The Industry s Leading Edge Process How Trading Partners Gain the Highest ROI on Collaborative Business Planning (CBP)

Transcription

1 The Industry s Leading Edge Process How Trading Partners Gain the Highest ROI on Collaborative Business Planning (CBP) Win Weber Chairman & CEO Winston Weber & Associates

2 Before We Begin 3 Minutes Of History The traditional relationship between retailers and suppliers is best characterized as one of mutual respect, cooperation, peaceful coexistence and distrust To someone outside the industry it would appear most retailer/supplier relationships are based on the What s in it for me philosophy instead of What s in it for us philosophy. We must encourage retailers and suppliers to bridge the gap and work together for mutual benefit. Both retailers and suppliers must accept the fact that without mutual benefit, or a win/win relationship, there is no partnership. W. Weber

3 Before We Begin 3 Minutes Of History Partnering is any Situation where the Retailer/Supplier Relationship is one where there is Agreement to Leverage Combined Resources for Competitive Advantage Cost Leveraging Supplier/ Retailer Leverage Optimum Category Performance Lower Cost Increased Unit Volume Increased Sales Revenue Increased Profits Increased Market Share Improved Customer Service More Satisfied Customer Best Cost Buying Use all Available Vendor Funds Increase Inventory Turns Improve Promotion Effectiveness Improved Promotion Efficiencies Improved System Efficiencies

4 Let s Talk About Today Typical Joint Business Planning Processes No updated, consistent or formalized process across the business Primarily based on a supplier push model- selling market position, strategies and brand plans to the retailer A tendency to focus on tactical and transactional issues with a short term focus Insufficient understanding and communication of retailer s strategies, objectives and capabilities under prepared for effective dialogue No clear and consistent approach for Top-to-Top meetings 75% of all Top-to-Top meetings are spent reviewing past performance with both parties talking at each other Lack of clear process for actioning collaborative initiatives that result from Top-to-Top meeting Inconsistent annual plan development process

5 Let s Talk About Today Only 20% of suppliers believe that their strategic collaboration efforts have achieved significant impact and 80% say it has delivered only minimal to moderate results Only 35% of retailers believe that suppliers really understand them while 65% say suppliers do not know enough about them Significant improvement must be made to satisfy the demands of the retailer, the supplier and importantly the shopper

6 Now, Let s Talk About The Future For Maximum Effectiveness, Neither the Retailer nor the Supplier can Go It Alone Neither party has all the data, analysis and insights Neither party has all the knowledge, expertise and resources Neither party controls all of the marketing levers to attract and convert consumers/shoppers

7 The Future Collaborative Business Planning Collaborative Business Planning An approach by which manufacturers and retailers are strategic partners through alignment of strategies, sharing and development of shopper insights and solutions, and application of efficiency enhancement initiatives leading to sustainable and mutually beneficial results longer term Focused on opportunities and solutions initiative based Annual/longer term planning/performance Sharing of consumer and shopper-centric insights Translation of insights into action Aligning on operational/functional opportunities Integration of knowledge/information is required currency to play Broadly or selectively applied

8 A Process That Offers sufficient flexibility to fit any retailer situation Collaborative Business Planning Results in more aligned and impactful business planning Ensures a sharp focus on issues and opportunities leading to shopper centric solutions Produces a much higher return on investment for resources deployed. A supplier or retailer who wants to be a winner in today s environment, and in the future, has no choice but to adopt the CBP process

9 Collaboration Framework Collaboration Framework Retailer Executive Sponsor Merchandising Leadership Manufacturer Executive Sponsor Customer Management Leadership Success Factors Growth Enablers Efficiency Enhancers Alignment Common Goals and Measures Resource Alignment Information/Data Sharing Functional Coordination Joint Planning Category Management Marketing/Consumer Marketing Supply Chain Information Technology Store Service/Execution Subject Matter Expertise Success Factors Growth Enablers Efficiency Enhancers

