Creating Market Advantage with Collaborative Planning

Expand your organization’s capability to capture growth

ContentsCollaborative Planning is Challenged Page 3

A Better Way Exists Page 4

Building Capability as a Competitive Advantage Pages 5-6

Best-in-Class Collaborative Planning Principles Pages 7

Customer-Back Mindset Page 8

Category/Shopper Focused Page 9

Cross-Functional Connectivity Page 10

Partnership Evolution Page 11

Building a Collaborative Planning Capability Page 12

2 Creating Market Advantage with Collaborative Planning

Collaborative Planning is Challenged

3 Creating Market Advantage with Collaborative Planning

CPGs and Retailers have a common challenge – finding growth in a rapidly-evolving marketplace where consumers have plenty of options to satisfy their shifting demands. Existing Joint Business Planning routines should be valuable, solution-creating exchanges to solve complicated problems.

Instead, all too often both parties come away unsatisfied with the effectiveness of their current JBP efforts. In fact, a recent study found that only 11.3% of suppliers claim to have a ‘highly effective’ planning process.

CPGs comment on their tactical, highly transactional Retailer relationships that limit real value creation. Too often price negotiations are ad hoc requests for investment that get in the way of stewarding joint strategic priorities.

Likewise, Retailers are frequently challenged to find value in CPGs’ contributions to Joint Business Planning that focus heavily on brand-focused selling and short-term initiatives that don’t grow the category.

How would you describe the current state of joint business planning at your company?

DID YOU KNOW?

Only 11.3%

of Suppliers Claim to have ‘Highly Effective’ joint business planning.

~ Path to Purchase IQ magazine, January 2020.

Highly effective

Good, but plenty of room for improvement

Mediocre, but making progress

Still struggling to make it happen

11.3%

8.8%

33.8%

46.3%

~ Path to Purchase IQ magazine, January 2020.

A Better Way Exists

Visionary CPGs understand that in order to create true joint value exchange, they must shift from a rush to brand-centric solution development, to creation of joint strategies that are customer-centric, based on a deep understanding of their customer’s long-term objectives and their shopper needs.

For example, one major CPG organization implemented a refreshed, reoriented, and more customer-centric strategic planning process that engaged their customers differently. The joint solutions that sprang from this orientation created significant market value for both parties, with measurable results that included:

• Net sales growth of +6% CAGR

• Growth in share gap vs. the competition by 7 points

• Gained #1 position among all suppliers in a leading customer survey

4 Creating Market Advantage with Collaborative Planning

Jim Dinkins~President, Coca-Cola North America (Board & Wall Street presentation)

“When you’re growing faster than your customer, you’re accretive to their business. The way that we do that in Coke North America has art and science, and here’s the science. The science is we have a collaborative business planning process that we use with customers that really digs in deep with them to understand their objectives, understand their strategies, developing joint plans often beyond beverages.”

Building Capability as a Competitive Advantage

Change can be difficult to create and implement, b u t even harder to sustain. Companies that are adept at creating and sustaining important change approach it as an organizational capability.

Organizational capability and individual competencies are related, but separate ideas. While an individual or group of individuals, can build critical skills, or competencies, to enable a change initiative, it takes a common, organization-wide approach, or capability, to achieve lasting change. The reason being – individuals move, change jobs and sometimes lose sight of previously set priorities.

Building capability, like a new Collaborative Business Planning process, is best approached as a holistic organizational capability that comprehensively addresses what is needed to sustain results, vs. pursuing solutions selectively or in a narrow way.

For example, many CPGs that want to overhaul their collaborative business planning approach, limit their efforts to process improvements, training courses and tool development. These efforts are often short-lived because they fail to synchronize all aspects of the organization and can sometimes create a negative impact.

5 Creating Market Advantage with Collaborative Planning

Approaching collaborative business planning as a holistic organizational capability, ensures the best leverage of an organization’s resources. Over the long term this hard work creates a more agile organization, better equipped to embrace change. In the short term it delivers real, tangible benefits by being better able to identify and capture growth opportunities.

By contrast, building lasting organization capability requires a holistic set of solutions that address not only the WORK (or processes that teams will use to approach collaborative planning differently), but also examine the PEOPLE requirements (individual competencies, roles and structure) to do the work.

Building Capability as a Competitive Advantage

6 Creating Market Advantage with Collaborative Planning

Organizations also must consider the INSIGHTS that will be needed to power a different approach to joint strategy development. Lastly, the TOOLS teams need to create change and consistently measure value creation are critical components of capability development.

