Transcription
6 June 20051
DisclaimerDisclaimerThis presentation contains forward looking statementswhich reflect Management’s current views andestimates. The forward looking statements involvecertain risks and uncertainties that could cause actualresults to differ materially from those contained in theforward looking statements. Potential risks anduncertainties include such factors as general economicconditions, foreign exchange fluctuations, competitiveproduct and pricing pressures and regulatorydevelopments.6 June 20052
Why GLOBE?To unlock Nestlé's potential by: Leveraging our size as a strength in a rapidly changingenvironment Uniting and aligning us on the inside to be more globallycompetitive on the outside Enabling Nestlé to manage complexity with operationalefficiency6 June 20053
GLOBE - Program Objectives1236 June 2005Implementation of harmonized Nestlé BusinessExcellence Best PracticesImplementation of Data Standards and Data Management"Managing Data as a Corporate Asset"Implementation of standardized information systemsand technology4
Qin Dynasty Objectives1236 June 2005Implementation of a standardized written language(Mandarin)Implementation of a standardized currencyImplementation of a standardized length for theaxle of an ox cart5
2005 GLOBE Program Objectives All Markets to implement agreed best practices All Markets to implement data standards/datamanagement Selected Markets to implement the GLOBE Systems(cumulative 30% of F&B sales by end 2005) Total GLOBE/IS/IT annual costs not to exceed 1.9% ofF&B Sales All activities to be completed within agreed scope,timelines and qualityNote: Benefits tracked through the Nestlé Group Initiatives(Operation Excellence 2007 and FitNes)6 June 20056
Nestlé Business Excellence Based upon tested and proven best practices fromNestlé's markets Over 800 projects in progress worldwide Accelerates benefits and prepares market for smoothsystem implementation Not dependent upon GLOBE SAP systems(uses no systems or existing market systems)6 June 20057
The Nestlé Best Practice Libraryhttp://intranet.nestle.com/bpmBusiness ExcellenceReportingThe Best Practice LibraryTrack Market ProgressThe WHYThe WHATThe HOW 860 ImplementationProjects 45 Solution Sets 1067 Best PracticesBPM Networks 4 Networks 3000 SubscribersShare Implementation Experience6 June 20058
Data Standards/ Data Management Over 230 global data standards defined Markets have cleansed data and registered inter marketsupply products into the Master Data Repository as ofend of 2003 Markets are implementing data management bestpractices and realizing early benefits Improved quality of customer addresses andinvoices for Nestlé Waters NA Home and Officebusiness ( 300,000 savings per annum)6 June 20059
Master Data Alignment Improves IntermarketSupply Operations and Lowers Net Working CapitalNordic (3 Receivers)885800 Kit Kat ChunkyUK40722 Kit Kat Chunky SingleDE3571 Kit Kat ChunkyNL45290 KITKAT CHUNKY SINGLE (24 x 55gr)BE668700 KITKAT CHUNKY SINGLECH5775 Kit Kat ChunkyFR01244.05.02 KITKAT 24X55g Chunky (47103)GR29926 Kit Kat Chunky SingleSP03017 KIT KAT CHUNKY 24X55gPT06048 Kit Kat Chunky 24x55g6 June 2005IT2688 Kit Kat Chunky Single10
Data Cleansing Summary: 2003 Over one-half of key data objects were "garbage"6 June 200511
Information Systems/Information Technology GLOBE Template Version 1.5 (new functionality and newtechnology platform) has been created Global infrastructure (hardware and network) is in place GLOBE "three tier" support organization fully operational: 6 June 2005Business Technology Center (Vevey)GLOBE Centers (and Central Support Center)Local GLOBE Organizations12
"Live" Markets - June 2005Sixteen markets (Switzerland, Chile/Peru/Bolivia,Malaysia/Singapore, Thailand, Poland, Indonesia, Canada,Philippines, NPPE UK, South Africa, Austria, Pakistan, Russia,Germany, NW HOD UK, South Asia plus the Center and R&DSwitzerland) have implemented all three objectives (Processes,Data and Systems) 18 countries Approx. CHF 16.7 billion in sales Approx. 52,000 users 202 factories (102 Nestlé, 100 Co-Packers) 225 distribution centers 174 sales offices6 June 200513
