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07 joint business_planning_with_tesco_and_nestle
 

07 joint business_planning_with_tesco_and_nestle

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    07 joint business_planning_with_tesco_and_nestle 07 joint business_planning_with_tesco_and_nestle Presentation Transcript

    • Joint Business Plan NESTLE and TESCO in Poland Janusz Selwa – TESCO Polska (Poland) Michal Rubaszko – NESTLE Polska (Poland)
    • TESCO Globally TESCO operates currently in countries.
    • TESCO in Poland TESCO is a third player on Polish retail market and first HM chain in Poland. Current format structure HYPERMARKETS DDS 1K + SAVIA Area 4 – 12 k m2 2 - 3 k m2 1 k m2 No. of sku 50.000 12.000 3.500 No. of outlets 53 41 232
    • NESTLE in Poland Culinary Confectionery Beverages Pet Food Lody Infant Nutrition FoodServices Cereals Waters
    • What is Joint Business Planning...?
    • What is Joint Business Planning? It all started with the UK •5 years ago, Nestlé in the UK had a negative growth rate with Tesco, at a time when Tesco was increasing it’s share of the UK Grocery market. Issues included: – A fragmented Nestlé approach to the Tesco business – No endorsement by Senior Management to the plans – No issue escalation process
    • What is Joint Business Planning? INTERVENTION JBP4 +6.5% JBP 3=JBP2 + focus on key categories +8.9% JBP 2 = JBP1 + Key Business Unit’ Initiatives +9.8% Sales network TOP Management Driven Fragmented JBP 1 –It worked +8.9% Approach Request to form Teams Easy to Attack – Understood what was • Flexibility on How Difficult to do Business ‘Really,Really we Delivered Important 1998 - Tesco •Shared What was attempted to mirror DEATH Listen, Important to Us Wal-Mart Suppliers SPIRAL Acknowledge, Explore and Management Model Respond 2001/2 2002/3 2003/4 2004/5 2005/6 2006/7
    • What is Joint Business Planning? Annual Negotiations Trade Terms Activity Plan Traditional negotiations Sharing objectives Jointly Aligned Negotiate JBP incl. TT Shopper Based Plan the gaps JBP process
    • What is Joint Business Planning? Fundamental changes made….. – Greater listening and understanding on both sides – Increased trust – Increased transparency and visibility of business – Shared more and aligned plans together – Joint ownership responsibility / mutual goals
    • What is Joint Business Planning? Each Category Produces and Agrees a Business Plan When Does it Need to be Plan Program Overall KPI Target YTD Achieved What Needs To Be Done By Who Done By Q1 Q2 Q3 Q4 Next Steps I Can Get What I Want £150m in 3 years £33m category Petcare step change 3 year growth plan 2006/9 growth (2006 YTD) 45% market share within WIP First for innovation: 2006/7 20 06 20 07 20 08 20 09 12wks of launch - Format plan for ALL NPD, NPD highlighted as a % in CUSTOMER JBP, Prioritised NPD based on Size of Prize Drive £1m incremental Sales Test v -Drive On-Shelf Availability through better in-store 2006/7 sales at RSV Control support, using "Always Available" B:+1.5% P:+1.2% Provide category Provide best-in-class category insight for every Tesco 2006/7 expertise to support format: every range review for -Extras-Superstores-Metro-Express-Dot.Com Shopping Trip every Tesco format S le T rn v (M ) a s u o er io 16 1 .5 20 4 30 1 40 0 Earn Lifetime Loyalty Jointly agreed 12 month Tesco & Nestle to agree a plan for "Helping you be 2006/7 healthier plan worth healthier everyday" with significant focus on selected £TBCm RSV categories We Try To Get It Right First Time 100% 75% No Invoicing Queries - All invoices processed 2006/7 accurately and paid on time 100% WIP New products setup on system within 12wks of launch 2006/7 We Deliver Consistently Every Day 98.5% YTD Range: Winning the Treble: Promotions, NPI, Petcare growth 2006/7 92.5% - 97.6% Jointly agree best-in-class processes for the above OPERATIONS %G w ro th 6% +0% +0 +8 16 3% +0 3% Focus on Colloborative Planning: 1] Reduce Failed To Arrive (FTAs) (less than 1%) 2] Seasonality 2006/7 3] Base Sales We Make Our Jobs Easier to Do Roll-out across all Nestle Vendor Managed Inventory (VMI) 2007/8 categories 95% of range in c.85% Investigate and implement innovative RRP and MU 2006/7 RRP/MUs solutions where it makes people's jobs easier TescoP fits (M ) ro io 1 .6 0 0 29 35 74 We Always Save Time and Money Phased roll-out across all Efficient Checking - To enable faster vehicle turnaround 2006/7 Nestlé categories at Tesco Depots Better, Simpler, Cheaper TBC TBC TBC COMMUNITY Be Responsible, Fair and Honest The Way We Work Together TBC TBC TBC %G w ro th +4 4% +7% +1 14 2% +1% 11 Be a Good Neighbour £xxxm, +xx.x% Drive