Performance Progression Through Value Chain Credentials and track record IMPROVING YOUR RESULTS TODAY, SECURING YOUR RESULTS TOMORROWYour progression is our obsession EFESO Consulting is a global management consultancy firm helping its clients progress faster and better. Over 500 consultants, operating from 35 locations, working in over 75 countries and representing more than 45 different nationalities supporting more than 900 progression programmes every year in Tandem with our clients. Our progression motto “Improving results today, securing results for tomorrow” means achieving tangible business results faster and, at the same time, developing the capabilities, leadership and culture to continue to improve faster than competition in the future. We engineer the combination of continuous improvement, transformation and disruption approaches to yield the most effective and durable progression results. We look at and connect progression across the End to End Value Chain and from micro (the individual contributor) to macro (eco-system). Our progression approach combines strategic (orientation and prioritization) systemic (changing the DNA of the functioning of a company in a sustainable way) and specific (tangible specific results) interventions. To improve the results of today and secure the results for tomorrow we address at the same time 4 Dynamics: Our people bring together hands-on experience and expertise spanning a wide range of sectors and functional capabilities. The success of the EFESO approach is reflected by our 90% client retention. “Coming together is a beginning, keeping together is progress, working together is success” - Henry Ford For more information check our website: www.efeso.com Value Dynamics - Exploiting the fast changing patterns of value creation to focus on what will really make the difference in terms of quality, functionality, experience, time to market Flow Dynamics - Understanding how to streamline activities to deliver the target value Asset Dynamics - Ensure the optimization of the lifecycle and value/cost ratio of key assets such as machines, data, brands, intellectual property Human Dynamics - Enhance the competence, commitment and culture of your people exploiting adoption, anchoring and leadership expertise 1 2 3 4In this new Contemporary Age of Real Time where companies need to increase agility and responsiveness, it is not enough any- more for Value Chains to deliver Cost and Cash benefits. However, it is necessary to deliver Cost, Cash AND Revenue Benefits. Traditional Supply Chains must be trans- formed into End to End Value Chains, engag- ing partners End to End from Suppliers to Customers, and must identify innovative solutions to boost sales, while continuing to improve the cost & cash structure. The below has been achieved from our cli- ents working on a concurrent approach to eliminate losses end to end in the Value Chain. This only works if you take an End to End approach with a line of sight to the End-2-End Value Chain Benefits Impact on Top Line & Bottom Line Impact on Working Capital Impact on Customer Experience Contributing 20-40% in overall Sales Growth Reduction in Order Lead Time Improvement in On Time in Full (OTIF) Reduction in Total Delivered Cost Customer Delivery Frequency (to Retail DCs) improved from weekly to daily Improvement in Compliance; Service as measure by the customer Increase in Asset Utilization Improvement in On-Shelf Availability Reduction in Inventory Days-on-Hand Improvement in Net Promoter Score (NPS) 5-15% 2-5%2-4% 1-72-6 days5-15% 15-25%3-7 points70-80 Results are measured two years after start and compared with previous 2 years. Average of FMCG clients Value Chain Which are today’s challenges? ultimate customer, and eliminate losses gen- erated by the friction and desynchroniza- tion that occur across and in-between silos. Finding a solution to break down silos, loss- es in-between functions, and unlocking Cost, Cash AND Revenue is a challenge. Mobilizing multiple functions at speeds synchronized to your Customers requirements is critical to maximize your business results and resourc- es to realize these concurrent requirements. From our experience in different indus- tries, we know that most companies are dealing with quantification of Value, losses in-between silos, and Growth generation. This transition from a traditional Supply Chain into an E2E Synchronized Value Chain is inclusive of Product and Technology Development, Customers, and Consumers. A business will be able to seamlessly sell, design, source, make, and ship to their cus- tomers. We believe that a partner, who is backed up by years of research and based on years of experience, will help to meet and resolve these challenges. EFESO Value Chain provides profound understanding of busi- ness essentials as well as the value chain insights that apply to different competitive requirements. We have articulated what we know are rele- vant support clusters, illustrated with prac- tical cases on how we work in tandem with clients to achieve