Integrated Corporate Planning at Coca-Cola Europacific Partners

Board Project Overview

• Division: Supply Chain Finance
• Implemented solution: Integrated Corporate Planning - Driver Based Supply Chain Planning and Forecasting
• Project scope: Manufacturing (48 plants), Warehousing (85 sites), Cold Drinks Operations & Logistics
• User types: CFO, Head of SCM, Controllers, Department and Plant Managers

The Starting Point: Spotlighting the “gray world” of supply chain

To understand Coca-Cola's challenge, and the consequent Board solution, we start with the company’s desire to transform its Supply Chain Finance according to three guidelines: leaner finance, automated planning, and optimized reporting. As Ivan Evstatiev, Senior Manager, Planning & Performance Management at Coca-Cola Europacific Partners, states:

This is a true story of a business case of complex corporate finance made simple (or at least greatly simplified).

As enablers of this transformation, the Group identified three connected intervention areas:

• The evolution of planning methodology from the “classic” finance approach to the adoption of Driver-Based Planning
• Digital innovation; moving away from Excel and Access to implement a modern solution to achieve integrated corporate planning and analysis
• Enhancement of the organization’s mindset and communication among the different teams

In a nutshell, the Group aimed to combine a new software solution with a new way of planning, underpinned by comprehensive communication across the company. Ivan explains:

This transformation involved pretty much the whole scope of our Supply Chain Finance department, that is half of our Coca-Cola world. We refer to this field as 'the gray world', simply because – compared to more visible areas such as Sales and Marketing – the supply chain gives rise to both technological and financial complexities. Therefore, it was extremely critical for us to engage the finance functions in our vision of transformation.

Transformation at Work: Driver-Based Planning

The concept of Driver-Based Planning can be simplified in one sentence: financial planning explained through operational data and business drivers/metrics (or Key Business Indicators - KBIs). It covers something that conventional planning is not able to do; it closes the gap between targets, forecasts, and resource allocation. Coca-Cola Europacific Partners needed a solution that could combine both financial and operational analysis and planning to effectively enable the driver-based planning approach.

The Board Intelligent Planning platform turned out to be the best fit for Coca-Cola’s needs because it offers smarter planning, actionable insights, and better outcomes. In addition, Board could fulfil one of the most important requirements of the driver-based planning approach, as Ivan highlights:

Picking only those variables – which indeed we call drivers - that are tangible in terms of the control of the management. In this way the driver-based planning can be 'digestible' and – finally – bridge finance teams with their operational business partners.

The KBIs Coca-Cola monitors and controls in its driver-based planning activities are grouped as follows:

LEADING KBIs

• Sales Volume
• Production Volume
• Full Time Equivalents (FTEs)
• Productivity

LAGGING KBIs

• Payroll Variance
• Line Speed
• Returns

"Imagine a production line - let’s suppose it’s the bottling/canning line. As you may know, that line has a particular speed of bottles per hour and a particular productivity level based on the productivity of the people who work on that line. You might have a crew composed of four operators, one technician, and two asset care planners to enable that production line to work, and essentially you have production volume or estimated production volume that has to run on the line itself," Ivan explains.

Thanks to Board, Coca-Cola can easily check and analyze how much salary, social security benefit, payroll tax, and other elements it needs to pay to the above-mentioned operators, technicians, and care planners who work on the canning line. The company can also instantly see how much electricity and water that the production line is consuming, as well as how much maintenance and preventive care is required. These reports and analyses are seamlessly combined with the simulation capabilities of the Board platform itself. Let us suppose, for example, the production controller wants to evaluate a hypothetical operational change in the crew pattern of a specific production line, and consequently a change in the work schedule. Through the simulation capabilities of Board, the controller can see the financial impact of those changes, e.g. the cost of labor and the cost of utilities, enabling them to decide which changes to the crew pattern or work schedule are best.   

"By the click on a button and a few calculations and algorithms working in the background, we are able to immediately gain full control of the operational data. In fact, we can immediately get a fully-fledged plan, and this is exactly the concept of bridging finance teams with their operational business partners and making them talk to each other. In this way, operational people - or whatever business people we can imagine - can directly link the operational data to the financial data, keeping the health of the company under control. In the past I had to adjust – for example – one particular P&L line, basing my choices on gut feeling. But today, thanks to Board, we can justify our decisions directly on operational data," Ivan continues.