Implementation Plan - as of June 2005200220032004200520062007Business Excellence/ Best Practice ImplementationData Standards/Data Management ImplementationGLOBE System ImplementationVersion 1.0PilotsSwitzerland Chile/Peru/Bolivia Malaysia/Singapore Version 1.0Roll-OutVersion 1.5PilotsVersion 1.5Roll-Out, incl.Poland Thailand Indonesia Nestlé Purina UK Philippines Canada Russia Germany UK (incl. NWHOD) India Mexico OceaniaApprox. Cum % F&B Sales withGLOBE processes, data and systems6 June 200530%14Version 1.5Roll-Out, incl.Version 1.5Roll-Out, incl.France Spain Italy Japan Brazil USA Korea Middle East Central America 80%90%
2005 Major GLOBE "Go-Lives" South Africa (completed) India (completed) Austria (completed) Nestlé Waters HOD UK(completed) Pakistan (completed) Mexico The Center (completed) UK/Ireland Russia (completed) Oceania Germany (completed)6 June 200515
RIG Performance 2004 in GLOBE MarketsGo-Live6 June 2005Market2004 RIG2002Malaysia/Singapore 3.2%2002Bolivia- 9.0%2002Peru 5.9%2002Chile 3.0%2002Switzerland- 4.3%2003Thailand 6.1%2003Poland 4.1%2004Indonesia2004Canada- 1.5%2004Philippines 5.5%2004Nestlé Purina UK 3.5% 11.7%16
Key Issues in "Live" Markets Decision Support System Management Trade Promotion Management6 June 200517
Keys to a Successful GLOBE SystemsImplementation Early implementation of best practices Close attention paid to data Focus on testing and training Business Ownership Best People Attitude6 June 200518
GLOBE/IS/IT EBITA Impact2.4%GLOBE/IS/IT EBITA Impact2.2%Target2.0%1.8%% Sales1.6%1.4%1.2%1.0%0.8%0.6%0.4%0.2%0.0%19951996 19971998199920002001 2002Targets 2005 and onwards for F&B, excluding Dreyer's and BPW6 June 2005192003200420052006 20072008
GLOBE Enabled Benefits:Operation Excellence 2007 Oceania: "Purchasing": Implementation of best practicesand "P-cards" has enabled annualized savings of AUD 21million in 2004 and projected AUD 20 million in 2005 Russia: "Specification Management": Common rawmaterials have been identified across 6 factories resulting ina 60% reduction in specifications (181 to 70) France/Nestlé Waters: "Finished Product Tracking":Loading customer claims reduced by 90%6 June 200520
GLOBE Enabled Benefits:FitNes Former Andean Region (Chile/Peru/Bolivia): "AccountingShared Services": Consolidation of administration improvesquality of data/visibility and saves over US 500,000 perannum South East Africa: "Accelerated Close": Year end bookclosing reduced from 14 to 5 days, reduced cost(CHF 1 million), better management information Greece: "Customer Service": Centralized customer serviceimproves responsiveness and reduces headcount (from 23to 11)6 June 200521
GLOBE Enabled Benefits:Profitable Growth Israel: "Integrated Commercial Planning: Nescafé":Implementation has increased market share from 37% to41%; total trade spend (TTS) has been reduced by 2.5%during first quarter 2005 France: "Outlet classification": 25% reduction in databasemanagement time, 66% reduction in data; new businessopportunities identified Turkey: "Order to Cash": Best practices increasedcustomer service levels (6 point increase), improvedresolution time and customer/channel focus6 June 200522
GLOBE Enabled Benefits:Reduced Net Working Capital Chile: "Customer Service": Improved collection processyielded over US 200,000 in 2005 Mexico: "Accounts Receivable": More accurate and realtime customer information; reduction in credit daysoutstanding will realize at least US 3.5 million in 2005 Waters in North America and Europe: "IntermarketSupply": reduced stocks and write-offs (EUR 1.3 million in2002/2003)6 June 200523
Nestlé's Future with GLOBE Speed to share and implement new best practices Provide better information for better decisions Enable shared services Facilitate organizational change Allow for focus on generating demand activities6 June 200524
Summary GLOBE is on time GLOBE is on budget GLOBE works GLOBE enables benefits (with and without systems) GLOBE has become Nestlé's way to do businessGLOBE enables Nestlé to manage complexity withoperational efficiency6 June 200525
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Oceania: "Purchasing": Implementation of best practices and "P-cards" has enabled annualized savings of AUD 21 million in 2004 and projected AUD 20 million in 2005 Russia: "Specification Management": Common raw materials have been identified across 6 factories resulting in a 60% reduction in specifications (181 to 70)