categories' sales through good Joint Business 2006/7 Plans FINANCE Grow Sales Build a Joint Business Plan for every Format £xxxm, +xx% Drive categories' profit and margin through good Joint 2006/7 xx%, +x.x%pts Business Plans T ta M rg o l a in 9 % .1 1 .1 2 % +5 % +8 % 1 .1 1 .5 Maximise Profit An agreed Induction Plan Develop a Joint Induction Plan for all Nestle-Tesco TBC used by both parties employees (including Helping Hands / TWIST) PEOPLE Tesco to share with Provide visibility of Tesco's priorities through the 2006/7 Developing the Best People Nestle all relevant Customer Plans customer plans S rvice Le l e ve 9% 1 9% 5 9% 5 9% 5 Rated as Top 3 supplier Best-in-Class Application of TescoLink 2006/7 on use of TescoLink by Tesco TARGETS BUSINESS PLAN REVIEW “BRAG” • A simple document sets out the annual business against all parts of the Tesco 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 brands based on shopper and consumer insight • We build a plan that addresses key consumer/ shopper needs and Tesco/Nestlé opportunities • We commercialise the plan to work for Nestlé and Tesco using all “levers” e.g. innovation, distribution, price, promotion, display, front/back margin…to sell more product to more shoppers • We set this plan against the Tesco Steering Wheel and the ELH Shopping Trip • We build a month by month execution plan • We review regularly and course correct to get achieve goals
    • What is Joint Business Planning? 3. Write the Business Plan & Agree Jointly 0. Identify Point of Departure 1. Share plans, ambitions & insights 4. Execute the Plan Category Plan Shopper Customer icl. 3-year Insight Strategy vision (Nestlé) (Nestlé/Tesco) (Tesco) 2. Identify the mutual opportunities 5. Review & Course Correct
    • What is Joint Business Planning? PLAN DO When Does it Need to be Plan Program Overall KPI Target YTD Achieved What Needs To Be Done By Who Done By Q1 Q2 Q3 Q4 Next Steps I Can Get What I Want £150m in 3 years £33m category Petcare step change 3 year growth plan 2006/9 growth (2006 YTD) 45% market share within WIP First for innovation: 2006/7 12wks of launch - Format plan for ALL NPD, NPD highlighted as a % in CUSTOMER JBP, Prioritised NPD based on Size of Prize Drive £1m incremental Sales Test v -Drive On-Shelf Availability through better in-store 2006/7 sales at RSV Control support, using "Always Available" B:+1.5% P:+1.2% Provide category Provide best-in-class category insight for every Tesco 2006/7 Course Correct REVIEW expertise to support format: every range review for -Extras-Superstores-Metro-Express-Dot.Com Shopping Trip every Tesco format Earn Lifetime Loyalty Jointly agreed 12 month Tesco & Nestle to agree a plan for "Helping you be 2006/7 healthier plan worth healthier everyday" with significant focus on selected £TBCm RSV categories We Try To Get It Right First Time 100% 75% No Invoicing Queries - All invoices processed 2006/7 accurately and paid on time 100% WIP New products setup on system within 12wks of launch 2006/7 We Deliver Consistently Every Day 98.5% YTD Range: Winning the Treble: Promotions, NPI, Petcare growth 2006/7 92.5% - 97.6% Jointly agree best-in-class processes for the above OPERATIONS Focus on Colloborative Planning: 2006/7 1] Reduce Failed To Arrive (FTAs) (less than 1%) 2] Seasonality 3] Base Sales We Make Our Jobs Easier to Do Roll-out across all Nestle Vendor Managed Inventory (VMI) 2007/8 categories 95% of range in c.85% Investigate and implement innovative RRP and MU 2006/7 RRP/MUs solutions where it makes people's jobs easier We Always Save Time and Money Phased roll-out across all Efficient Checking - To enable faster vehicle turnaround 2006/7 Nestlé categories at Tesco Depots Better, Simpler, Cheaper TBC TBC TBC COMMUNITY Be Responsible, Fair and Honest The Way We Work Together TBC TBC TBC Be a Good Neighbour £xxxm, +xx.x% Drive categories' sales through good Joint Business 2006/7 Plans FINANCE Grow Sales Build a Joint Business Plan for every Format £xxxm, +xx% Drive categories' profit and margin through good Joint 2006/7 xx%, +x.x%pts Business Plans M aximise Profit An agreed Induction Plan Develop a Joint Induction Plan for all Nestle-Tesco TBC used by both parties employees (including Helping Hands / TWIST) PEOPLE Tesco to share with Provide visibility of Tesco's priorities through the 2006/7 Developing the Best People Nestle all relevant Customer Plans customer plans Rated as Top 3 supplier Best-in-Class Application of TescoLink 2006/7 on use of TescoLink by Tesco Ensuring the plan stays on course and adapting to changing circumstances is a fundamental part of the process
    • Steps we took in Poland...