From Manufacturing Plants to Vending Machines: All FMCG supply chain activities on the Board platform

As an FMCG company, Coca-Cola Europacific Partners needs to ensure full supply chain visibility as well as complete harmonization between various production and delivery stages at all times. To achieve this, rigorous planning processes and frequent forecasting are required, as well as monitoring of closing activities.

As part of the company’s cold drinks operations, all vending machines found in local stores need to be managed and controlled, including their placement, activities, movement, and maintenance. Line-of-business managers in manufacturing, warehouses, and logistics, among other departments, must derive tangible business value from the huge pool of data created by this process and generate a healthy flow of information throughout the value chain, as Ivan highlights:

What we cover with Board is pretty much the whole myriad of activities that supply chain touches today. This means 48 plants, 85 warehouses, everything that you can imagine around distribution, from trade to branch local delivery division, and so on. Everything is integrated into the Board platform: every site, plant, and any aspect of logistics.

Project Scope

• Weekly and monthly forecasting (mid-month & end-month)
• Monitoring of closing activities
• Annual business planning/budgeting
• Full-fledged country consolidation & monthly reporting
• Europacific Group/entire Coca-Cola Europacific Partners Supply Chain consolidation

In light of the areas of transformation we undertook – a new planning methodology, digitalization, and new cultural mindset – Board has allowed us to positively achieve our project goals, delivering time efficiency, process automation, standardization, and data centralization, and increase ease of use and system maintainability as well.

Time Efficiency in Finance Activities: 10% manual and 90% digital

Thanks to the digital transformation of financial activities with Board, Coca-Cola Europacific Partners now saves significant amounts of time, allowing teams to focus on analytics and decision-making and find opportunities for continuous improvement, rather than spending time on manual, non-value-added work, as Ivan explains:

10% of the input of our finance supply chain activities are based on country-specific business insights, whereas 90% consists of pre-populated Profit & Loss outputs thanks to the value driver methodology and the automation of operational data input. We do not want finance people to struggle with all the tedious sequential steps of preparing a plan: we wanted to digitalize this area and that’s what we’ve succeeded in doing with the Board platform.

Time Efficiency in Data Transfer: Changing the status quo from 24 hours to 15 minutes

Alongside time efficiency from a financial standpoint, Board has also enabled Coca-Cola to increase efficiency from a data transfer perspective. Before implementing Board, the company was stuck in a 'culture' of overnight data loads and transfers due to system performance. As today's organizations deal with a huge amount of data, it is essential to have updated, relevant information in (nearly) real-time, allowing employees to quickly gain the most recent meaningful insights to boost the entire planning process from goal setting down to operational execution.

Ivan highlights the benefits of the new approach:

Now we have a data transfer every 15 minutes from our ERP system to the cloud and from the cloud to Board, and we can effectively monitor how our data transfer is evolving at any given time per country. We can prepare complete financial statements from a profit and loss perspective. So, compared to the 24 hour-cycle we were committed to doing before, 15 minutes is definitely a great revolution and the breaking of status quo, as well as out-of-the-box thinking.

Live Status Tracker: When automation means keeping pace with fast changes

In the FMCG industry, more than others, small numerical changes can have a remarkable impact on the whole planning processes, up to the very top of the supply chain consolidation. Before using Board's automation capabilities, Coca-Cola struggled with complex Excel files and Access Databases linked together, not always allowing multiple users to access information. Different teams and managers had to periodically communicate with each other to be sure they were all aligned. Everyone from the CFO to the Head of SCM, Controllers, and Department & Plant Managers needed to call one another each month and ask the people in charge of a given planning process if they were still working on their numbers or if the current values could be trusted, then pick them and carry on to the next step within the hierarchy.

Ivan explains how things have now improved:

Unfortunately, more often than not, after preparing the financial statements or the forecast, closing the cycle, and assuming everything was done, we realized the next month that the numbers changed because somebody, somewhere, in some plans had changed one number, consequently impacting everything! Instead, today, thanks to Board's status tracker cockpit, we can always monitor how planning is going, who is still working, who is ready, and who has any impediment with the planning process.

