TT

What is Joint Business Planning?Fundamental changes made .–––––Greater listening and understanding on both sidesIncreased trustIncreased transparency and visibility of businessShared more and aligned plans togetherJoint ownership responsibility / mutual goals

What is Joint Business Planning?Each Category Produces and Agrees a Business PlanPlan ProgramI Can Get What I Want 68% 106% 30%%GrowthTescoProfits (Mio)%Growth10.602935 30%9.1%Service Level91%95%TARGETSWe Deliver Consistently Every DayWe Make Our Jobs Easier to DoSales Test vControlB: 1.5%P: 1.2%By WhoWhen Doesit Need to beDone ByQ1 Q2 Q3 Q4 Next Steps2006/9First for innovation:- Format plan for ALL NPD, NPD highlighted as a % inJBP, Prioritised NPD based on Size of Prize-Drive On-Shelf Availability through better in-storesupport, using "Always Available"2006/7Provide best-in-class category insight for every Com2006/7Tesco & Nestle to agree a plan for "Helping you behealthier everyday" with significant focus on selectedcategoriesNo Invoicing Queries - All invoices processedaccurately and paid on timeNew products setup on system within 12wks of launch2006/7Provide categoryexpertise to supportevery range review forevery Tesco formatJointly agreed 12 monthhealthier plan worth TBCm RSV100%75%100%WIP98.5%YTD Range:Winning the Treble: Promotions, NPI, Petcare growth92.5% - 97.6% Jointly agree best-in-class processes for the above2006/72006/72006/72006/7Focus on Colloborative Planning:1] Reduce Failed To Arrive (FTAs) (less than 1%)2] Seasonality3] Base SalesVendor Managed Inventory (VMI)2006/7Investigate and implement innovative RRP and MUsolutions where it makes people's jobs easierEfficient Checking - To enable faster vehicle turnaroundat Tesco Depots2006/7TBCTBCTBCTBCTBCTBC xxxm, xx.x%Drive categories' sales through good Joint BusinessPlans2006/7Roll-out across all Nestlecategories95% of range inc.85%RRP/MUsPhased roll-out across allNestlé categories2007/82006/7Better, Simpler, Cheaper12.1% 15.1% 18.5%95%We Try To Get It Right First TimeWe Always Save Time and Money 44% 174% 21% 111%Total MarginDrive 1m incrementalsales at RSVEarn Lifetime Loyalty74YTD Achieved What Needs To Be Done 33m category Petcare step change 3 year growth plangrowth (2006YTD)45% market share within WIP12wks of launchCUSTOMERShopping Trip400OPERATIONS31095%BUSINESS PLANCOMMUNITY2402009FINANCE116.52008The Way We Work TogetherSales Turnover (Mio)2007PEOPLE2006Overall KPI Target 150m in 3 yearsBe Responsible, Fair and HonestBe a Good NeighbourGrow SalesMaximise ProfitDeveloping the Best People xxxm, xx%xx%, x.x%ptsBuild a Joint Business Plan for every FormatDrive categories' profit and margin through good JointBusiness PlansAn agreed Induction Planused by both partiesDevelop a Joint Induction Plan for all Nestle-Tescoemployees (including Helping Hands / TWIST)TBCTesco to share withNestle all relevantcustomer plansRated as Top 3 supplieron use of TescoLink byTescoProvide visibility of Tesco's priorities through theCustomer Plans2006/7Best-in-Class Application of TescoLink2006/72006/7REVIEW “BRAG” A simple document sets out the annual business against all parts of theTesco steering wheel and a set of agreed joint targets Reviewed every period between Account Manager and Buyer using the Blue,Red Amber Green traffic light process