    • Preparations on NESTLE side SALES LOGISTICS MARKETING FINANCE
    • Opening for each other Top to Top meeting Business Leders Meeting TESCO Conference in Meeting held In October 2007 November 2007 - to share business vision; - to show our strategy to - to discuss strategies; TESCO employees (around - to improve relations. 200 managers);
    • Wisła – March 2008 – Joint Business Plan Workshop Both sides were entirely commited to deliver the Joint Business Plan. Meeting participants from: - Marketing - Sales - CCSD - Logistics
    • Action Plan set for the rest of 2008 04 05 06 07 08 09 10 11 12 CAT-MAN nowe Zupy jak Buliony Zupy Pomysł Majonez nowy Akcja Wellness Pomysły u mamy z nożem Standard na... + gratis majonez Święta na... CROSS - MERCH Range Review Kubek 3w1 Espiro NESCAFE Urodziny Festiwal Akcja Wellness w 1K (20+4) (tailor) Collection TESCO Kawy Święta CROSS - MERCH CAT-MAN Princessa Princessa, Princessa Festiwal Akcja Wellness akcja dla KitKat, on-pack Słodyczy Święta TESCO AERO CROSS - MERCH
    • Joint Business Plan and Scorecard All the prepared plans were wrote down and put into a scorecard. Next step is to track if they are properly executed. Execution of Joint Business Plan has to bring measurable benefits in area of sales and profits.
    • Joint Logistics Innitiative Parameters controlled: Central Level Local Level shelf fill rate shelf capacity sales factor stock in outlets promotional order promo order proposal OOS in TESCO (NESTLE products) 6,00% OOS reduction 5,00% 4,00% 3,00% by 43% 2,00% 1,00% 0,00% 7 8 9 10 11 12 13 14 15 16 17 19 20 21 22 OOS 5,60% 5,40% 5,70% 5,17% 5,10% 4,27% 3,95% 5,09% 5,41% 4,55% 4,93% 3,19% 3,60% 3,90% 4,20%
    • Develop People in JBP way Tesco – Nestle Purina workshop held in St.Louis helped to support plan for category development via stakeholders of both partners WE MANAGED TO INVOLVE ALSO HUNGARIAN TEAM AFTER VISIT IN LEARNING CENTRE WE GOT STRONG PLAN FOR FURTHER GROWTH: - all stakeholders from Tesco and Purina are involved - we got strong commitment from Tesco to take part in 1bln Euro market opportunity in Poland – to be presented at Tesco board - agreed shelf remerchandising from horizontal to vertical blocking - agreed repositioning of snacks in category – exploring potential of impuls segment - branded gondola-end test in 3-4 locations (Q4.2008) gondola- 3- - special pet event with local media engagement – 3 top locations (10.08) - cooperation on Tesco web site - detailed challenging plan covers 32 points in total.....
    • Joint Category Management Instant Categories Countlines Culinary Coffee Date of change 02.2008 05.2008 06.2008 Implementation
    • „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: 296 Poznań Opieńskiego Rafał Radomski Gdynia – – Maciek Gdynia – Rafał Radomski Jezierski Kraków Kapelanka – Tomek Tokarski
    • „Donuts Promo” Donuts in TESCO 2000 1800 1600 1400 1200 1000 800 600 Increase +41% 400 200 395.000 pc. 0 W1 W2 W3 W4 W5 W6 Donuts 2007 900 1026 1000 1200 1300 1026 Donuts 2008 1000 1176 1200 1900 1700 1176 Sprzedaż NCL 200g w sztukach w Hipermarketach Sprzedaż N.Gold 200g w sztukach w Hipermarketach 18000 4000 16000 3500 14000 3000 12000 2500 10000 2000 8000 1500 6000 4000 Increase 40% 1000 Increase 106% 2000 500 0 W1 W2 W3 W4 12.500 pc. W5 W6 0 4.580 pc. W1 W2 W3 W4 W5 W6 NCL - 2007 6275 7564 7383 6943 13596 11115 NESCAFE Gold - 2007 1026 1222 1132 1081 1494 1723 NCL - 2008 10829 10910 8104 13445 16464 14259 1176 1078 1151 2381 2793 3709 NESCAFE Gold - 2008
    • Sales results for 2008 I - VIII 2008 I - VIII 2007 35 000 PLN 30 000 PLN +31% + 29% 25 000 PLN +23% +21% +43% 20 000 PLN +40% 15 000 PLN +27% 10 000 PLN +31% -2% +4% 5 000 PLN 0 PLN ry n y s ls am e iry er ge ar io ar ea ne at Da rit re lin tC ra er tio W C t ve Pe Cu nu C ec e Be Ic nt nf fa Co In
    • 7 principles that support JBP 1 The consumer / Shopper is King 2 We set “SMART” goals 3 Clear on the “what” (i.e KPI’s) BUT FLEXIBLE on the “How” 4 Senior Management endorsement and visible support A process, not an event – PLAN, DO, REVIEW 5 Focus on the 90% we agree and work through the 10% we don’t 6 7 “What’s right” mindset v. “Who’s right”
    • Efficient Distribution and Transportation