ConsumerPartnered with 5 of the top 15

global industry leaders

Over 100 successful change programs

completed globally

Delivered over $1.5bn EBITDA improvements

for clients

Over 85% repeat business

“

Consumer Sector Overview

hifts in global demand mean that growth markets for major brands are now in the developing world, presenting an opportunity for those companies that have made the right investments. In the developed world, the challenge remains the same: maintaining market share and margin with a relatively high cost base. Operational agility, both local and global, is key for consumer companies seeking to take advantage of these trends and outpace the competition.

S

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Challenges in the Consumer Sector

Location, Location, Location

Manufacturing capability in the developed world is generally still strong. Although the rest of the world is catching up, the skills base is deeply rooted and provides a competitive advantage against lower skilled countries. However, in some countries, much of the manufacturing capability has been lost through off-shoring and factory closures. Returning it closer to the market helps companies offset the increased costs of an extended supply chain, but many smaller and midsized businesses are struggling to find the necessary skills within their regions and are having to find solutions to secure the right competence and experience. Some companies have decided it is better to hold on to this capability than risk losing it forever.

Sourcing is also impacted by this responsive approach. Commodity prices are increasing, so businesses must look for different ways of managing input pricing. Long lead times from Asia mean that cash and cost need to be factored into the supply chain and balanced with the benefits of meeting market needs.

Balance of Power

In many countries retail power is very strong and to sustain margins pressure is placed upstream towards suppliers to reduce cost, the effect of which is leading to lower investment at the end of the chain in agriculture and bulk ingredients production. Smaller producers are therefore pulling out of the business, reducing overall competition and changing the structure of the industry, often to the benefit of those that remain.

Go Green

Sustainability and pressure to improve how a business uses scarce resources is rapidly rising up the agenda to be seen as a driver in increasing economic and brand value, rather than a cost. Progress reports to the financial world on this issue are commonplace in publically listed organisations and smaller, medium sized businesses are now designing both products and services that are visibly more sustainable. From a food perspective, consumers are becoming much better informed about the health benefits of fresher food with fewer food miles and demanding food that is produced locally, rather than shipped across the world, which in turn is increasing the need for more locally bespoke supply chain solutions.

Mass Customization

Consumer choice is increasing and impacting complexity. Differentiating brands includes creating more personalised products and offering more personalisation through mass customization. Sustaining a brand across multiple geographies and tastes brings this customization challenge into manufacturing, product lifecycle management and the supply chain. One obvious effect on manufacturing is that the efficiency model of large runs is no longer the right solution and managing the process holistically is essential. The whole supply chain needs to be fully integrated into the information flow to ensure the overall cost to serve is balanced. Increased flexibility in production also increases cost unless the organisation works differently, so demand and supply balancing is critical to deal with the uncertainty and demand flexibility.

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Operational Strategy & Implementation

BusinessStrategy

Operational Strategy

Day-to-day Implementation

Transparency of customer demand or forecasted demand is also crucial in allowing the flexible supply chain to operate.

The Market Demands Flexibility

How can we respond proactively to the market whilst managing the margin? Refocusing the supply chain to be able to respond more quickly has implications on the end to end chain, in particular the mental model of efficient production. Efficient production is about long runs and large batch sizes. Flexible production is the opposite. It is about being able to produce smaller volumes quickly and reduce inventory, but in such a way that gives the retailer or customer the confidence that delivery will be on time. It also means that from an operational management perspective, the OEE measurement becomes even more relevant in providing a holistic picture of performance and interaction within departments (maintenance and asset care, quality, engineering, production and supply chain including cash and inventory management). In our experience, many organisations measure and manage some elements of OEE, but struggle to really implement the measure to a level of granularity which promotes true benchmarking comparison and continuous improvement.

