1. Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
"I Get What I Want" –
Collaboration Towards Efficient On-Shelf
On-
Availability To Drive Shopper Loyalty
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

2. Participants Details
Mr Tim Edwards
Ordering Director
Tesco Stores (Malaysia) Sdn Bhd
Mr Nakulan T
Customer Service & Logistics Director
Colgate-Palmolive Marketing Sdn Bhd
Mr Ivan Chong
Customer Development Manager
Colgate-Palmolive Marketing Sdn Bhd
Ms Tan Seow Wei
Customer Service Manager
Colgate-Palmolive Marketing Sdn Bhd
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Contents
• Why we needed to do this
• What we set out to do
• How we did it
• Our results so far
• The conclusions we reached
• What next
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

3. Colgate Palmolive Brief Introduction
Colgate is a $15.3 billion consumer
products company
Truly global in scope, Colgate sells its
products in over 200 countries and
territories.
75% of sales come
Approximately from
international operations.
Colgate enhances consumers’ lives through
it’s quality products in Oral Care,
Personal Care, Home Care and Pet
Nutrition.
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Tesco Brief Introduction
Staff 472,000
Stores 4,811
Markets 14
Profit £3,176m
Sales ex.UK
£19.4bn
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

4. Contents
• Why we needed to do this
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Shopper Smart : “50% of
the shopper’s final choise
is made in front of
SHELF!!!”
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

5. Importance of ON SHELF AVAILABILITY
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Opportunities Along The Value Chain…
Chain…
Optimize Supply
Improve service level – Target 95% (Shipment CP Warehouse – Tesco DC)
Improve On-Shelf Availability – Prevent Loss Sales Opportunity
(Tesco Backroom – Selling Floor 50m distance)
50m
OOS? Identify root causes and jointly formulate improvement plans.
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

6. Supply Chain Collaboration for OSA
Tesco Supply Chain
Tesco Store Personnel
Colgate Customer Service OSA Resource/
Customer Development
Cross Functional Team ie CDT Supply Chain, Customer
Development Manager & The Field Sales Team working
together driving the on-going supply chain
collaboration initiatives in building engagement.
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Colgate Supply Chain Engagement
Schematic…
Schematic…
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

7. Contents
• What we set out to do
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Objective : Strategic Alignment
Mutual goals of Tesco & Colgate in driving shopper loyalty to
Colgate brands in Tesco stores
Focus on end to end supply chain to improve in-stock position with
optimum inventory coverage
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

8. Contents
• How we did it
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
How we did it
Understand the processes involved
Define what is an out of stock
Select trial stores
Resource the project
Run the trial
Collect the data and root cause analysis
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

9. 1. Understand the Processes
Step 1- CP Step 2 - Tesco
Physical On Store Data
Shelf (SOH, Order)
Tracking in the
Store
Step 4 -
Step 3 - OSA Root Cause
Trending Analysis
Step 5 -
Forward
Actions Step 6 -
Renewal
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
2. Define What Is An Out Of Stock
OSA Definition :
"At least one unit of undamaged stock has to be
visibly accessible on shelf by consumers and
acceptable for purchase. Otherwise it is counted
as an OOS."
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

10. 3. Select Trial Stores
Pilot/Selected stores :
Stores was selected based on different format,
performance and proximity to facilitate effective coverage
Pilot stores :
• Tesco Mutiara
• Tesco Puchong
• Tesco Hyper Shah Alam
• Tesco Extra Shah Alam
Product List :
Tracked both Home shelf Active and 2nd Site Promo SKU’s
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
4. Resource The Project
People resource
Dedicated OSA project resource
Actions at store :
Check and record stock on-shelf, shelf tag info
Cross checking Store Inventory movement report
Discussion with Store Replenishment Personnel
Taking photograph for reporting
Back in Colgate office :
Data entry and Root Cause Analysis for Reporting
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

11. 5. Run The Trial
Project Time Frame
6 Months
Tracking Schedule
Daily Tracking including weekends
Root cause Analysis and Reporting
Weekly results sharing
Monthly summary
Review at Monthly SCE meeting
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Contents
• Our Results So Far
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