10 Elements Required to Drive An Effective CBP Process Direction Customer Alignment Goal and Strategy Go-to Market Strategy Customer Value Proposition Customer Segmentation Customer Assessment/ Strategy Business Review and Assessment Customer Profile Customer Strategies and Requirements Analysis,, Marketing Plans, Other to Fuel Collaborative Planning Brand Strategies, Objectives and Tactics Trade Promotion Strategy and Process and Platforms Logistics/ Supply Chain Improvement Market, Customer, Competitive Analysis

11 Meaningful Segmentation Drives Resource Investment High Customer Segmentation Framework Readiness/ Receptivity of Customers to CM and Marketing Index: Avg. = 100 Quadrant III: Lower ROI, but Strong Probability of Collaboration Quadrant IV: Minimal ROI Probability Quadrant I: Strongest ROI Probability Quadrant II: Strong ROI Potential Low Low Index: Avg. = 100 Size /Performance of Customers (Quantitative Measures) High

12 The 3 Tiered Collaborative Business Planning Process Collaboration Selective Collaboration Tactical Collaboration Alignment Meeting Annual Plan Alignment Meeting Annual Plan Alignment Meeting Team-to-Team Team-to-Team 2-4 Key Annual Customer Planning 2-4 Key Annual Customer Planning 2-4 Key Annual Customer Planning Centric Solutions Pre-planning Analysis/ Centric Solutions Pre-planning Analysis/ Centric Solutions Pre-planning Analysis/ Operations/ Functional Initial Plan Operations/ Functional Initial Plan Operations/ Functional Initial Plan Internal Strategy/Plan Alignment Internal Strategy/Plan Alignment Internal Strategy/Plan Alignment Customer Plan and Finalization Customer Plan and Finalization Customer Plan and Finalization

13 Collaboration Process Construct 2-4 Key Centric Solutions Operations/ Functional Collaboration Alignment Meeting Team-to-Team Annual Customer Planning and Management Pre-planning Analysis/ Initial Plan Internal Strategy/ Plan Alignment Customer Plan and Finalization Key Process Design Components Foundational strategy, process and capability elements required to drive CBP Customer profile, business assessment and strategic plans to build customer knowledge Detailed meeting preparation, principles and structure for Alignment Meetings (Top-to-Tops) High level process guidelines for Team-to-Team meetings to plan and execute strategic initiatives An integrated annual planning process to bring collaboration to life

14 Customer Knowledge and Strategy Tool Box Developed on Front End of Collaborative Process Advanced Customer Profile Business Review and Assessment Customer 2-3 Year Strategies Customer structure Key customer strategies and metrics Customer Purchase Decision Process Requirements and expectations for vendors collaboration readiness Successes and challenges 3 year history of volume trends and drivers Review of key business drivers Competitive landscape and performance P&L overview SWOT analysis Sustainable competitive advantages Keys to winning with the customer Growth objectives and strategies- 2-3 year horizon Resource requirements

15 Pre-Meeting Preparation and Communication 2-4 Key Centric Solutions Operations/ Functional Collaboration Alignment Meeting Team-to-Team Annual Customer Planning and Management Pre-planning Analysis/ Initial Plan Internal Strategy/ Plan Alignment Pre-Meeting Process Collaborate to identify and secure agreement on issues/ opportunities to be discussed Develop formal agenda for the meeting Determine pre-meeting preparation for supplier and retailer Conduct internal meeting to discuss key issues and approach for the meeting Develop and send pre-meeting communication to retailer/supplier 48 hours in advance Customer Plan and Finalization

16 Alignment Meeting Success Factors 2-4 Key Centric Solutions Operations/ Functional Collaboration Alignment Meeting Team-to-Team Annual Customer Planning and Management Pre-planning Analysis/ Initial Plan Internal Strategy/ Plan Alignment Customer Plan and Finalization Success Factors Limited Number Participants Executive/Senior Team Leaders 60%+ time on future Open Discussion Idea Exchange Pivotal Strategy Alignment Consumer/ Focus Customer/ Focus Broad Goals Near/Longer Term Resource Alignment Initiative Agreement

