Nestlé Continuous Excellence

Transcription

1 Nestlé Continuous Excellence Accelerating our performance improvements" José Lopez June 29 th, 2009 Nestlé Investor Seminar - José Lopez

2 Operations in Nestlé: 2008 key figures Materials Sourcing Agriculture Procurement Supply Chain Distribution Customer Service Production Manufacturing Engineering Sustainability Quality Environment 594'000 farmer relationships 456 operating factories 41'000 ktons of products CHF4.9bn of capital expenditure >2'000 distribution centres 183'000 people... 2 Nestlé Investor Seminar - José Lopez

3 2008 has been the best year ever for Nestlé operations improvement activities Operations saving index Significant acceleration in 2008: +11% vs > CHF12bn saved over the last 10 years 3 Nestlé Investor Seminar - José Lopez

4 Manufacturing productivity has further improved Number of factories and production volume per factory # of factories Production volumes per factory (ktons) 34 factories divested and 10 new factories commissioned in 2008 Production volume per factory increased by ~ 34% over the last 5 years Introduction of micro and finishing factories 4 Nestlé Investor Seminar - José Lopez

5 Environment and safety indicators have confirmed the positive trend Variation Water Consumption Energy Consumption Greenhouse Gases Lost Time Injury Fr. m3 gigajoules kg CO 2 rate on 1mio hours worked -32% -22% -25% -69% 5 Nestlé Investor Seminar - José Lopez

6 At the end of May 2008 we launched Nestlé Continuous Excellence... One Nestlé Operating model Nestlé Integrated Management System (NIMS) Quality, Safety, Environment, Standards, Business Excellence... Leadership Development Nestlé Management & Leadership Principles, Business Principles, Nestlé on the Move... Goal Alignment e.g. Mission Directed Work Teams, Mini Business Units, DMAIC problem solving Measure, Monitor, Organize LEAN Supply Chain TPM Audits, Self Assessment Tools... Consumer Customer Distribution Manufacturing Packaging Raw Material Total Performance Management 6 Nestlé Investor Seminar - José Lopez

7 ... and beginning 2009 we accelerated the deployment pace of the foundation modules Achievement vs. May 2008 roll-out plan Dec June 2009 Goal Alignment & leadership 100% (# factories activated vs. planned) 116% Green Belt Trainings (# session delivered vs. planned) 100% 170% The Nestlé Quality Management System is introduced in parallel to ISO22000 and ISO9000 certification The ISO14001/OHSAS18001 certification program has been advanced by 12 months; 95% of the factories to be certified by December Nestlé Investor Seminar - José Lopez

8 Increasing the number of improvement activities, no matter how small, proved to be successful... Goal Alignment modules are delivering outstanding results > people trained as yellow/green belts over the last 12 months Example: Nestlé South East Europe (6 factories) q q > 400 people involved 18 improvement opportunities identified and initiated q Absenteeism in 2009 vs.2008: -62% Project Reduce over-weight of Kit Kat Senses (Sofia Fact.) Improve line efficiency of OPM Line (Sofia Fact.) Reduce level of rework in Mura production (Sofia Fact.) Reduction of Stoppages in Coffee retail line (Inofyta Fact.) Nescafe Sticks Operational Improvement (Inofyta Fact.) Reduction of R&G lines (Inofyta Fact.) Line efficiency and losses improvement in 1,5 LT Line (Korpi Fact.) Progress Sponsor Green Belt T.Vassileva T.Vassileva T.Vassileva D.Simeonidis D.Simeonidis D.Simeonidis M.Karabali G.Tsonkova M.Bali B.Vlachkov K.Daskalopoulou G.Kostarelis K.Papadogianni N.Floudas Exp. Benefit EUR 210 k EUR 96 k EUR 20 k EUR 85 k EUR 60 k EUR 23 k EUR 31 k > 400 new improvement opportunities identified so far in 2009 Line efficiency and Losses improvement in 0,5 LT Line (Korpi Fact.) Reduce losses in 5 Gallons bottles (Dodoni Fact.) Reduce level of Bad Goods in I/C operation in Greece (SC I/C Greece) JOE 4 Line Performance Increase (Timisoara Fact.) Optimisation of material losses in Rollo2 moulding line (Stara Pazova Fact.) Reduce rework generation in Tavros Fact. (Tavros Fact.) Reduction of overfilling in Traditional cups category (Tavros Fact.) Reduce COPincones & extrudedsticks lines (Tavros Fact.) M.Karabali M.Karabali P.Pionat C.Osorio N.Sakoutis Y.Poulios L.Touliatou Y.Poulios P.Tsonis N.Thalassinos G.Galanos N.Dragan M.Popov N.Giabouras I.Chaviaropoulos C.Babanas EUR 28 k EUR 30 k EUR 250 k EUR 40 k EUR 35 k EUR 32 k EUR 30 k EUR 30 k Improve couvertures loss (from 2.82% to 0.5%) Timisoara C.Osorio TBD EUR 15 k Increase coffee packing productivity by 5 % & reduce efficiency loss by 1% (from 94 % to 95%) Timisoara C.Osorio TBD EUR 40 k DMAIC Projects to be defined (all factories) FM s TBD EUR 300 k 8 Nestlé Investor Seminar - José Lopez

