Result: a 90% market share in a massive new channel lead to total increased volumes of 500% at an FMCG manufacturer. However, this was an unexpected side effect of an effort to transform the speed of decision making for winning tenders and contracts.
The situation. Tim Richardson, now director and fonder of GrowthPath, served in Europe as Financial Controller for the Consumer channel of Philips Lighting. In this role, he lead the profitabilty anaysis of tenders with Europe-wide tenders to supply branded and private label products to retailers such as Tesco, Carrefour, Auchan, Rewe, B&Q etc. This was frustrating. Volumes of these tenders were large enough to have a significant impact on factory load, so insight into fixed and variable costing was important. As well, packinage requirements were important and highly variable. On top of that, each retailer had different logistics models.
Simplifying the forecasting and business planning process brings rewards
Summary
A dramatic reduction in forecast complexity lead to much stronger focus on the short term future rather than the short term past. The greatest risk was loss of ownership for results, but the organisation surprised by greatly welcoming a focus on business drivers rather than unnecessary detail and complex data gathering.
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Internal controls provide competitive advantage during and after major downturn
Summary
Business controls lead to a large competitive advantage when an unexpected economic shock hit.
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Improving agility and insight transforms the business
Summary
Philips Lighting had around 30% market share in the European Compact Fluorescent Lamps business. When a new channel arose requiring much faster and more critical short-term profit insight, Philips developed new decision making insights. This channel grew much faster than expected, and Philips was much better placed than competition to respond. It lead to a tripling of volumes and clearly leading market share, as well as enormous credibility for the brand as a key player in sustainability.
Read more: Improving agility and insight transforms the business