Joint Business Plan NESTLE and TESCO in Poland - …

1 Joint Business PlanNESTLE and TESCO in PolandNESTLE and TESCO in PolandJanusz Selwa TESCO Polska ( Poland )Michal Rubaszko NESTLE Polska ( Poland ) TESCO operates currently inTESCO GloballyTESCO in PolandTESCO in PolandTESCO is a thirdplayer on Polish retail market and first HM chain in Poland . HYPERMARKETSDDS1K + SAVIAAreaNo. of sku No. of outlets 4 12 k m22 - 3 k m21 k format structureNESTLE in PolandNESTLE in PolandConfectioneryBeveragesCulinaryInfa nt NutritionLodyWatersCerealsFoodServicesPe t FoodWhat is Joint Business Business 5 years ago, Nestl 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:It all started with the UKWhat is Joint Business planning ?

2 What is Joint Business planning ? A fragmented Nestl approach to the TESCO Business No endorsement by Senior Management to the plans No issue escalation processWhat is Joint Business planning ?What is Joint Business planning ? Business Unit Sales networkJBP 2= JBP1 + Key Initiatives + 3=JBP2 + focus on key categories + + - TESCO attempted to mirror Wal-Mart Suppliers Management Model Request to form TeamsSales networkFragmented ApproachEasy to Attack Difficult to do BusinessDEATH SPIRALL isten, Acknowledge, Explore and RespondUnderstood what was Really,Really ImportantTOP Management Driven JBP 1 It worked + Flexibility on How we Delivered Shared What was Important to UsINTERVENTION2002/32004/52005/62006/720 03/42001/2 What is Joint Business planning ?

3 What is Joint Business planning ?Trade TermsActivity PlanTraditional negotiationsAnnual NegotiationsTraditional negotiationsJointly Aligned Shopper Based PlanNegotiate the gapsJBP incl. TTJBP processSharing objectivesWhat is Joint Business planning ?What is Joint Business planning ? Greater listening and understanding on both sides Increased trustFundamental changes Increased trust Increased transparency and visibility of Business Shared more and aligned plans together Joint ownership responsibility / mutual goalsEach Category Produces and Agrees a Business plan +111%+21%+174%+44%% Profits (Mio)+30%+30%+106%+68%% Turnover (Mio)2009200820072006+111%+21%+174%+44%% Profits (Mio)+30%+30%+106%+68%% Turnover (Mio)2009200820072006 plan ProgramOverall KPI TargetYTD AchievedWhat Needs To Be DoneBy WhoWhen Does it Need to be Done ByQ1 Q2Q3Q4 Next StepsI Can Get What I Want 150m in 3 years 33m category growth (2006 YTD)

4 Petcare step change 3 year growth plan2006/945% market share within 12wks of launchWIPF irst for innovation:- Format plan for ALL NPD, NPD highlighted as a % in JBP, Prioritised NPD based on Size of Prize 2006/7 Drive 1m incremental sales at RSVS ales Test v Control B:+ :+ On-Shelf Availability through better in-store support, using "Always Available"2006/7 Provide category expertise to support every range review for every TESCO formatProvide best-in-class category insight for every TESCO Lifetime LoyaltyJointly agreed 12 month healthier plan worth TBCm RSVT esco & NESTLE to agree a plan for "Helping you be healthier everyday" with significant focus on selected categories2006/7We Try To Get It Right First Time100%75%No Invoicing Queries - All invoices processed accurately and paid on time2006/7100%WIPNew products setup on system within 12wks of launch2006/7We Deliver Consistently Every DayWinning the Treble.

5 Promotions, NPI, Petcare growthJointly agree best-in-class processes for the above2006/7 Focus on Colloborative planning :1] Reduce Failed To Arrive (FTAs) (less than 1%)2] Seasonality3] Base Sales2006/7We Make Our Jobs Easier to DoRoll-out across all NESTLE categoriesVendor Managed Inventory (VMI)2007/895% of range in and implement innovative RRP and MU solutions where it makes people's jobs easier2006/7We Always Save Time and MoneyPhased roll-out across all Nestl categoriesEfficient Checking - To enable faster vehicle turnaround at TESCO Depots2006/7 Better, Simpler, CheaperBe Responsible, Fair and HonestTBCTBCTBCBe a Good NeighbourTBCTBCTBCYTD Range: - TripThe Way We Work TogetherCUSTOMEROPERATIONSCOMMUNITYPlan ProgramOverall KPI TargetYTD AchievedWhat Needs To Be DoneBy WhoWhen Does it Need to be Done ByQ1 Q2Q3Q4 Next StepsI Can Get What I Want 150m in 3 years 33m category growth (2006 YTD)Petcare step change 3 year growth plan2006/945% market share within 12wks of launchWIPF irst for innovation:- Format plan for ALL NPD, NPD highlighted as a % in JBP, Prioritised NPD based on Size of Prize 2006/7 Drive 1m incremental sales at RSVS ales Test v Control B:+.

