Joint Business Plan NESTLE and TESCO in Poland - Janusz Selwa - TESCO Polska (Poland) Michal Rubaszko - NESTLE Polska (Poland)
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Joint Business Plan
NESTLE and TESCO in Poland
Janusz Selwa – TESCO Polska (Poland)
Michal Rubaszko – NESTLE Polska (Poland)TESCO Globally
TESCO operates currently in
countries.TESCO in Poland
TESCO is a third player
on Polish retail market
and first HM chain in
Poland.
Current
format
structure
HYPERMARKETS DDS 1K + SAVIA
Area 4 – 12 k m2 2 - 3 k m2 1 k m2
No. of sku 50.000 12.000 3.500
No. of outlets 53 41 232NESTLE in Poland Culinary Confectionery Beverages Pet Food Lody Infant Nutrition FoodServices Cereals Waters
What is Joint Business Planning...?
What is Joint Business Planning?
It all started with the UK
•5 years ago, Nestlé in the UK had a
negative growth rate with Tesco, at a time
when Tesco was increasing it’s share of
the UK Grocery market. Issues included:
– A fragmented Nestlé approach to the
Tesco business
– No endorsement by Senior Management to
the plans
– No issue escalation processWhat is Joint Business Planning?
INTERVENTION
JBP4 +6.5%
JBP 3=JBP2 + focus
on key categories
+8.9%
JBP 2 = JBP1 + Key
Business Unit’ Initiatives +9.8%
Sales network
TOP Management Driven
Fragmented JBP 1 –It worked +8.9%
Approach
Request to
form Teams Easy to Attack – Understood what was • Flexibility on How
Difficult to do Business ‘Really,Really we Delivered
Important
1998 - Tesco •Shared What was
attempted to mirror DEATH Listen, Important to Us
Wal-Mart Suppliers SPIRAL Acknowledge,
Explore and
Management Model
Respond
2001/2 2002/3 2003/4 2004/5 2005/6 2006/7What is Joint Business Planning?
Annual Negotiations Trade Terms Activity Plan
Traditional negotiations
Sharing objectives Jointly Aligned Negotiate JBP incl. TT
Shopper Based Plan the gaps
JBP processWhat is Joint Business Planning?
Fundamental changes made…..
– Greater listening and understanding on both sides
– Increased trust
– Increased transparency and visibility of business
– Shared more and aligned plans together
– Joint ownership responsibility / mutual goalsWhat is Joint Business Planning?
Each Category Produces and Agrees a Business Plan
When Does
it Need to be
Plan Program Overall KPI Target YTD Achieved What Needs To Be Done By Who Done By Q1 Q2 Q3 Q4 Next Steps
I Can Get What I Want £150m in 3 years £33m category Petcare step change 3 year growth plan 2006/9
growth (2006
YTD)
45% market share within WIP First for innovation: 2006/7
2006 2007 2008 2009
12wks of launch - Format plan for ALL NPD, NPD highlighted as a % in
CUSTOMER
JBP, Prioritised NPD based on Size of Prize
Drive £1m incremental Sales Test v -Drive On-Shelf Availability through better in-store 2006/7
sales at RSV Control support, using "Always Available"
B:+1.5%
P:+1.2%
Provide category Provide best-in-class category insight for every Tesco 2006/7
expertise to support format:
every range review for -Extras-Superstores-Metro-Express-Dot.Com
Shopping Trip
every Tesco format
Sales Turnover (Mio) 116.5 240 310 400
Earn Lifetime Loyalty Jointly agreed 12 month Tesco & Nestle to agree a plan for "Helping you be 2006/7
healthier plan worth healthier everyday" with significant focus on selected
£TBCm RSV categories
We Try To Get It Right First Time 100% 75% No Invoicing Queries - All invoices processed 2006/7
accurately and paid on time
100% WIP New products setup on system within 12wks of launch 2006/7
We Deliver Consistently Every Day 98.5% YTD Range: Winning the Treble: Promotions, NPI, Petcare growth 2006/7
92.5% - 97.6% Jointly agree best-in-class processes for the above
OPERATIONS
%Growth +68% +106% +30% +30% Focus on Colloborative Planning:
1] Reduce Failed To Arrive (FTAs) (less than 1%)
2] Seasonality
2006/7
3] Base Sales
We Make Our Jobs Easier to Do Roll-out across all Nestle Vendor Managed Inventory (VMI) 2007/8
categories
95% of range in c.85% Investigate and implement innovative RRP and MU 2006/7
RRP/MUs solutions where it makes people's jobs easier
TescoProfits (Mio) 10.60 29 35 74
We Always Save Time and Money Phased roll-out across all Efficient Checking - To enable faster vehicle turnaround 2006/7
Nestlé categories at Tesco Depots
Better, Simpler, Cheaper
TBC TBC TBC
COMMUNITY
Be Responsible, Fair and Honest
The Way We Work Together
TBC TBC TBC
%Growth +44% +174% +21% +111%
Be a Good Neighbour
£xxxm, +xx.x% Drive categories' sales through good Joint Business 2006/7
Plans
FINANCE
Grow Sales
Build a Joint Business Plan for every Format
£xxxm, +xx% Drive categories' profit and margin through good Joint 2006/7
xx%, +x.x%pts Business Plans
Total Margin 9.1% 12.1% +15.1% +18.5%
Maximise Profit
An agreed Induction Plan Develop a Joint Induction Plan for all Nestle-Tesco TBC
used by both parties employees (including Helping Hands / TWIST)
PEOPLE
Tesco to share with Provide visibility of Tesco's priorities through the 2006/7
Developing the Best People Nestle all relevant Customer Plans
customer plans
Service Level 91% 95% 95% 95%
Rated as Top 3 supplier Best-in-Class Application of TescoLink 2006/7
on use of TescoLink by
Tesco
TARGETS BUSINESS PLAN REVIEW “BRAG”
• A simple document sets out the annual business against all parts of the
Tesco steering wheel and a set of agreed joint targets
• Reviewed every period between Account Manager and Buyer using the Blue,
Red Amber Green traffic light processWhat is Joint Business Planning?