What is Joint Business Planning? We share our ambition for categories and brandsbased on shopper and consumer insightWe build a plan that addresses key consumer/shopper needs and Tesco/Nestlé opportunitiesWe commercialise the plan to work for Nestléand Tesco using all “levers” e.g. innovation,distribution, price, promotion, display, front/backmargin to sell more product to more shoppersWe set this plan against the Tesco SteeringWheel and the ELH Shopping TripWe build a month by month execution planWe review regularly and course correct to getachieve goals

What is Joint Business Planning?3. Write the Business Plan & Agree Jointly0. Identify Point of Departure1. Share plans, ambitions & insightsCategory Planicl. 3-yearvision (Nestlé)ShopperInsight(Nestlé/Tesco)4. Execute the PlanCustomerStrategy(Tesco)2. Identify the mutual opportunities5. Review & Course Correct

What is Joint Business Planning?PLANDOPlan ProgramI Can Get What I WantCUSTOMERShopping TripREVIEWYTD Achieved What Needs To Be Done 33m category Petcare step change 3 year growth plangrowth (2006YTD)45% market share within WIP12wks of launchDrive 1m incrementalsales at RSVSales Test vControlB: 1.5%P: 1.2%2006/72006/7Tesco & Nestle to agree a plan for "Helping you behealthier everyday" with significant focus on selectedcategoriesNo Invoicing Queries - All invoices processedaccurately and paid on timeNew products setup on system within 12wks of launch2006/7100%WIPWe Deliver Consistently Every Day98.5%YTD Range:Winning the Treble: Promotions, NPI, Petcare growth92.5% - 97.6% Jointly agree best-in-class processes for the aboveWe Make Our Jobs Easier to DoWe Always Save Time and MoneyRoll-out across all Nestlecategories95% of range inc.85%RRP/MUsPhased roll-out across allNestlé categoriesWhen Doesit Need to beDone ByQ1 Q2 Q3 Q4 Next Steps2006/9Provide best-in-class category insight for every ComWe Try To Get It Right First Time75%By WhoFirst for innovation:- Format plan for ALL NPD, NPD highlighted as a % inJBP, Prioritised NPD based on Size of Prize-Drive On-Shelf Availability through better in-storesupport, using "Always Available"Provide categoryexpertise to supportevery range review forevery Tesco formatJointly agreed 12 monthhealthier plan worth TBCm RSV100%Earn Lifetime LoyaltyOPERATIONSCourse CorrectOverall KPI Target 150m in 3 yearsFocus on Colloborative Planning:1] Reduce Failed To Arrive (FTAs) (less than 1%)2] Seasonality3] Base SalesVendor Managed Inventory (VMI)Investigate and implement innovative RRP and MUsolutions where it makes people's jobs easierEfficient Checking - To enable faster vehicle turnaroundat Tesco 06/7Ensuring the plan stays on course and adapting to changingcircumstances is a fundamental part of the processCOMMUNITYFINANCEPEOPLEThe Way We Work TogetherBetter, Simpler, CheaperTBCTBCTBCTBCTBCTBC xxxm, xx.x%Drive categories' sales through good Joint BusinessPlans2006/7Be Responsible, Fair and HonestBe a Good NeighbourGrow SalesM aximise ProfitDeveloping the Best People xxxm, xx%xx%, x.x%ptsBuild a Joint Business Plan for every FormatDrive categories' profit and margin through good JointBusiness PlansAn agreed Induction Planused by both partiesDevelop a Joint Induction Plan for all Nestle-Tescoemployees (including Helping Hands / TWIST)TBCTesco to share withNestle all relevantcustomer plansRated as Top 3 supplieron use of TescoLink byTescoProvide visibility of Tesco's priorities through theCustomer Plans2006/7Best-in-Class Application of TescoLink2006/72006/7

Steps we took in Poland.