Collaboration is Key

This may also challenge where and how to produce. Make or buy? What footprint do we need to support? What collaborations should we encourage and foster with suppliers and customers? And what impact will all this have on the distribution process to ensure a first rate customer service? Similar challenges can arise in linking the business strategy to the day to day performance results. Demand and supply planning, for example, is an area where businesses are increasingly looking at how they can become more effective through closer collaboration.

How can Celerant Consulting help?

Consistency across the global or regional business, but with the freedom to customise for a local market, is essential. This could mean that the skills are located in one country, but required in another.

So how can skills transfer work? How does the business retain critical skills, but build new skills? Many clients are working on increasing the overall level of skill by transferring knowledge within the business. Rather than developing a central knowledge management process, this is taking the form of identifying current best practice, adding external involvement to complement and complete this knowledge and then rolling the practice out into the organisation through experienced practitioners. Many initiatives along these lines have focused on technical skills e.g. Lean or MRP systems but have placed less emphasis on the co-ordination required to get consistency across geographies or between functions.

The real challenge in all of this is the people. Creating flexibility requires people and an organisation willing and able to encompass change. Decision making needs to be at the points in the process where the rubber hits the road. People need to take on higher levels of responsibility and they need the right encouragement to do so effectively. Communication is critical to success, but communication with unknown colleagues and customers, remote working and perceptions of national and cultural differences are not conducive to this process. From an implementation perspective, the technical aspects of the operational value chain are well developed and businesses have recruited and retained talent. However, the human side of the equation is where the competitive advantage is created and it is this area which is the core focus of Celerant’s approach.

Technology Enablers and Support Services

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Functional Operations

Organizational & Leadership Effectiveness

Key Design Principles & Operating Model

Market & Product Strategy

Supply & Production Planning

Material & Sourcing Planning

Sales & Operations Planning

Strategy and Blueprint

Integrated Planning

Design Source Operate

Manufacturing Industrial Strategy

Asset Management

Sequencing & Material Flow Management

Sourcing Strategy & Selection

Purchasing & Contract Management

Supplier Mgmt Integration & Collaboration

Product & Innovation Strategy

Research & Development Management

Product Lifecycle Management

New Product Development

We supported this Fortune 500 brand leader on a strategic initiative to define its supply chain of the future, starting with the development of a regional operating model for Western Europe to replace the previous country by country organisation. A total of €200M of benefits were identified and a roadmap developed to prioritize projects across the end-to-end value chain including:

• Demand segmentation to drive service, forecast and inventory management processes and production strategy

• Integrated supply chain planning to enable fact based decision making

• Implementing one way of working through common processes, systems and roles

• Establishing a robust distribution network optimization capability• Rationalizing suppliers and parts and reduced TCO of common

equipment• Design and implementation of an integrated performance

management system• Reaching world class in performance and predictability in

operations through TPM• A common regional innovation process with standardized stage

gates

We helped realize over $60M of financial benefits for this leading US food service distributor by creating a new organization to replace the 65 previously independent operating divisions.

Prior to the project purchasing routines and vendor payment terms varied widely. Available data was scattered and disconnected, making it difficult to drive accurate forecasting. Trucks bound from suppliers to similar locations were not coordinated to maximize load rates, and schedule efficiencies that could be gained by combining deliveries across divisions were lost due to a lack of integration.

The answer to these problems was the creation of a new Replenish-ment Service Center (RSC), which involved a massive communication plan to involve, inform and engage the large workforce. By pooling the resources and purchasing power of regional divisions the company benefited from lower head count, savings on freight, and significantly improved service.

We helped our client, a leader in the Household Consumer Products and Personal Care industry, achieve its ambitious growth strategy by designing and implementing a new, robust stage gate process to sup-port product development.

Key to success was closer alignment between R&D, Marketing, Sales, Operations, Engineering, Purchasing, Customer Service and Finance functions. The project resulted in significantly faster time-to-market for new products.