• We share our ambition for categories and brands
based on shopper and consumer insight
• We build a plan that addresses key consumer/
shopper needs and Tesco/Nestlé opportunities
• We commercialise the plan to work for Nestlé
and Tesco using all “levers” e.g. innovation,
distribution, price, promotion, display, front/back
margin…to sell more product to more shoppers
• We set this plan against the Tesco Steering
Wheel and the ELH Shopping Trip
• We build a month by month execution plan
• We review regularly and course correct to get
achieve goalsWhat is Joint Business Planning?
3. Write the Business Plan & Agree Jointly
0. Identify Point of Departure
1. Share plans, ambitions & insights 4. Execute the Plan
Category Plan Shopper Customer
icl. 3-year Insight Strategy
vision (Nestlé) (Nestlé/Tesco) (Tesco)
2. Identify the mutual opportunities
5. Review & Course CorrectWhat is Joint Business Planning?
PLAN DO
When Does
it Need to be
Plan Program Overall KPI Target YTD Achieved What Needs To Be Done By Who Done By Q1 Q2 Q3 Q4 Next Steps
I Can Get What I Want £150m in 3 years £33m category Petcare step change 3 year growth plan 2006/9
growth (2006
YTD)
45% market share within WIP First for innovation: 2006/7
12wks of launch - Format plan for ALL NPD, NPD highlighted as a % in
CUSTOMER
JBP, Prioritised NPD based on Size of Prize
Drive £1m incremental Sales Test v -Drive On-Shelf Availability through better in-store 2006/7
sales at RSV Control support, using "Always Available"
B:+1.5%
P:+1.2%
Provide category Provide best-in-class category insight for every Tesco 2006/7
Course Correct REVIEW
expertise to support format:
every range review for -Extras-Superstores-Metro-Express-Dot.Com
Shopping Trip
every Tesco format
Earn Lifetime Loyalty Jointly agreed 12 month Tesco & Nestle to agree a plan for "Helping you be 2006/7
healthier plan worth healthier everyday" with significant focus on selected
£TBCm RSV categories
We Try To Get It Right First Time 100% 75% No Invoicing Queries - All invoices processed 2006/7
accurately and paid on time
100% WIP New products setup on system within 12wks of launch 2006/7
We Deliver Consistently Every Day 98.5% YTD Range: Winning the Treble: Promotions, NPI, Petcare growth 2006/7
92.5% - 97.6% Jointly agree best-in-class processes for the above
OPERATIONS
Focus on Colloborative Planning: 2006/7
1] Reduce Failed To Arrive (FTAs) (less than 1%)
2] Seasonality
3] Base Sales
We Make Our Jobs Easier to Do Roll-out across all Nestle Vendor Managed Inventory (VMI) 2007/8
categories
95% of range in c.85% Investigate and implement innovative RRP and MU 2006/7
RRP/MUs solutions where it makes people's jobs easier
We Always Save Time and Money Phased roll-out across all Efficient Checking - To enable faster vehicle turnaround 2006/7
Nestlé categories at Tesco Depots
Better, Simpler, Cheaper
TBC TBC TBC
COMMUNITY
Be Responsible, Fair and Honest
The Way We Work Together
TBC TBC TBC
Be a Good Neighbour
£xxxm, +xx.x% Drive categories' sales through good Joint Business 2006/7
Plans
FINANCE
Grow Sales
Build a Joint Business Plan for every Format
£xxxm, +xx% Drive categories' profit and margin through good Joint 2006/7
xx%, +x.x%pts Business Plans
M aximise Profit
An agreed Induction Plan Develop a Joint Induction Plan for all Nestle-Tesco TBC
used by both parties employees (including Helping Hands / TWIST)
PEOPLE
Tesco to share with Provide visibility of Tesco's priorities through the 2006/7
Developing the Best People Nestle all relevant Customer Plans
customer plans
Rated as Top 3 supplier Best-in-Class Application of TescoLink 2006/7
on use of TescoLink by
Tesco
Ensuring the plan stays on course and adapting to changing
circumstances is a fundamental part of the processSteps we took in Poland...