Preparations on NESTLE sideSALESLOGISTICSMARKETINGFINANCE

Opening for each otherTop to Top meetingMeeting held In October 2007- to share business vision;- to discuss strategies;- to improve relations.Business Leders MeetingTESCO Conference inNovember 2007- to show our strategy toTESCO employees (around200 managers);

Wisła – March 2008 – Joint Business Plan WorkshopBoth sides were entirely commitedto deliver the Joint Business Plan.Meeting participants from:- Marketing- Sales- CCSD- Logistics

Action Plan set for the rest of 2008040506070809101112CAT-MANZupy jak BulionyZupyPomysłWellnessu mamy z nożem Standardna.noweMajoneznowyAkcjaPomysły gratismajonez Świętana.CROSS - MERCHRange ReviewWellnessKubekw 1K3w1(20 4)Espiro NESCAFE Urodziny(tailor) Collection TESCOFestiwalKawyAkcjaŚwiętaCROSS - MERCHCAT-MANWellnessPrincessaakcja dlaTESCOPrincessa,Princessa Festiwal AkcjaKitKat,on-pack Słodyczy ŚwiętaAEROCROSS - MERCH

Joint Business Plan and ScorecardAll the prepared plans werewrote down and put into ascorecard. Next step is totrack if they are properlyexecuted.Execution of Joint BusinessPlan has to bringmeasurable benefits in areaof sales and profits.

Joint Logistics InnitiativeParameters controlled:Central LevelLocal Levelshelf fill rateshelf capacitysales factorstock in outletspromotional orderpromo order proposalOOS in TESCO (NESTLE products)OOS ,20%

Develop People in JBP wayTesco – Nestle Purina workshop held in St.Louis helped to supportplan for category development via stakeholders of both partnersWE MANAGED TO INVOLVEALSO HUNGARIAN TEAMAFTER VISIT IN LEARNING CENTRE WE GOT STRONG PLAN FOR FURTHER GROWTH:all stakeholders from Tesco and Purina are involvedwe got strong commitment from Tesco to take part in 1bln Euro market opportunity in Poland – to bepresented at Tesco boardagreed shelf remerchandising from horizontal to vertical blockingagreed repositioning of snacks in category – exploring potential of impuls segmentbranded gondolagondola-end test in 33-4 locations (Q4.2008)special pet event with local media engagement – 3 top locations (10.08)cooperation on Tesco web sitedetailed challenging plan covers 32 points in total.

Joint Category ManagementCategoriesDate of 05.2008Culinary06.2008

„Donuts Promo” Total number of stands - 951–12 stands in each HM–5 stands in each DDS–1 stand in each 1K No. of outlets: 296GdyniaRadomskiGdynia –– RafałRadomskiPoznań Opieńskiego–RafałMaciekJezierskiKraków Kapelanka– Tomek Tokarski

„Donuts Promo”Donuts in TESCO200018001600140012001000Increase 41%395.000 pc.8006004002000W1W2W3W4W5W6Donuts 200790010261000120013001026Donuts 2008100011761200190017001176Sprzedaż NCL 200g w sztukach w HipermarketachSprzedaż N.Gold 200g w sztukach w 100002000800015006000400020000W1W2W3W4NCL - 2007627575647383NCL - 200810829109108104Increase 40%12.500 pc.W5W669431359611115134451646414259Increase 106%4.580 pc.10005000W1W2W3W4W5W6NESCAFE Gold - 2007102612221132108114941723NESCAFE Gold - 2008117610781151238127933709

Sales results for 2008I - VIII 200835 000 PLNI - VIII 2007 29% 31%30 000 PLN 23% 21%25 000 PLN 43% 40%20 000 PLN 27%15 000 PLN 31%10 000 PLN-2% 4%5 000 InfantCerealsBeveragesCulinary0 PLN

7 principles that support JBP1The consumer / Shopper is King2We set “SMART” goals3Clear on the “what” (i.e KPI’s) BUT FLEXIBLE on the “How”4Senior Management endorsement and visible support567A process, not an event – PLAN, DO, REVIEWFocus on the 90% we agree and work through the 10% we don’t“What’s right” mindset v. “Who’s right”

Efficient Distribution and Transportation