Leading companies are focusing their supply chains on the customer and consumer. They design supply chains from the shelf back to ensure they are winning customers and consumers. They also balance global scale with local responsiveness to meet varied customer needs. This allows them to gain a competitive edge through customer service innovations, flawless execution, joint supply chain value creation, and responsiveness. In real life, companies focus on service, work closely with customers, and ensure flexibility to pursue opportunities and provide differentiated products and services.

1. CUSTOMER DRIVEN SUPPLY
MAKING SUPPLY A COMMERCIAL COMPETITIVE EDGE
CHRIS POOLE

2. By way of introduction
I’m Chris Poole
 23 years at Procter &Gamble, working in
– sales / customer service / physical distribution
 Head of Supply Chain at PA Consulting
 Director of Value Chain at B&Q

3. So what to cover
What leading edge companies are already doing
in Supply Chain
How they have made supply chain a commercial
competitive edge
What this means in real life – tips on what you
can do to get started

4. What leading edge companies are already doing…
Have relentless focus on the consumer and the customer end-to-end
A changed mindset!
FROM
The supply chain are just cost centres. The drivers for investment
have been simplification, automation and cost reduction.
TO
The supply chain is regarded as a business driver, with investment
targeted at delighting the consumer at the point of sale.

5. What leading edge companies are already doing…
Have relentless focus on the consumer and the customer end-to-end
Consumer is boss
win at two moments of truth
In-store At home
Right price Delivers on
Right quality usage promise
Right place
Right time
Right product

6. What leading edge companies are already doing…
Have relentless focus on the consumer and the customer end-to-end
Design the entire supply chain from the shelf back – invest in what it takes to win with
consumers and with customers (to get to consumers).
 Invest in the supply chain to make product and service differentiations which build
top line growth
 Line up all supply chain stakeholders to focus on winning with consumers – ensure
that they know how they contribute.
 Collaborate with customers and suppliers
 Get senior business management active leadership
Procter and Gamble initiated their consumer driven supply chain initiative
six years ago. It was only successful when led directly from the highest
levels within the organisation. As a result, Procter and Gamble have seen
a 17% improvement in perfect order performance.

7. What leading edge companies are already doing…
Balance global scale with local response
Create flexibility to have different supply chains to reach different markets and different
customers/different needs within customers
.
Continue to relentlessly reduce costs in ‘non customer facing’ activities – eg standard
processes and systems where they provide increased ‘back office’ efficiency so that the
all differentiation is focussed on customers and consumers
Tesco demand multi-format products to satisfy the high variations required
to best support a Tesco-Extra store vs a Metro store.
Argos (UK catalogue retailer) is now dealing with almost equal volumes of
in-store and on-line purchases and an even balance of in-store collections
vs deliveries – and they are market leader

8. So what to cover
What leading edge companies are already doing
in Supply Chain
How they have made supply chain a commercial
competitive edge
What this means in real life – tips on what you
can do to get started

9. A commercial competitive edge…
…
How they have made supply chain a competitive edge
Secure the basics
 Product availability
LEAD
 Right first time order to cash cycle Playing to
WIN
 Electronic Trading
 Forecasting collaboratively with VALUE
Customers – especially on promotions Efficient SC to shelf
and new initiatives
Ensuring
BASICS don’t lose
Excellent in execution
Foundation
 Understand own SC
FOUNDATION
 Understand customer SC strategy
Getting in to the game

10. A commercial competitive edge…
…
How they have made supply chain a competitive edge
Customer service innovation
 Lead Customers – create templates for
others to follow
LEAD
Playing to
WIN
VALUE
To maximise value Efficient SC to shelf
 Efficient product portfolio / complexity
management
Ensuring
BASICS
 Differentiated product and services Excellent in execution
don’t lose
 Shelf ready packaging
 Focus on shelf availability FOUNDATION
Getting in to the game
 Cost effective replenishment process

11. A commercial competitive edge…
…
How they have made supply chain a competitive edge
External focus
measures aligned with
customers and consumers
Synchronisation Flawless Execution
Real time information flow get the basics right
Consumer driven supply
Joint supply chain
Loss elimination value creation
Take out non value added time, working with customers to
inventory and complexity improve service and reduce cost
Responsiveness
Product and service differentiations

12. So what to cover
What leading edge companies are already doing
in Supply Chain
How they have made supply chain a commercial
competitive edge
What this means in real life – tips to get started

13. What this means in real life
External Focus / Flawless Execution
Overall:
Be clear on what Customers and Consumers want – deliver it (or have good reasons not to!). Line up
whole organization so that they know how they contribute to Customer satisfaction
Specifics:
 Focus on service throughout the organization – be clear on metrics to align the organization and
make the metrics visible – eg shelf availability on Plant scorecards
 Get close to Customer Service / Logistics / Planning ‘all in the boat together’ – eg daily task force
meetings for big promotions and new introductions
 Be absolutely consistent in application across Plants / seek out best practice and ensure re-
application
 Measure and track success with Customer measures as well as your own
 Religiously root cause ‘Top 10’ service misses and make sure that they do not happen again
 Understand Customer requirements and how they measure your performance – go out and visit
them / get them into your Plants – when was the last time you went to see a Customer?
 Ensure Suppliers and logistics providers are clear on the ‘service and cost’ focus and provide
incentives to for them deliver – eg Supplier Business Development teams

14. What this means in real life
Joint Supply Chain Value Creation / Responsiveness
Overall:
Be flexible and responsive = better service which means more business / more flexibility means more
commercial opportunities
Specifics:
 Work closely with Customer Service to align expectations – eg Go to Market and Operating
Strategies aligned at start of year – gaps identified and worked through up front
 Accept that forecasts will be wrong – and work to provide manufacturing flexibility within defined
parameters
 Provide capability to be able to efficiently execute product and service differentiations which can
build volume – eg special packs / pallet height differentiation / pack stickers - these are here already
and will only stay and increase
 Have the manufacturing flexibility to take advantage of business opportunities – eg power sku’s
 Be flexible to make more sku’s every day – produce to demand rather than to forecast
 Find ways of making smaller batches more frequently – eg through faster changeovers.
 Be open to make changes to your delivery ‘method’ – full pallets / layers / trays / cases and
manufacture and pack these on the line

15. What this means in real life
Loss Elimination / Synchronization
Overall:
Absolutely continue to keep rigorous control of costs and ensure that any flexibility is rigidly justified.
Where possible synchronize information flow up the supply chain and product flow down – in order to
ensure end to end visibility
Specifics:
 Continue what you undoubtedly already do on waste and cost elimination – BUT not at the expense
of service!
 Ensure best practice is identified and spread across the network – eg horizontal process teams led
by line managers
 Flag inefficiencies to the business – especially those which come from the service approach – this is
not ‘open season’ for Sales and Marketing – ensure that extra cost is transparent so that return on
investment is clear
 Have a relentless and disciplined approach to Obsoletes elimination – you have to make room for
the new co-differentiation
 Track the location and amount of product and raw materials in the Supply Chain to ensure eliminate
buffers / deliver in line with demand

16. These are the important things:
These are the important things:
• Start with mindset change – be clear that Consumer is Boss and Service is the start
point for all you do
 Not rocket science – ensure strong execution of the basics – be disciplined on
process deployment
 Disciplined adherence to agreed processes and ‘zero tolerance’ tracking to ensure
adherence
 Ensure single processes across the business