Agility and Cost Efficiency in Operations

Transcription

1 Agility and Cost Efficiency in Operations Magdi Batato EVP, Operations Nestlé Investor Seminar May, 2016

2 Disclaimer This presentation contains forward looking statements which reflect Management s current views and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments. 2

3 years 3

4 opened 298 closed bought 251 sold 436 whilst sales have doubled and production volume has tripled Number of factories

5 We are coming from a long-term commitment to Operational Excellence Performance Operation EXCELLENCE 2007 Performance improvement is part of our DNA and sustains on-going savings to support business growth Target MH

6 Current number of trained problem solvers Number of improvement initiatives per year

7 7 Zero is our mindset to deliver Excellence

8 Recordable Injury Rate Driving Excellence in Safety Number of recordable injuries per million hours worked

9 Quality incidents Quality throughout the entire value chain 120 Production volume: + 27% %

10 OPEX Cost reduction [CHF million] Eliminating waste from our value chain Operational Excellence (OPEX) captures projects generating cost reduction

11 Case Fill Rate [%] Delivering the right product at the right time The percentage of cases delivered to the customers requirements

12 SKU number Delivering the right product at the right time

13 Index Strong performance on environmental indicators % -41% -43% Energy consumption/t Water withdrawal/t GHG emissions/t 40-75% Waste for disposal/t 13

14 Index Strong performance on environmental indicators % Production volume % -12% -14% Energy Water withdrawal GHG emissions % Waste for disposal 14

15 Our CSV efforts are recognised No 1 in environmental dimension No 1 in climate change Leader position in Water programme No 2 No 2 Certified Nestlé Industry best Industry average 15

16 16 Zero is our mindset to deliver Excellence

17 17

18 18 Our NCE and CSV are providing long term stability

19 Procurement Asset Intensity Category focus Operations NCE and CSV 19

20 Procurement Ensure competitive and sustainable sourcing: Leveraging our scale, knowledge and skills, while being connected to the business Implementing ONE procurement model across Nestlé The Nestrade Procurement Company Benefit over 3 years: CHF 0.5 billion Global Zone Local Above Market Market 20

21 Asset Intensity Benefit over 3 years: CHF 1 billion Sweat Operations assets: Reducing conversion and distribution costs Optimising our industrial footprint Whilst continuing to: Increase Safety, Quality and Service Reduce our environmental footprint Indexed Asset Intensity = 2015 base 21

22 Accelerating TPM to achieve benefits earlier TPM lines with higher Asset Intensity Indexed Asset Intensity 115 TPM implementation in Key Markets and Categories 100% % 60% % 20% % TPM* Lines All Nestlé lines 2015 TPM lines 0% * Total Performance Management 22

23 Category focus Benefit over 3 years: CHF 1 billion (cost avoidance) Increase Category focus: Better aligning from Strategy to Execution Accelerating Manufacturing performance improvement Increasing agility and speed e.g. faster introduction of new products 23

24 Operations A further step change in Operations: Leveraging disruptive technologies Internet of Things Advanced Analytics Advanced Robotics Starting first pilots Augmented Reality Wearables 3D Printing 24

25 Nestlé Operations combines two skills Farming and Hunting 25 Land preparation and planting Removing obstacles and stones Managing water and enriching the soil Controlling weeds etc. STABILITY and Seeking targets Deciding how to approach the target Being fast Aiming at first realistic opportunity etc. AGILITY

26 26 Moving from a gradual approach to a leapfrog approach

27 Procurement Asset Intensity Category focus Operations Shape the future of Operations AGILITY NCE and CSV STABILITY 27

28 3 Key Takeaways 1 NCE AND CSV DELIVER LONG TERM STABILITY TO NESTLÉ 2 FOUR IMPACT ACCELERATORS STRENGTHEN OUR ABILITY TO MOVE FAST AND TO BE RESPONSIVE 3 BOTH STABILITY AND AGILITY ENABLE OUR COMPANY TO SHAPE THE FUTURE 28