Where Celerant Adds Value

Distribution Network Optimization

Supply Chain Strategy

New Product Development

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SustainabilityPerformance Management

Operational Excellence Roadmap

Logistics & Distribution Planning

Forecasting & Demand Planning

Working Capital & Inventory Management

Technology Enablers and Support Services

Network Sell Service

Network & Distribution Strategy

Warehouse & Transportation Management

Order Fulfilment

Sales & Segmentation Strategy

Sales Force & Commercial

Effectiveness

Order & Service Management

After Market Strategy

Customer, Warranty & Contract Management

Service Life Cycle Management

Responsible for some of the world’s best known beer brands, this brewing company knows how important promotions and innova-tion management are to keeping one step ahead of the competition. However, poor cross functional alignment was causing inventory problems, damaging service levels and impacting key account man-agement. An Integrated Planning project was needed to deliver a step change in performance.

• Improvements were made to sales and operations planning, inventory management, NPI and transportation. New demand planning processes were implemented with a focus on seg-mentation, customer habits and geographical patterns. Better market intelligence was used to develop more reliable forecasts. And a “playbook” was developed, based on the learnings from 3 pilot countries, of all changes, standard operating procedures, roles and responsibilities.

• Today there is much more flexibility around promotions, in-novations and changes to product mix with better transparency and reliability regarding the financial outlook based on more accurately forecasted volumes.

Installation cost and lead time overruns were damaging client satis-faction levels for this world leader in packaging solutions. We helped deliver a global transformation program covering Europe, Africa, Latin America, North America, China and South East Asia.

Achievements included a 23% reduction in installation costs and a 30% reduction in installation lead time. As a result of the project, the company was ranked by its number 1 customer as top performer.

Faced with rising raw material and utility costs, this large food com-pany needed to identify substantial cost savings across 13 plants. They needed to increase the output of existing capacity, significantly upgrade their production system and improve overall equipment effectiveness (OEE).

We helped implement a standardized Lean approach enabling the manufacturing facilities to reduce costs by $30M while increasing OEE. A visual management system with integrated KPIs was imple-mented. Production and maintenance scheduling was aligned and a new preventative maintenance system installed. Unplanned down-time and changeover cycle time was reduced by up to 50% and scrap reduced by up to 33%. And to support continuous improvement and ensure sustainability, a core team of Lean practitioners were trained in the Kaizen methodology.

Integrated Planning

Enhancing Service Levels

Lean Manufacturing

Functional Operations

Strategy and Blueprint

Integrated Planning

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What Makes us Different?

Celerant is ranked one of the world’s Top 5 consulting firm’s for change management.

MCRS®: Was today’s performance good or bad and how can it be improved? Is performance being hampered by silo mentality? Where is the empowerment that everyone talks about? MCRS® is our name for the performance management system that binds everything together.

It is an essential system which supports the flow of information from executive level to the cutting edge – and back again. It helps:

• Encourage real collaboration by making the right information available when and where it’s most needed

• Ensure timely decision making and action at each level of the organization on a daily basis

• Role model the optimal set of behaviors required throughout the organization to drive a culture of performance

• Relentlessly focus on the discipline of getting things done

It is only possible to achieve Operational Excellence with this kind of performance management in place and working fluently bottom-up, top-down and end-to-end. Clearly cascaded KPIs supported by the people with the right training, skills and behaviors to be able to handle difficult conversations, challenge performance and make fact-based decisions.

“This program has been great at delivering results in engagement, acceptance and technique. It has developed a group of people who understand the links between programs, systems and execution - and that 80% of success is through influencing and changing behaviors.” SVP Operational Excellence, Cadbury

Flexibility: While each project is unique all involve some form of collaboration between client and consultant teams to deliver shared goals and objectives. Some of our projects involve partnering with other consulting firms or with an internal consulting department. Others involve developing an internal change capability – training and coaching internal “change agents” and developing the custom tools and techniques to drive continuous improvement. Whether it is a tightly scoped local project or a complex global program we are able to provide the right level of support with the right skills transfer to deliver what matters most: sustainable results.

