Customer SC Collaboration at Heineken
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1 Customer SC Collaboration at Heineken Marc Bekkers Bart Prins ESCF Eindhoven 8 April 2015 Heineken Global Supply Chain April 2015 Global Logistics October 20, 2014 HEINEKEN Supply Chain B.V.
2 HEINEKEN Proud, Independent, Responsible Global Brewer The world s most international brewer No 1 in Europe and No 2 in the world by consolidated volume Present in over 70 countries globally Brewing great beers, building great brands Committed to surprising and exciting consumers everywhere Long and proud history and heritage 2
3 HEINEKEN Our Values Enjoyment we bring enjoyment to life Respect for individuals, society and the planet Passion for quality 3
4 HEINEKEN is Unique 4
5 5
6 The Brewing Industry Top 10 Source: Canadean Annual Brand Database July 14 6
7 Industry Consolidation Source: Canadean Annual Brand Database July 14 7
8 Litres per Capita Consumption by Region Source: Canadean Global Beverage Forecast March
9 Consumption Volume Development Source: Canadean Global Beverage Forecast March
10 Supply Chain Management
11 Our Supply Chain Produces over 200 million hl Covers 196 plants, in 75 countries 126 majority owned beverage plants 21 own maltings & supply plants 50 managed minorities Has 65 breweries brewing Heineken Receive bottles and cans from 160 supply plants Analyses samples per year Serving beers per minute 1
12 Our organisation Global Supply Chain Global Logistics Warehousing Transport SC Planning SC Design Customer SC Main Capabilities Warehouse Excellence RPM Management Transport Excellence Green Logistics S&OP Demand Planning Supply Planning SC Network Design Freight Management Differentiated Service Strategy Customer Centric Excellence Key initiatives Warehouse Cost Modelling Master Plans Returnable Packaging Management Warehouse safety program Transport Cost Modelling Outsourcing tenders Green Distribution program S&OP foundation and Maturity Checks S&OP Next (advanced tooling and IBP) Location Allocation studies Distribution Footprints Freight Management Systems Customer Segmentation Cost-2-Serve Logistics Trade Terms Joined SC Planning Contact Strategy E2E Collaboration Global Customers 12
13 Customer Supply Chain Our Challenges Enablers Challenges 1 Customer at the center X functional working 13
14 Customer Supply Chain Our Approach 2. Customer SC Profitability Cost 2 Serve & Logistics Trade Terms 3. Customer Centricity Local Customer Collaboration: Availability (OSA) Multi Channel: On trade Traditional Modern trade o E-Com (B2B) o Convenience o Discounters Distributors 4. Global Customers Contact Strategy & E2E Collaboration Performance Management 1. Customer Service Excellence Order2Cash efficiency E2E Internal Collaboration Optimal RTM Ordering 14
15 Breaking down the theme of today. Mastering (the challenges of) the omni-channel supply chain as Global Supply Chain in HEINEKEN Where do we need to master? What will our challenges be? Supply Chain 2020 How do we commonly define our supply chains / channels? SCOR / M4SC Roadmap How do will fill the gaps? Capability 15
16 Supply Chain 2020 program Company strategy Market trends & insights Customer & consumer needs External views Regions workshops Where do we want to go? How ready are we? Structure & tools E2E Process models SC definitions Operating models Fit-gap analysis SWOT analysis Channels! Current Supply Chain capabilities Global 16
17 Adopting the SCOR & M4SC model SCOR - Supply Chain Operations Reference Model cross-industry process-reference model M4SC - Supply Chain Management Reference Model management & focus of supply chain resources They can be used to segment & organize the business into value chains, starting from two angles: From strategy forward From customers backward 17
18 Application of the M4SC approach to guide development Business Strategy Drives Segment business into supply chains, determine performance Feedback 1 Supply Chain Strategy Drives Feedback 2 Supply Chain Network Drives Feedback 3 Supply Chain Processes Drives Feedback 4 Supply Chain Resources 18
19 Building our E2E operating model for the future We have succeeded to structure a requirements led, capabilities enabled operating model Segment business into supply chains, determine performance Segment business into value chains & channels Determine performance KPI s and related targets Model the E2E business processes 1. E2E Planning (Strategic & Tactical) Manage processes towards strategic network goals 2. Upstream Supply Chain 3. Downstream Supply Chains Suppliers Supplier Raw Materials Supplier (internal & external) Ingredients & Packaging Materials Inbound Warehouses Heineken Production Beverage Production Information Flows Packaging Primary Warehouses Heineken Fulfillment Secondary Warehouses Physical flows 4. Reverse Supply Chains Customer (internal & external) Point of Sale Customers Customer Consumers Continuously align resources to meet process goals 6. E2E Supply Chain Enabling Processes 5. Cross Border Trade Financial flows Continuously improve through capability development & TPM 19
20 Example: Upstream Supply Chain Horeca & Traditional Trade Modern Trade Events Direct to Consumer Reverse 21
21 Example: Downstream Channels Downstream HoReCa & Traditional Trade Downstream Modern Trade Upstream Downstream Events Downstream Direct Consumers Cross Border Trade Reverse RPM Reverse Finished Prod 22
22 Example: requirements & focus per channel Typical Horeca and Traditional Trade Supply Chain - Stable/Decline Definition Horeca outlet point of sales (Hotel, Restaurant, Café) Includes the following customer types: Company Canteens, Railway Services, Airline Caterers Includes Traditional Trade (includes individual entrepreneurs e.g. independent retailers such as Ma and Pa shops, simple Kiosks) Through own distribution or 3 rd party distribution (Cash & Carry and wholesale) All beverage product types Owned & 3 rd party brands Competitive Performance Attributes: Key Performance Indicators: Required Performance: requirements (1) Reliability. % = Advantage Comments Responsiveness/Agility. Days Days = Parity Cost... % = Superior Asset Management. Days % = Parity advantage supply reliability (customer service) to meet/exceed expectations. Responsiveness at parity to qualify for customer orders. Asset Management at parity: 23
23 Example: practical application Supporting an OpCo where to focus improvements per channel to meet future Supply Chain requirements and fill the gaps 24
24 Supply Chain Capability development Example Customer Collaboration Channel: Modern-Trade Processes & Tasks Structure Governance & Performance Information & Systems People & Competencies Rewards & Recognition Capabilities are centrally developed, but co-created with leading OpCos Strong relationship with channels during development and deployment OpCos can sign up to implement capabilities Workshops, training, tools, or full implementation of systems and processes 25
25 Conclusion Ambition We aim to become more efficient in getting better: define future needs, develop collectively, apply where necessary, implement efficiently Enablers The combination of Capabilities and SCOR Roadmap / M4SC has proven to be a great methodology to identify and fill gaps, providing a congruent development and deployment approach Results A future requirements led, capabilities enabled operating model, consisting of Commonly defined processes with governance Channels distinguished via the M4SC approach Programs for Capability development and deployment Driving strategic action plans 26
26 Questions?
27 28
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