Standardising S&OP at Coca-Cola HBC
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Stefan Ferretti presented on Coca-Cola HBC's standardization of their sales and operations planning (S&OP) process across 28 countries. They established a cross-functional team in 2014 to roll out a single, standardized S&OP process. Over 24 months, the team developed six standardized S&OP routines, templates, and a toolbox to transition from many different country processes to a single, unified "Hellenic way" of conducting S&OP. Key success factors included getting senior endorsement, making standardization a major initiative, linking the standard to performance metrics, and having cross-functional ownership and accountability for results.
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1. The document discusses how to reduce end-to-end supply chain costs while improving customer service. It focuses on flow mapping supplier constraints, reducing minimum order quantities, implementing family planning to group similar products, and reducing cycle times.
2. Case studies on consumer packaged goods companies demonstrated the approach led to consecutive weeks of perfect service, significantly reduced inventory levels, and cost savings of millions by eliminating waste.
3. The key principles allow companies in fast moving consumer goods to deliver near perfect customer service while eliminating waste and reducing overall supply chain costs.
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Demand driven principles can help companies better align production and inventory levels with actual market demand. This improves customer service while reducing inventory levels typically by 30%. The presentation discusses how the bullwhip effect and inherent instability in ERP systems can cause shipments and production to vary more than actual demand. Adopting demand driven practices like using inventory buffers and replenishing based on real orders rather than forecasts can create a more stable system. The presentation also covers engaging sales and marketing to provide better demand projections and adjusting processes and roles to successfully implement demand driven strategies.
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Standardising S&OP at Coca-Cola HBC
- 2. 2 Content • Background • From ‘many’, to ‘one’ • Key Success Criteria’s & Learning
- 4. 4 Who I am.. • Stefan Ferretti, half Danish / half Italian • 42 yrs old • Married, 2 Daughters • Triathlete • Located in Italy, serving the Group • 15 yrs+ SC experience with Arla Foods, Carlsberg, Heinz and Coke
- 5. 5 Background • CCHBC recently completed it’s SC Functionalization journey, initiated in 2014 • S&OP Process Standardization was from the very beginning identified as a MUST have and CORE priority • A dedicated X-Functional team was established, to Roll out Standardization along with All 28 Countries • The S&OP Standardization journey took almost 24 month to complete
- 6. 6 Content • Background • From ‘many’, to ‘one’ • Key Success Criteria’s & Learning
- 7. 7 From ‘Many’ to ‘One’ - Key Objectives in a Nutshell Standardization • 1 Way of effective conducting the S&OP Process • Standardized 6 S&OP routines and templates in place • S&OP tool box developed Simplification • No additional meetings, modification of current country routines • Aligned and simplified agenda of all routines • Reapplication, no duplication of the information & data sourcing Synchronization • X-Functional collaboration along the S&OP Process • Regional understanding and solution of SC capacity and constraints • Right people in the right meetings Performance • Improvement of main S&OP KBIs (FA, OSA, OOS, Inventory days, Losses) • Risk & Opportunity regular review & discussion v 6 Standard Routines v 1 Standard Agenda by Routines v 1 Set of Material by Routine v 1 Roles & Tasks of participants by Routine v 1 Number from S&OP to drive entire Business One Hellenic Way of doing S&OP
- 8. 8 Activity Review Demand Review Supply Review Finance Review Consensus Review S&OP Review w.1 w.2 w.3 w.3 w.4 w.4 - Innovation - Trade Act. - SKU mgnt - Demand consolidation - Supply Plan - Financial evaluation - Alignment - Decisions & Sign off 1 Process to support 1 S&OP Meeting, supported by 5 Preparation steps MKTG Sales SC Finance LT GM Ownership & Accountability The Standard &OP Process
- 9. 9 Content • Background • From ‘many’, to ‘one’ • Key Success Criteria’s & Learning
- 10. 10 Key Success Criteria’s & Learning • Get Senior Endorsement from the very beginning • Make it Big • Link Standard to Performance • Standardization part of MBOs • X-Functional Ownership & Accountability • Set Targets • Measure Results and share with senior mgnt