6 + On-Shelf Availability through better in-store support, using "Always Available"2006/7 Provide category expertise to support every range review for every TESCO formatProvide best-in-class category insight for every TESCO Lifetime LoyaltyJointly agreed 12 month healthier plan worth TBCm RSVT esco & NESTLE to agree a plan for "Helping you be healthier everyday" with significant focus on selected categories2006/7We Try To Get It Right First Time100%75%No Invoicing Queries - All invoices processed accurately and paid on time2006/7100%WIPNew products setup on system within 12wks of launch2006/7We Deliver Consistently Every DayWinning the Treble: Promotions, NPI, Petcare growthJointly agree best-in-class processes for the above2006/7 Focus on Colloborative planning :1] Reduce Failed To Arrive (FTAs) (less than 1%)2] Seasonality3] Base Sales2006/7We Make Our Jobs Easier to DoRoll-out across all NESTLE categoriesVendor Managed Inventory (VMI)2007/895% of range in and implement innovative RRP and MU solutions where it makes people's jobs easier2006/7We Always Save Time and MoneyPhased roll-out across all Nestl categoriesEfficient Checking - To enable faster vehicle turnaround at TESCO Depots2006/7 Better, Simpler, CheaperBe Responsible, Fair and HonestTBCTBCTBCBe a Good NeighbourTBCTBCTBCYTD Range.

7 - TripThe Way We Work TogetherCUSTOMEROPERATIONSCOMMUNITYWhat is Joint Business planning ?What is Joint Business planning ? 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 processTARGETSREVIEW BRAG Business PLAN95%95%95%91%Service Level+ + Margin+111%+21%+174%+44%% Growth95%95%95%91%Service Level+ + Margin+111%+21%+174%+44%% GrowthBe a Good NeighbourGrow Sales xxxm, + categories' sales through good Joint Business PlansBuild a Joint Business plan for every Format2006/7 Maximise Profit xxxm, +xx%xx%, + categories' profit and margin through good Joint Business Plans2006/7An agreed Induction plan used by both partiesDevelop a Joint Induction plan for all NESTLE - TESCO employees (including Helping Hands / TWIST)

8 TBCT esco to share with NESTLE all relevant customer plansProvide visibility of TESCO 's priorities through the Customer Plans2006/7 Rated as Top 3 supplier on use of TescoLink by TescoBest-in-Class Application of TescoLink2006/7 Developing the Best PeopleThe Way We Work TogetherPEOPLEFINANCECOMMUNITYBe a Good NeighbourGrow Sales xxxm, + categories' sales through good Joint Business PlansBuild a Joint Business plan for every Format2006/7 Maximise Profit xxxm, +xx%xx%, + categories' profit and margin through good Joint Business Plans2006/7An agreed Induction plan used by both partiesDevelop a Joint Induction plan for all NESTLE - TESCO employees (including Helping Hands / TWIST)TBCT esco to share with NESTLE all relevant customer plansProvide visibility of TESCO 's priorities through the Customer Plans2006/7 Rated as Top 3 supplier on use of TescoLink by TescoBest-in-Class Application of TescoLink2006/7 Developing the Best PeopleThe Way We Work TogetherPEOPLEFINANCECOMMUNITYWhat is Joint Business planning ?

9 What 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 needsand TESCO /Nestl opportunities We commercialise the planto work for Nestl and TESCO using all levers innovation, distribution, price, promotion, display, front/back distribution, price, promotion, display, front/back 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 correctto get achieve goalsWhat is Joint Business planning ?What is Joint Business planning ?1. Share plans, ambitions & insights3. Write the Business plan & Agree Jointly4.

10 Execute the Plan0. Identify Point of DepartureCategory plan icl. 3-year vision (Nestl )Customer Strategy ( TESCO )Shopper Insight (Nestl / TESCO )5. Review & Course Correct2. Identify the mutual opportunitiesDODOPLANPLANDODOPLANPLANWha t is Joint Business planning ?What is Joint Business planning ?REVIEWREVIEWC ourse CorrectCourse CorrectREVIEWREVIEWC ourse CorrectCourse CorrectEnsuring the plan stays on courseand adapting to changing circumstances is a fundamental part of the processPlan ProgramOverall KPI TargetYTD AchievedWhat Needs To Be DoneBy WhoWhen Does it Need to be Done ByQ1 Q2Q3Q4 Next StepsI Can Get What I Want 150m in 3 years 33m category growth (2006 YTD)Petcare step change 3 year growth plan2006/945% market share within 12wks of launchWIPF irst for innovation.