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Operations Excellence
Evian Evian November 2009November 2009
SSafetyafety
QQualityuality
CCostost
DDeliveryelivery
EEnvironmentnvironment
MMotivationotivation
0 Loss Time Accident3rd Wise audit > 40pts
Reduce COGS/t
every year
100 mEUR B
ooster p
a
Capex at 3,5 to
4% C
ANN
Customer Service > 98,5%15 to 20% less DOH inventories pa
Kwh/t re
duced b
y 4%
+ pa
CO2 re
duced b
y 30
% b
y 20
13
Best Place to Work
Improve score at each Danone
survey
10% less
Consumer Com
plaints pa
CO2
Sourcing
Lead Win
2010 / 2012 2010 / 2012 OPERATIONS OPERATIONS
road maproad map
OptimiseOptimiseourour
OperationsOperationsFootprints & Footprints &
Networks Networks
Reduce theReduce theExposure &Exposure &
VolatilityVolatilityof rawof raw
materialsmaterials
Continuously improve Continuously improve our Operationsour Operations
Everyday, Everyday, we passionately we passionately
supply the best valuesupply the best value nutritionnutrition
to babies & toddlers, to babies & toddlers, throughthrough
operations excellenceoperations excellence
What is working !
• Base Powder recipes simplification,
• Transparency on budget cost and KPI’s,
• Consistent quality,
• Customer service,
• Productivity + Booster,
• Stock reduction.
What is not working !
• High Inventories,• Safety as a priority for all,• Lack of regular / frequent cost update in EMELA,• Portfolio Harmonization & management of complexity,• Supply of small markets (batch size / production runs),• Non quality write-offs (returns, marketing changes,
shelf life expiry),• S&OP Local –Regional – Global,• Some of our suppliers are also competitors,• Visibility of category sourcing strategies,
What is missing !
• How to support geographic opportunities ?• Low cost manufacturing footprint (affordable factory), • Small batch manufacturing capability, • 3rd party strategy, • Transversal career path (in / out of Operations),• Management of transversal / business projects,• Flexibility to align with multiple RTM, • Shorten time to Market (NPD),
What is possible !
• Tailor supply to market size / needs,• Supply chain as competitive lever (+/or quality),• Co2 Neutral (offset projects),• Best practices sharing,• 3rd parties to speed up innovation,• Identify (recognize) when complexity adds value
(specialties),• Lowest Base Powder cost in the world.
Enablers
• Articulate manufacturing master plans aligned to commercial plans,
• Robust S&OP process,• Flexible financial system / reporting, • Base Powder rationalization,• Massive dryers in Europe / Asia,• Flexible blending and packing facilities (foods + milks),• Management competencies and capabilities from
Front line managers,
Barriers
• € / $ SSD contracts
• Volatility in commodity prices
• Complexity :– Technology– Sku’s– Quality standards
• Cultural barrier to cross functional development and integration
2012
• € 4 Billion business plan
• “Big for Big” and “Small for Small” footprint.
• In everything we do, we execute right first time, while improving standards.
A uniquely integrated Operations & A uniquely integrated Operations & Commercial business that is a breakthrough Commercial business that is a breakthrough
competitive edgecompetitive edge
2012 (2)
• A seamless S&OP horizontal & vertical (3 dimensions),
• Speed To Market is our competitive weapon,• Operations is a CO + Cash engine : “ more Co,
less Co2”,• Operations is a reservoir of management
talents,• We have the BEST & The BEST MOTIVATED
people,• A real time & transparent cost model.
2012 (3)
• “Massive” dryers in Europe and China,
• Small, competitive and affordable tailor made blending & packing factories in emerging markets (Vietnam-Algeria-Bahrain- Brazil),
• Istra is completed,
• We reduced write-offs by € 10 M (50%)
2012 (4)• We have a centre of excellence for food category
blockbusters + small flexible competitive factories plants with competitive partners,
• X Gm’s have recently been appointed coming from Operations + 2 plant managers in Sales or Marketing.
• All Front Line Managers have been through Danone Leadership College,
• Reduce outsourcing to the minimum,• 1 Week FG Stocks,• A Completely integrated S&OP
2012 (5)
• No accidents since 12 months,
• SC DBN has been recognized by all key customers as best in class,
• A real cost reporting system + direct link commodity prices and retailer prices,
• 12 months shelf life,
• We own vertical integrated raw material supply,
2012 (6)
• TTM < 12 months. (idea launch),• Operations is a real business partner,• Commercial can articulate the OPS Strategy
and vice versa,• QFS is only focusing on Quality in Design
because OPS is fully under control,• €300 M delivered by 31/12/2012 and we budget
€ 350 M in 2013,• DBN Ops scores better than other Food
Operations (Danone survey)