Results Certainty: We commit to the delivery of financial, operational and behavioral results within a fixed price and project timeline, even if this means us putting more resources on to the project at our own cost. In addition, since starting our business 25 years ago, we are the only consultancy to have consistently offered fees at risk against the delivery of results.

“Of the nine consultancies we considered, only Celerant committed to delivering the benefits.”

Chief Technical Officer, InBev

Closework®: We are able to commit to results because of Closework®, the name we give to our work ethic. We immerse ourselves in your operations, working side-by-side with your people, where the work gets done. We do more than help solve problems. We help your people understand that their everyday actions are vital to your company’s success. We motivate them to reach higher. We make good use of their experience, build their confidence, transfer skills and approaches and secure their buy-in – all essentials to make change a reality.

Although each project is unique there are some common themes in evidence in all Celerant projects:

• Companies run more efficiently because their workers connect as empowered individuals not components

• Departments in a company collaborate rather than compete - they gain clear methods to measure what they do and they can use their initiative to improve

• Functional areas want to perform better because they have a stake in the process of setting goals and they can look at what is being achieved.

• Individuals clearly see their role in the business and their personal impact on performance, so their work becomes more satisfying and they enjoy it more

• Everyone plays a part in setting targets, so they become a shared objective and a point of personal pride.

• Rivalry gives way to respect and teamwork• Improvements continue to be achieved long-term

because people feel central to the results they create.

* Kennedy Information, Global Survey, 2009 - 2012

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• Cederrroth• Church & Dwight• Coca Cola Amatil• Coca Cola Enterprises• CP Kelco• Dairy Farmers of America• Dalgety• De Banketgroep• Diana Ingredients• Elopak

• Sunny Delight• Swedish Match• Tetra Pak• US Foodservice• Vaasan Group• Vandemoortele• Villeroy & Boch• Windsor Foods• Yves Rocher• Zeelandia

• Estrella Maarud• Fazer• Georgia Pacific• Göteborgs Kex• Guerlain• Gumlink• Hartmann• Heineken• Henkel• Hilmar Cheese

• HKScan• Imperial Tobacco Group• InBev• Irish Dairy Board• Kellogg’s• Kimberly-Clark• Kraft Foods• Northern Foods• Orkla Borregaard• Otis Spunkmeyer

• Agros Nova• Arovit• Aryzta• Ayanda• Barry Callebaut• Bonduelle• Bunge• Cadbury• Campbell Soup Company• Cargill

• PepsiCo• Premier Foods• Procordia Food• Rieber & Søn• Saipol Lesieur• Santa Maria• SCA• Sidel• Spadel• Starbev

Track Record

celerantconsulting.com

Belgium • Brazil • Canada • Denmark •

Finland • France • Germany • Netherlands •

Norway • Oman • Sweden • United Arab Emirates •

United Kingdom • United States of America •

Operational Strategy and Implementation

• 15 offices in Americas, Europe & Middle East

• 600 employees globally

• Over 40 nationalities

• 24 languages spoken

• Over 1,500 projects in 57 countries

Most organizations do not fail due to a lack of talent or strategic vision but due to a lack of proper implementation of their strategy. The success of leading companies is 5% strategy and 95% implementing the strategy.”

Ian Clarkson, Founder, Celerant Consulting

© Celerant Consulting. The content of this presentation and/or documentation contains the proprietary and confidential information of Celerant Consulting Holdings Limited and / or of its relevant parent(s), subsidiary and/or subsidiaries (as applicable ‘Celerant’) and, as applicable, the proprietary and confidential information of third parties used by Celerant under an appropriate license therefrom. In consideration of Celerant making this information available to you, you agree to protect the confidentiality of the same as might reasonably be expected by Celerant. Without limitation, the information contained herein is the copyright of Celerant and may not be re-produced in whole or in part without the express prior permission of Celerant.