Julian Serna, Latin America Manager Supply & Demand Planning Evolución de la planeación de demanda y abastecimiento en la industria de consumo masivo Julian Serna, Latin America Manager Supply & Demand Planning August 4 – 5, 2015

Agenda Company Demand & Supply Planning Evolution Implementation Resources People Processes / Culture Systems Implementation The future

Company History

Spin off (Effective July 2015)

Latin America Organization Colombia Hub Mexico Hub Chile Hub

Supply & Demand Planning Evolution Year 2009 Currently Transactional Silos Individual Daily operation Strategy Processes Team work Synergies Leadership

Transition / Development Processes / Culture People Systems Resources Implementation / Execution

Working Capital Reduction Resources ¿Why is important the demand planning? Sales Increasing Availability, Lead times, Coverage, Service increasing Cost Reduction Purchases, Transport & Distribution Working Capital Reduction Inventory Management Invest in Demand Planning will generate high benefits ($) for the organization

People Create a strong demand planning team in each market Leadership / Willing to challenge Knowledge sharing culture Team work

People Training (APICS, IBF, CSCMP) Cross Fertilization Retention programs (awards, regional / global exposure) Team development and succession plan

People “My definition of success is that is not about wealth, fame or power, is about how many shinning eyes I have around me” Benjamin Zander

Processes / Culture Obtain support from the senior management Understand where we are > KPIs (LFR, FE, DII, SLOBS) Include the shared metrics into the commercial team for performance purposes Close communication with the sourcing locations

2. New products, promos, commercial actions and sampling review Processes / Culture Establish / align the mission: Maximize the service level having the product available in the moment, quantity and mix needed while minimizing the inventory levels and total logistics cost Harmonize the S&OP process using the best practices across all markets 1. Data Generation 2. New products, promos, commercial actions and sampling review 3. Forecast Consensus 4. Finance & SC Review 5. SOP Meeting

Planning Process (General Overview)

Systems The systems solve everything FALSE (Garbage in – Garbage out) Need to have a strong and harmonized process before implementing systems Sometimes is better to implement quick solutions than a big system that requires more time and effort Focus in the key processes FALSE (Garbage in – Garbage out)

Implementation / Best practices Line Fill Rate Forecast Error Days in Inventory Slobs Improve communication of codes changes Statistical forecast is key for the process Weekly Planning Sku rationalization Direct relation with the forecast error Strong S&OP process to receive Business trading norms agreement with sourcing Special focus in new products / promo planning Need a deep understanding of customer expectations ABC Classification / focus in key skus Safety stock definition by sku Heads up in S&OP process Statistical safety stock to support demand variation Challenge the numbers provided by Commercial Sales cycle understanding Track and follow action plans (3 months max)

Implementation / Best practices Focus in execution! High commitment of all the team Continuos feedback to adjust the process Strong leadership

Implementation “Los partidos no los ganan los que mejor juegan sino los que estan mas seguros de lo que hacen” Diego Simeone

The Future Source: Supply Chain Council

The Gartner top 25 Supply Chain

The Gartner top 25 Supply Chain The notable trends according with the Gartner Supply Chain Top 25 2014: Deeper contextual understanding of customers Leveraging digital business as part of broader customer solutions Supply chain leading balanced growth

The Future

The Future Agility Close to the commercial team (Support) Simplification Sell out integration Collaboration with key customers More analysis, less manual work Understand their issues Participate in meetings Keep innovating Align service level metrics

“Ni la mejor innovacion genera ventajas competitivas para siempre” Philip G. Moscoso

THANKS!