Best-in-Class Collaborative Planning Principles

A collaborative planningcapability begins with a common set of tenets that have proven to drive strong multi-year joint plans with retailers. The next four sections outline each tenet along with a best practice checklist high-lighting critical characteristics for this new capability.

7 Creating Market Advantage with Collaborative Planning

Customer-Back MindsetAchieve mutual growth aligned to customer’s strategies not brand-centric opportunities.

Category/Shopper FocusedEstablish shopper insights led strategies to guide strategic joint priorities.

Cross-Functional ConnectivityAlign & optimize resources from Sales, Marketing, Trade, Supply Chain, E-comm & Cat Man for accelerated value creation.

Partnership EvolutionMove transactional relationships to strategic partnerships and enable strong sell-in & productive negotiations.

Customer-Back Mindset

A best practice Collaborative Planning system should strive for mutual growth informed by your customer’s strategies and shopper needs. Any CPG can start with brand first, so shifting to joint wins, under- standing the business of your customer, their pressures, and what they are trying to accomplish, al lows you to establish joint goals that benefit both sides. With this understanding the category comes through relative to the retailer’s total business. These types of discussions are sometimes unfamiliar and uncomfortable for CPGs, but frequently bring about a powerful shift in the relationship dynamic. By asking questions in these areas, CPGs can build new levels of trust and influence.

8 Creating Market Advantage with Collaborative Planning

Begin with customer’s priority strategies, as a base for collaboration and development of category growth strategies.

GOAL:

CAPABILITY CHECKLISTCustomer teams...

Understand what is keeping their Customer’s CEO up at night.Articulate their retailer’s highest priorities for driving growth and how success is measured.Understand the role of their category to the retailer’s total business.Have new dialogue to confirm retailer total business and category priorities and metrics.

TO (STRATEGIC): • Customer-growth priorities• Base strategies on triple win for

retailer, shopper and brand• Business advisor / collaborator

FROM (TRANSACTIONAL): • Brand-business priorities• Sell via general product

benefits and price• Lack of trust / limited influence

~ Sales VP & GM

“Our planning capability has led to new levels of engagement with customers, including the first ever JBP with Walmart… We finally got a seat at the table to have a strategic dialog about future plans...”

Category/Shopper Focused

To develop multi-year category strategies, it is important to leverage category market data (forecast) to identify the key perfor-mance gaps and quantify the size of prize. Through this discipline, strategies are aimed to capture the biggest joint gain in the plan.

Once strategies are selected, activations are best informed by shopper insights specific to the retailer. This is important because shoppers use different retailers for different needs that shift more quickly than we have experienced in the past.

9 Creating Market Advantage with Collaborative Planning

CAPABILITY CHECKLIST

Customer teams are skilled at creating tailored insight summaries (vs. mountains of data).Customer teams have clear objectives for insight sharing and the value they hope to create.Customer teams understand how to use the most valuable insight sources they have access to – that their retailers don’t.

Apply value-added insights that guide category growth specific to the retailer.

GOAL:

The ability to translate data into meaningful and actionable insights is an essential component of Collaborative Planning. A strong Collaborative Planning capability will inform when and how to leverage insights at various points throughout the planning process to identify opportunities and define strategies and tactics.

~ VP/GM National Retailer

“Best two days ever spent with a vendor partner! Best thought leadership we’ve seen in the category.”

Successful collaborative planning establishes a new discipline in the application of insights to identify future opportunities, create strategies, and design solutions that capture growth.

TO (STRATEGIC): • Meaningful insights • Retailer shopper insights• CPG / Retailer insight collaboration

that expands value creation

FROM (TRANSACTIONAL): • Lots of data• Brand consumer facts• Insights resources

behind the scenes

“The application of insights with customers was a game changer. The insights group had to get more effective in how they supported the teams, and partner with cat man. It was phenomenal to see our potential come to life.”

TO (STRATEGIC): • Clarity and optimization

of roles / resources• Cross-functional participation

and buy-in to plan• More holistic engagement

Cross-Functional Connectivity

Creating multi-year strategies that solve complicated problems cannot be performed within an isolated department. Good Collaborative Planning systems frequently serve as a bridge between brand marketing and sales, to strengthen alignment and insight sharing. To drive lasting results with customers, successful partnerships create inf luence outside of sales by bringing expertise from Brand, eCommerce, Supply Chain, R&D, Category Management, Insights/Research, Revenue Management, Customer Marketing and more.