9 ... across the 5 continents NCE Foundation modules results - Example Graneros (Chile) Rorschach (CH) Rio Pardo (Br) Inofyta (Gr) Goal Alignment improves performance and line efficiency. 100% 90% 80% 70% 60% 50% 40% Performance 53% 64% 64% 73% Visual aid on the Hoegger 1 Line triggers overfilling reduction from 0.97% to 0.12% Savings 0.19 mio CHF before 1.00% I Chart of Overfilling (%) * 900ml before implemening Visual Aid * UCL=1.17% After 2 months of Goal Alignment Minutes Lost per shift BEFORE Efficiency Loss - All Nescafe Products 200gr AFTER UCL=187,2 _ X=65,1 LB=0 30% 100% 90% Fab. Aglom Efficiency Fab. Cer. Inf % 89% I ndividual V alue 0.00% % % % -4.00% -5.00% -6.00% : : : : : : : : : :00 _ X=-0.97% LCL=-3.11% OCT 07 NOV 07 JAN 08 FEB 08 MAR 08 APR 08 Period MAY 08 JUN 08 JUL 08 AUG 08 - Increased stability -Less incidents SEP 08 80% 70% 60% 50% 62% 71% 61% 74% 80% 79% N16 N30 Rov aglom Rov Cer. Inf Harrismith (South-Africa) after Savings through Goal Alignment projects: Ende der Periode 2008 savings: 4.2 mio CHF 2009 estimated: 19 mio CHF (incl. projects started in 2008) I ndividua l Value 1.00% 0.00% -1.00% -2.00% -3.00% -4.00% -5.00% -6.00% I Chart of Overfilling (%) * 900ml after implementing visual aid * : : : : : : :49 Ende der Periode : : : :54 _ UCL=0.26% X=-0.12% LCL=-0.49% South Asia Region Overfill Overfill%/Day %/day 6.0% 5.5% Before Quick win 3.5% Final Goal Overfill Reduction Laminate Loss Laminate Loss 2.8% 35% 2.5% 1.8% Before Quick win Final Goal Laminate Loss Reduction Loss Loss Mins in Mins 46 Min 25 Min BeforeQuick Win Loss in Mins (Stoppages) 9 Nestlé Investor Seminar - José Lopez

10 To better monitor and trace the results we have deployed a new tool... Nestlé Continuous Excellence: large number of small decentralized improvement activities Clear monitoring and short reporting cycle time to enable fast decision making 10 Nestlé Investor Seminar - José Lopez

11 Our action plan for is to accelerate the deployment of Focus Improvement pillar... FI pillar roll-out plan (# factories activated vs. total scope) Focus Improvement (FI) to identify, analyze & eliminate losses 91% 100% FI natural evolutionary step of Foundation modules 68% FI to support and promote large number of small improvements activities 29% Nestlé Investor Seminar - José Lopez

12 ... as well as to disseminate the Lean concept outside the Operations domain NCE pilots areas beyond Operations Transactional processes within GLOBE and our shared business services (GNBS) Managerial processes within our Centre Corporate activities Marketing, communication and sales activities within our Waters business 12 Nestlé Investor Seminar - José Lopez

13 Our target is to further accelerate our efficiency drive across the entire value chain... Our target is to further accelerate our efficiency drive across the entire Our value competitive chain... advantage to create gaps Alignment and strategic control of the value chain To have higher influence on the total delivered cost enabling broader scope for Nestlé Continuous Excellence 13 Nestlé Investor Seminar - José Lopez

14 ... to support and enhance The Nestlé model 1. Long-Term Organic Growth Target 5-6% 2. Continued year after year improvement of EBIT margin 3. Improving Capital efficiency / Business ROIC / Cash returns to shareholders Sales EBIT Resulting in an industry outperforming, longterm total shareholder return 14 Nestlé Investor Seminar - José Lopez

15 Thank you 15 Nestlé Investor Seminar - José Lopez