17 Outputs of the Meeting-Goal and Strategy Alignment Retailer Strategies Core Business and Merchandising Strategies Key category merchandising strategies/objectives Retailer Growth Objectives Overall Sales Growth Same Store Sales Growth Key Category Sales Growth Supplier Strategies Core Business and Customer Strategies Key category merchandising strategies/objectives Supplier Growth Objectives Overall Sales Growth Same Store Sales Growth Key Category Sales Growth Leverageable Areas of Alignment

18 Outputs of the Meeting- Alignment Area of Focus Description of Alignment Initiative Timing Team-to-Team Leader Focused Initiative 1 X X Supplier Resource Retailer Resource Initiative 2 X X Supplier Resource Retailer Resource Operations/Functional Alignment Initiative 3 X Supplier Resource Retailer Resource Initiative 4 X Supplier Resource Retailer Resource Other/Input into Annual Business Planning Initiative 5 X Supplier Resource Retailer Resource Initiative 6 X Supplier Resource Retailer Resource Initiative 7 X Supplier Resource Retailer Resource

19 Outputs of the Meeting- Shared Scorecard Senior-level Scorecard Category-level Scorecard A) Financial Measures 1. Growth 2. Net profits 3. Gross margins 4. Market share D) Trade Funding Update 1. Projected funds generated 2. Projected funds spent 3. Funds pacing B) Measures 1. Trips 2. Basket size 3. Core shopper acquisition E) Causal Measures 1. Distribution 2. Shelving 3. Merchandising 4. Pricing C) 1. Initiative w 2. Initiative x 3. Initiative y 4. Initiative z F) Operational Measures 1. Inventory 2. Service levels 3. GMROI

20 Outputs of the Meeting- Cascaded Down 2-4 Key Centric Solutions Operations/ Functional Collaboration Alignment Meeting Team-to-Team Annual Customer Planning and Management Pre-planning Analysis/ Initial Plan Internal Strategy/ Plan Alignment The outputs of the Alignment Meeting will be cascaded down into a Team-to- Team process for planning and execution The outputs will be classified into two categories with a Team-to- Team process for development of each. 3-4 longer term strategic initiatives Annual Business Plan inputs Customer Plan and Finalization

21 Centric Solutions 2-4 Key Centric Solutions Operations/ Functional Collaboration Alignment Meeting Team-to-Team Annual Customer Planning and Management Pre-planning Analysis/ Initial Plan Proven into Action Approach Team-to-Team Platform Alignment/Planning Meeting Market Assessment Synthesis Category Analytics Tactic and Program Retailer and Supplier Implementation Plan Research Internal Strategy/ Plan Alignment Customer Plan and Finalization Analyze, Review and Course Correct

22 Operations/Functional Initiative 2-4 Key Centric Solutions Operations/ Functional Collaboration Alignment Meeting Team-to-Team Annual Customer Planning and Management Pre-planning Analysis/ Initial Plan Internal Strategy/ Plan Alignment Customer Plan and Finalization Retailers will have varying interest in these types of initiatives for collaboration Cross functional initiatives may include: Supply Chain/Logistics alignment Retail-ready packaging Store execution support Information technology alignment Sustainability The selected initiatives are cascaded down to a team-to-team process for planning and execution with cross functional resources from both retailer and supplier

23 Annual Customer Planning and Management 2-4 Key Centric Solutions Operations/ Functional Collaboration Alignment Meeting Team-to-Team Annual Customer Planning and Management Pre-planning Analysis/ Initial Plan Outputs from the Alignment Meeting will also feed the collaborative Annual Customer Planning Process: Alignment on key brand priorities Alignment on key retailer priorities Profitable volume driving programs Internal Strategy/ Plan Alignment Customer Plan and Finalization