12. There are lots of reason for Out Of Stocks
Store Replenishment Team – Does not place an order. Why? Book
stock accuracy?
Backroom congested – Stock On Hand positive, cannot locate
stocks
Stocks are not reachable – stack to high, too deep inside, in the
yard
Stock take, store personnel not allowed merchandiser to take
stock
Many more……still yet to identify
Different stores have different issues
We need to be flexible and customize
our solutions and tactic
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Some Root Causes We Found
Root Cause Description
Shelf Replenishment Positive SOH. Can’t locate stock in back room.
Stocks is available again 1 or 2 days later and the
Discipline
shelf is filled again.
Master Data (SPI, Discrepancy or dispute in pricing causing no
shipment
pricing)
Book Stock Accuracy Shelf normally empty for a prolonged period before
inventory is zerorised and replenishment order
placed
Supplier OOS Supplier OOS because of manufacturing capability
or demand error.
Shelf Constantly OOS as not sufficient shelf space to cater
for product off take. Shelf filled in the morning but
space/Replenishment
empty in the evening
frequency
Stock in transit Shelf is empty before replenishment could arrive
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

13. Systematical approach in WHY diagnosis
1
2
Supplier OOS.
System Inventory Accuracy Low Lines
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
1. CDC RED 175G FCM.
Long period of OOS.
Order was placed on 25th Jan 2010.
2, Colgate Triple Action.
SOH=0.
Delivery on 7th 8th 9th and 12th was
not fulfilled.
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

14. Root Cause Analysis- Results
Root Causes Contribution to Non-OSA
60%
50%
40%
30%
20%
10%
0%
Supplier OOS
Master Data
Stock in Transit
System Inventory
Shelf Replenishment
Space/Replenishment
Accuracy
Discipline
Frequency
Shelf
Store A
Store B
Store C
Store D
Reasons Code Average
Different stores have different issues
We need to be flexible and customize our solutions and tactic
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
OSA Results by Category
Oral Care Personal Care
100% 100%
95% 95%
OOS %
OOS %
90% 90%
85% 85%
80% 80%
Oct'09
Nov'09
Dec'09
Jan'10
Feb'10
Mac'10
Apr'10
Oct'09
Nov'09
Dec'09
Jan'10
Feb'10
Mac'10
Apr'10
Month Month
Fabric Care Home Care
100% 100%
95% 95%
OSA %
OSA %
90% 90%
85%
85%
80%
80%
Oct'09
Nov'09
Dec'09
Jan'10
Feb'10
Mac'10
Apr'10
Oct'09
Nov'09
Dec'09
Jan'10
Feb'10
Mac'10
Apr'10
Month
Month
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

15. 3 Major KPI‘s
KPI‘
KPI's Pre-OSA KPI's Post-OSA
Case Fill %
Case Fill %
OSA %
100 OSA %
100 96
94
90
90 86 90
80 80
70 70
Tesco inventory optimization has taken place and seen vast
improvement from 21days to 14 days.
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Steps Taken
Planogram change for Fabric Care
Delivery from 3x to 4x per week
Tesco Reviewing push factor for Promo Planning
Tesco SC sharing findings with Store operation
Sharing of insights from Dunhumby to improve
promo forecasting
Convert Fast Moving SKU’s from cross-docking to
DC
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

16. Contents
• The conclusions we reached
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Effective OSA Management
Involves many processes :
1. Understanding On Shelf
Availability
2. Replenishment and Last 50m
Ordering Processes Backroom to Shelf
3. Inventory Management
Processes
= replenishment
efficiency
4. Merchandising Standards
and Processes
5. Back of Store Processes
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

17. OSA tracking project alone will not improve OSA
OSA Dropped
Orders Root Master
Tracking
Cause Data
Analysis Alignment
On Shelf
Monthly SCE
Meeting Availability Efficient Store
Replenishment
Merchandisers
Joint Promo feedback on
Planning High Service Level
store
execution gap
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
Contents
• What Next
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

18. Key Success Factors
Senior management involvement – Joint Business Planning
Dedicated resource availability
Cross Functional Team involvement
Insights – Root Cause was supported by multi source
information to provide confidence in action
Good working relationship with store, timely in addressing
non-OSA vs other priorities
Managing conflicting KPI
Store Book Stock accuracy vs Daily Write-off value
Regular performance review
Transparent, Honest and Non-defensive
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company
What Next
Continue regular OSA Review meeting
Fortnightly
Involvement from SC, Merchandizing & Store
Manager level
Encourage greater participation on OSA Issues &
Corrective actions with Store involvement
CP Implant in Tesco
Joint Promo Planning
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company

19. THANK YOU
Driving Mutual Profitable Growth through Partnership
Colgate-Palmolive Company