10 Creating Market Advantage with Collaborative Planning

Align and optimize cross-functional resources for accelerated value creation.

GOAL:

CAPABILITY CHECKLIST

Key cross-functional contributors are brought into joint planning sessions early and often.Resources are proactively provided to teams throughout planning cycle.Investments and resources are realigned or eliminated that are found to be redundant or unnecessary.

A well-designed Collaborative Planning system boosts the effectiveness and efficiency of cross-functional contributions. Efficiencies are created when functions have greater clarity on their individual roles and points of interaction designed to create value for customers.

FROM (TRANSACTIONAL): • Gaps in critical resources• Silo oriented contributions• Not leveraging the total

business (HQ)

~ VP, Shopper & Category Insights

Partnership Evolution

Achieving this level of Partnership Evolution and commitment to long range goals allows for ‘bigger thinking,’ and joint risk taking. When trust levels are increased, and value creation is tangible, joint plans clearly define the priority initiatives that are needed to overcome challenges. This enables both sides to remain agile in their capture of value in a changing business climate.

11 Creating Market Advantage with Collaborative Planning

Move transactional relationships to strategic partnerships that enable strong sell-in and productive negotiations.

GOAL:

~ VP, Sales

“In all my years with this customer, we have never been allocated the new opportunities we now have as a result of this process”

CAPABILITY CHECKLIST

Set of common, long-term growth priorities to guide investments.

Ability to course correct and manage normal conflict through reflection on joint goals.

Collaborative Planning is an ongoing commitmentto mutual growth, beginning with a common vision for the future. While each partner has their own goals, from short-term performance metrics to broader strategic imperatives driven by distinct business models, a strong Collaborative Planning discipline helps manufacturers and retailers build a common set of long-term growth priorities and definition of winning.

TO (STRATEGIC): • Strong influence at all levels• Multi-year joint priorities• Strategic category

thought Leader

FROM (TRANSACTIONAL): • Interactions limited to buyer• Tactical / Short-term Planning• Limited category foresight

Building a Collaborative Planning Capability

When done well, a strong Collaborative Planning capability allows organizations to capture higher goals through more aggressive strategies. More importantly, it builds broadened competencies with the people in your organization to ensure you can adapt and change to meet rapidly evolving market needs.

12 Creating Market Advantage with Collaborative Planning

Creating a Collaborative Planning Capability like this is accomplished by following a simple process:

START with a vision that defines the ideal future state for the capability.

IDENTIFY industry best practices.

DEFINE the Collaborative Planning process steps.

ALIGN roles & responsibilities (across headquarters and sales team functions).

ACQUIRE the necessary tools & insights.

DEFINE change management routines to ensure sustainability.

Companies that are best-in-class in Collaborative Planning have created an organizational capability that transforms the way they identify and pursue goals with customers, and as a result creates stronger, more impactful relationships.

“Capre Group transformed the planning and sales process for the entire company. The impactful process and engaged training and coaching helped our organization become partners with our retailers and drive robust category growth. I would highly recommend Capre Group to any supplier looking for the category leadership voice.”

~ Chief Customer Officer CPG Company

13 The Category Leadership Imperative

Caprē Group I 1117 Perimeter Center West I Suite N411 I Atlanta, GA 30338 I capregroup.com

Unlock Success with Caprē Group

The views expressed in this work represent the research and expertise of Caprē Group, Inc. Any quotes used with permission. No confidential client information was used to create this work.

is ready to partner with you to bring best-in-class Collaborative Planning capabilities to your organi-zation. Our industry-leading approach (IMPACT™) has helped hundreds of customer teams across a wide variety of both B2C and B2B customers (for suppliers, customers and retailers, across numerous industries, categories and coun-tries). We drive immediate impact though our proprietary coaching model, where we work directly with your teams to build their capability and realize greater market value.

Caprē Group will work with you to apply our deep in-dustry expertise to customize our best-practice approach to the individual goals of your organization. The frame-works, tools, and methodologies create scalability across teams and build processes and routines that are quickly embedded into your company’s DNA. And because our experts are embedded with customer teams from design stages all the way through training and implementation, we ensure the new capability takes root and evolves in real-time to drive immediate impact on your business.

DID YOU KNOW?Return on investment in training increases

when supported with coaching.

~ The International Personal Management Association

from 22% to 88% +3x

To start the Collaborative Planning conversation, please contact

info@capregroup.com. You can also reach us by phone

at 678.443.2280.

13 Creating Market Advantage with Collaborative Planning