client targeted Business, Revenue, Cost and Cash results. If these cases resonate with the challenges you’re facing, we would be happy to discuss your progression journey and how we could part- ner with you to achieve the maximum result of your initiatives. Agility and responsiveness need to increase A partner backed with years of experience will resolve the challenges 3The EFESO Concurrent Digitalized Value Chain (CDVC) progression model works holistically across all of the E2E Value Chain domains to ensure they are improved upon in a con- current manner against business and mar- ket aligned goals. By synchronizing capabil- ities and performance improvement across these domains, key interdependencies are identified and work in parallel. This allows quicker progression and sustained gains. The CDVC Model first translates business goals by domain performance requirements, then assesses current state capabilities versus those requirements. An improve- ment plan is then plotted to span the CDVC Domains. As illustrated below, this ensures priority goes against restoring the most crit- ical foundations while enabling progression against capabilities that are most strategic to addressing business needs. REAL TIME NETWORK SALES/VALUE BOOST WITH LATEST DIGITAL TOOLS Restored Standards Defined, Foundations ensured Level 1 In-Control Standards adherence Performing to standard Level 2 Responsive Flexibility and Speed Agile, Simplified, Effective Level 3 E2E Integrated & Synchronized VC End to End Integration based on Customer Demand Pull Level 4 Real Time Network Sales growth and value creation in interconnected network Level 5 Costs, Cash, Revenues Costs X Cash X Revenues DESIGN & PORTFOLIOPLANNINGSUPPLIER & SOURCE 60% of the total losses happen between the silos MAKEDELIVERYSALES & CUSTOMER RESTORED Standards Are Defined CONTROL Standards Are Followed NTRROONIN CO re FFolloweds AStandardsAr RESPONSIVE Standards Are Improved End To End To Increase Agility E2E INTEGRATED & SYNCHRONIZED End To End Involvement Of Suppliers/customers REAL TIME NETWORK Sales/value Boost With Latest Digital Tools Business Need Margin/Cash/Sales VALUE NETWORK SUPPLY CHAIN SILOS E2e Excellence In Each Silo Concurrently START Service To Customers Transformation: E2e Excellence THEN Real Time Networks ULTIMATELY Value Chain How can our experience help you? As EFESO works with its client we have found that: • More than 60% of companies have yet to break-out beyond a “Silos” improvement approach and Level 3 capabilities to unlock the opportunities from an integrated End to End Value Chain. • Manufacturing maturity tends to be higher, due to the historical focus on TPM/TQA and World Class Manufacturing. • The lowest maturity is found on the connection/collaboration with Suppliers and Customers, this represents the biggest opportunity for most companies where they can truly collaborate with the external partners to eliminate end to end losses and boost results. • New forms of leadership, skill-sets and behaviors are required to deliver results from Next Generation Value Chains. Progressive leaders can use the CDVC assessment model to anticipate needs and eliminate weak links in their End to End Value Chains. Restoring the most critical foundation while enabling progression New forms of leadership are required to deliver results from Next Generation Value Chains 4The EFESO Value Chain Service Lines are built into a CDVC Progression Plan. While some of these Service Lines are domain specific, others span multiple domains as illustrated below. The key to our approach is that the Progression Plan integrates this work in the most effective manner possible by deliver- ing the client tailored capabilities and result improvements. This focus on operationalizing the plan is another strength of EFESO as we ensure capabilities are built across the Human Dynamics, Work Process and Digital Dynamics in order to achieve sustainable results. Thanks to our Data Engineers, Data Scientists and Human Dynamic experts, we are in fact able to support our clients on all the 3 legs of Process, People and Advanced Analytics. We typically see that our clients are well developed in Make and Distribution Operational Excellence, but have large opportunities on the external interface with Suppliers and Customers. However, the larg- est gap is with Sales (Commercial/Marketing) and this is where the Value proposition of your Value Chain needs to be connected to drive Growth and Sales. Focus on operationalizing the plan is another core strength of EFESO 5The following illustration shows the varying levels of maturity across the nodes in the Value Chain. Companies over-optimize parts of the Value Chain instead of mapping the requirements of their business to each Domain’s perfor- mance requirement. In this sample of 10 companies, Manufacturing/Make is further developed than Sales & Customer, Supplier & Source, and Design & Portfolio (circled in Red to indicate lower level of development). RED = Not developed domain Orange = Some development in the domain