24 Customer Pre-Planning Meeting Release of topline F 13 brand strategies Receipt of Over-arching brand strategies and platforms Top-to-Top Alignment Meetings Quarterly sales & market-ing leader-ship review of F 13 plans Finaliz-ation of 2 nd Half F 13 market-ing plans Release of F 13 planning materials, new items, trade strategies, DSMP Customer Plan Team-to-Team Collabor-ation Meeting New itemsd Consumer/shopper programs initiatives F13 Marketing Plan Kick-off & go/no go 1 st Half F 13 innov-ation F 13 customer segment-ation and invest-ment rate release F 13 customer team plan develop-ment Quarterly sales & market-ing leader-ship review of F 14 plans Customer Present-ations 1 st Half F 13 firm 2 nd Half F 13 soft Finalization of F 13 market-ing plan & preview of 2 nd Half F 13 innov-ation 2 nd Half Customer Plan Collaboration Meeting New items Consumer & shopper marketing initiatives Final F 13 AOP alignment Final F 13 Advert-ising plans 2 nd Half F 13 innov-ation release Customer Present-ations 2 nd Half F 13 firm 1 st Half F 13 soft Collaborative Business Planning Must Be Fully Integrated Collaboration Alignment Meeting Integrated Annual Customer Planning (Marketing, Sales and the Retail Customer) Jan 2012 Feb 2012 Mar 2012 Apr 2012 May 2012 Jun 2013 Jul 2013 Aug 2013 Sep 2013 Oct 2013 Nov 2013 Dec Key Team-to-Team Annual Customer Planning and Management Marketing Centric Solutions Pre-planning Analysis/ Sales Operations/ Functional Initial Plan Customer Internal Strategy/ Plan Alignment Customer Plan and Finalization

25 Selective Collaboration Conducted With Tier 2 Customers Selective Collaboration 1-2 Key Centric Solutions Operations/ Functional Annual Plan Alignment Meeting Team-to-Team Annual Customer Planning and Management Pre-planning Analysis/ Initial Plan SVP level involvement Annual Plan Alignment Meeting structured for maximum productivity Focus on annual planning inputs Strong focus on shopper centric initiatives driven by global insights and platforms Selective strategic initiatives Internal Strategy/ Plan Alignment Customer Plan and Finalization

26 Remaining Customers Engaged In Tactical Planning Tactical Collaboration Annual Plan Alignment Meeting No Annual Plan Alignment Meeting with senior executives 1-2 Key Centric Solutions Operations/ Functional Team-to-Team Annual Customer Planning and Management Pre-planning Analysis/ Initial Plan Internal Strategy/ Plan Alignment Regional Sales Managers/Brokers Tactical planning only Minimal plan customization Modified Version of Selective Business Planning process Customer Plan and Finalization

27 A CBP Playbook Utilized For Training And Consistency Introduction- CBP Process & Strategy Collaborative Business Planning Play Book Key Play Book Elements 1.Customer Knowledge and Plan 2. Alignment Meeting 3.Team-to-Team Process for 4.Preview- Integrated Annual Planning Process and CBP activation timeline

28 Keys to Success Tone from Tone the Top From Top Develop Retailer Knowledge Analysis & Driven Consistent & Disciplined Process Raise Level of Engagement/Collaboration Listening, Dialogue & Sharing Mutual Benefit Key Strategies Objectives & Goals Alignment Opportunities No Two Retailers are Alike Into Activation Market Analysis & Customer Segmentation Strategies & Growth Platforms Comprehensive Training Reinforcement at all Levels Objectives/Measures Tracking via Scorecard

29 The Industry s Leading Edge Process How Trading Partners Gain the Highest ROI on Collaborative Business Planning (CBP) Winston Weber and Associates Thank You! If you would like to learn more please contact Win Weber at winweber@winstonweber.com