Preparations on NESTLE side SALES LOGISTICS MARKETING FINANCE
Opening for each other
Top to Top meeting Business Leders Meeting
TESCO Conference in
Meeting held In October 2007
November 2007
- to share business vision;
- to show our strategy to
- to discuss strategies;
TESCO employees (around
- to improve relations.
200 managers);Wisła – March 2008 – Joint Business Plan Workshop
Both sides were entirely commited
to deliver the Joint Business Plan.
Meeting participants from:
- Marketing
- Sales
- CCSD
- LogisticsAction Plan set for the rest of 2008
04 05 06 07 08 09 10 11 12
CAT-MAN
nowe
Zupy jak Buliony Zupy Pomysł Majonez nowy Akcja
Wellness Pomysły
u mamy z nożem Standard na... + gratis majonez Święta
na...
CROSS - MERCH
Range Review
Kubek 3w1 Espiro NESCAFE Urodziny Festiwal Akcja
Wellness
w 1K (20+4) (tailor) Collection TESCO Kawy Święta
CROSS - MERCH
CAT-MAN
Princessa Princessa,
Princessa Festiwal Akcja
Wellness akcja dla KitKat,
on-pack Słodyczy Święta
TESCO AERO
CROSS - MERCHJoint Business Plan and Scorecard
All the prepared plans were
wrote down and put into a
scorecard. Next step is to
track if they are properly
executed.
Execution of Joint Business
Plan has to bring
measurable benefits in area
of sales and profits.Joint Logistics Innitiative
Parameters controlled:
Central Level Local Level
shelf fill rate shelf capacity
sales factor stock in outlets
promotional order promo order proposal
OOS in TESCO (NESTLE products)
6,00% OOS reduction
5,00%
4,00%
3,00%
by 43%
2,00%
1,00%
0,00%
7 8 9 10 11 12 13 14 15 16 17 19 20 21 22
OOS 5,60% 5,40% 5,70% 5,17% 5,10% 4,27% 3,95% 5,09% 5,41% 4,55% 4,93% 3,19% 3,60% 3,90% 4,20%Develop People in JBP way
Tesco – Nestle Purina workshop held in St.Louis helped to support
plan for category development via stakeholders of both partners
WE MANAGED TO INVOLVE
ALSO HUNGARIAN TEAM
AFTER VISIT IN LEARNING CENTRE WE GOT STRONG PLAN FOR FURTHER GROWTH:
- all stakeholders from Tesco and Purina are involved
- we got strong commitment from Tesco to take part in 1bln Euro market opportunity in Poland – to be
presented at Tesco board
- agreed shelf remerchandising from horizontal to vertical blocking
- agreed repositioning of snacks in category – exploring potential of impuls segment
- branded gondola-
gondola-end test in 3-
3-4 locations (Q4.2008)
- special pet event with local media engagement – 3 top locations (10.08)
- cooperation on Tesco web site
- detailed challenging plan covers 32 points in total.....Joint Category Management
Instant
Categories Countlines Culinary
Coffee
Date of change 02.2008 05.2008 06.2008
Implementation„Donuts Promo”
• Total number of stands - 951
–12 stands in each HM
–5 stands in each DDS
–1 stand in each 1K
• No. of outlets: 296
Gdynia
Gdynia –– Rafał
Poznań Opieńskiego –Rafał Radomski
Maciek
Radomski
Jezierski
Kraków Kapelanka – Tomek Tokarski„Donuts Promo”
Donuts in TESCO
2000
1800
1600
1400
1200
1000
800
600
Increase +41%
400
200
395.000 pc.
0
W1 W2 W3 W4 W5 W6
Donuts 2007 900 1026 1000 1200 1300 1026
Donuts 2008 1000 1176 1200 1900 1700 1176
Sprzedaż NCL 200g w sztukach w Hipermarketach
Sprzedaż N.Gold 200g w sztukach w Hipermarketach
18000
4000
16000
3500
14000
3000
12000
2500
10000
2000
8000
1500
6000
4000
Increase 40%
1000
Increase 106%
2000 500
0
W1 W2 W3 W4
12.500 pc.
W5 W6
0
4.580 pc.
W1 W2 W3 W4 W5 W6
NCL - 2007 6275 7564 7383 6943 13596 11115 NESCAFE Gold - 2007 1026 1222 1132 1081 1494 1723
NCL - 2008 10829 10910 8104 13445 16464 14259 1176 1078 1151 2381 2793 3709
NESCAFE Gold - 2008Sales results for 2008
I - VIII 2008 I - VIII 2007
35 000 PLN
30 000 PLN
+31% + 29%
25 000 PLN
+23% +21%
+43%
20 000 PLN +40%
15 000 PLN +27%
10 000 PLN +31% -2% +4%
5 000 PLN
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In7 principles that support JBP
1 The consumer / Shopper is King
2 We set “SMART” goals
3 Clear on the “what” (i.e KPI’s) BUT FLEXIBLE on the “How”
4 Senior Management endorsement and visible support
A process, not an event – PLAN, DO, REVIEW
5
Focus on the 90% we agree and work through the 10% we don’t
6
7 “What’s right” mindset v. “Who’s right”Efficient Distribution and Transportation
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