The "Mother of All Buttons": Consolidation with one click

Historically, Coca-Cola Europacific Partners has undergone many mergers and acquisitions, with every entity coming from a different background and bringing its own way of planning and its own business metrics, logic, and methodologies. Using Board, the business can automatically perform full country consolidation, ensuring data consistency and providing deep insight into financial and operational results. Within Board, Coca-Cola’s teams find a red button labeled 'Approve all', which Ivan explains:

We call it that little red button, ‘the mother of all buttons’, just because it allows us to consolidate in a split second! Yes, consolidation can happen with a single button! Yes, consolidation can happen for 48 manufacturing plants and for 85 warehouses! At the beginning I was very skeptical, but I can guarantee you that it works!

Board allows the Group to discover crucial insights which drive business decisions and unify strategy, finance and operations. In fact, leveraging the Board platform’s advantages, Coca-Cola Europacific Partners has effectively achieved standardization and data centralization, also enhancing a shared service center and a Center of Excellence in Bulgaria that is responsible for all the data loads and the data inputs. This center can centrally control the whole process of standardized planning, as well as any analysis and reports, from one location for all the other countries in which Coca-Cola Europacific Partners operates.

Behind the Scenes: Data transparency

Through rapid development time, Board has given Coca-Cola Europacific Partners an effective combination of automation and standardization, including automatic forecast generation. This has been a digital revolution, achieved by the alliance of methodological principles with outstanding technology:

It’s not a single application that can start a revolution; rather it is the blend of all the applications we have developed on the Board platform, together with its architecture, its flexibility, and its advanced Graphical User Interface (GUI) as well. Board has given us the efficiency that everybody was pursuing and that management wanted to see in the entire planning process.

But this kind of project could not be achieved without a solid data baseline: optimization, efficiency, digitalization, and automation is just the tip of the iceberg. Below the surface there are other benefits to consider, such as data transparency across the full decision-making process, as Ivan discusses:

When I say that Board ensures our company data availability and integrity, I’m not merely talking about the traditional idea of ‘garbage-in, garbage-out'. I mean the capability to empower the organization with a sustainable process that provides the data on time and in good quality.

How to engage everyone in the company and drive the change: Ease of use and communication

When a relevant change is introduced in an organization, it is fundamental to actively include all those concerned. In this way, the implementation is likely to succeed and be well received by people throughout different departments and hierarchies. As Ivan highlights:

You need to know your crowd to be able to implement such a transformation quickly and be strategically aligned. Absolutely all stakeholders within the company must be aligned to what management would like to achieve…otherwise the roadblocks could be quite big.

Alongside technical support during project management, the ease of use and flexibility of the Board platform has helped Coca-Cola Europacific Partners to effectively and smoothly adopt the new solution, From the end-user standpoint, Board's integration with Excel and the rest of the Microsoft Office package – traditionally embedded in every finance function – has made user adoption even easier. Additionally, finance applications now are directly maintained by the finance team itself, independent from the IT department.  

Board's embedded workflow functionality has enhanced visibility among Coca-Cola Europacific Partners' employees and senior management teams, both at the country level and at the overall Europacific level. On the same platform, the company can now monitor any manufacturing plant, warehouse, logistics processes, and cold drinks operation for every single Country. On the very same platform, the management team can control the progress report of all the plans and forecast submissions coming from all the Europacific countries. This effective combination of a detailed view and a 'big picture' translates into better user adoption and addresses the management team's need to keep a close eye on the activity of the workforce.

People within the company have also appreciated the technical performance of Board, such as its speed and the user-friendliness of the cloud base. Ivan concludes:

We have a lot of central teams and local teams in the countries and everyone can recognize the benefits of Board for the company. All users are now integrated within the same platform. Thanks to Board we can address the full planning scope, not only part of it, not only monthly reporting, etc. Absolutely every user that has one role in the planning cycle is already engaged with the Board platform. That allows us to promote communication across the entire organization, so that we can effectively drive the change.

The content and views discussed in this case study represent the information shared by Coca-Cola Europacific Partners during the BoardVille event on Monday 14^th May 2018.