Green = Well developed domain Each number represents a company, their number is ploed in each domain to the level of development in that domain # The priority in the EFESO CDVC model supports restoring the most critical foundation From our experience in different industries, we know that most companies are dealing with questions like: • How do you quantify the Value your Company is providing to the Market, to your Shareholders/Owners, to your Customers/Consumers? • Do you measure the Losses in-between the Silos/Functions of your organization where 60% of the Losses occur? When was the last time you performed a loss analysis on your Value Chain? Does it just capture losses from a cost and cash point of view or include barriers to growth that occur between functions and value chain silos? • Does your Value Chain involve a deep partnership between Sales and Technical Teams to transform Value Chain into a Selling tool to generate Growth in addition to Cost/Cash? • Are you transforming Value Chain from a hurdle into a Selling engine? • Can you improve utilization of your World Class tools and methods to the other Value Chain disciplines? • Do you see your Value Creation as a Concurrent Progression Master Plan or as individual project lists in the silos? • What is the maturity level of your organization at leveraging Process, Digital systems and People (including Human Dynamics and Performance Behavior elements) across the Value Chain domains to drive Revenue, Cash and Cost? • How well defined is your plan to deliver this Value? Is it a holistic, granular, progressive plan that reflects market dynamics, digital/technology dynamics, and human dynamics, or is it more of a static masterplan? The following pages show examples with tan- gible results in the Value Chain. The lowest maturity is found on the connection/ collaboration with Suppliers and Customers, this representing the biggest opportunity to eliminate end to end losses and boost results 6Check your forward move Restore the most critical foundations while enabling progression against capabilities that are most strategic to address business needs 7Global End-to-End Network Design Configuration with Trade Barriers & Automation The client is a Global Healthcare manufacturer who had a fragmented manufacturing footprint, reaching capacity in critical capability due to strong business growth. The business required a network strategy to: • Eliminate waste and cost • Improve service and time to market • Increase business continuity to reduce risk Results • Assessment of Business Needs translated into Supply Network Requirements taking into account trade barrier and automation impact • Optimisation of current end-to-end supply chain to deliver quick wins • Exhaustive evaluation (35 scenarios) to identify the optimum global supply chain footprint (10-year plan) • Network modelling for cost to serve • Joint workshops for qualitative assessments • Overall customer service improvement with 10% operating cost savings plus 25% cash savings Business Value How do you reach tangible results? 8Value Chain Integration End to End key material optimisation The client is a major player in the beverages industry. Its 2020 Supply Chain Strategy required to be globally cost competitive and lean. Top level review of current operations confirmed that sub-opti- misation was happening in the E2E Value Chain (from tier 1 supplier to T1 Distribution). Inventory policies or decisions are developed for types of inventory (FG RM, WIP) in isolation of the total supply chain view. Past attempts to apply VSM methodology within the Client have either focused on one specific area (silo approach), or been unable to unlock true value. Results • Detailed E2E value stream map and diagnostic • Prioritised & validated list of value opportunities • By analysing 22 Finished Goods made at main brewery through the E2E supply chain, a potential of 16.5M AUD WC reduction and 5.74M AUD EBITA improvement for the total E2E network was identified (over the next 2 to 3 years, without CAPEX) identifying 7 key operational improvement areas and mindset & behaviours Implementing an Integrated S&OP Optimize overall business margins The client is a global FMCG company; it covers world markets with 3000 SKUs and it is facing a steady decline in volumes and revenues • Increased portfolio complexity coupled with unstructured value chain management is causing more and more frequent stock outs and worsening customer service • EFESO, which is also working in Manufacturing with a WCOM™ program, is asked to provide the client with its Value Chain experience to adapt and improve the S&OP process. Results Working with Regional Supply Chain Manager, we adapted and customised the S&OP process to local business needs, and cared about the subsequent implementation, while deploying a CI culture with- in the Value Chain organization, from Sales to Marketing to Supply Chain After 12 months from project start: • Robust, embedded level 3 S&OP process • Stock outs reduced by 75% • OTIF improved by 50% 9Next >