Cargill Confidential
Nourishing Ideas
Nourishing People
Cargill Confidential
Cargill at a GlanceCargill at a Glance
Cargill Founded1865
Ø Grain warehouse in
Iowa
Core Capabilities DevelopedØRisk Mgmt
ØSupply Chain Mgmt
ØGlobal Mgmt
Core Value EstablishedØTrustworthy
ØCreativeØEnterprising
TODAYØ$59 Billion+ in Gross
SalesØOver $1 Billion in Net
EarningsØNet Worth >$9 BillionØ97,000 Employees in
1000 Locations
Core BehaviorsØCustomer Focused
ØInnovativeØHigh Performing
Integrated Food Products and Food Service Company
Cargill Confidential
Geographic Presence
North America37% of net worth50,889 employees
Latin America16% of net worth15,123 employees
Europe/Africa36% of net worth15,763 employees
Asia/Pacific11% of net worth15,186 employees
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Strengths of Cargill’s Businesses
• Reputation for integrity
• Financial soundness
• Knowledge of the food system
• Building for long-term success
Cargill Confidential
Culture & Behaviors
• Ethics/Guiding Principles
• Total Quality• Food Safety• Customer Oriented• High Performance• Innovation
• Engaged and empowered work force
• Customer/Consumer Insight
• Community Involvement
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Changing Market Environment
• Agri-food Industry faced with significant changes and challenges– Increasingly complex business environment; faster pace of change– Customers/competitors consolidating – Greater reliance on outsourcing/more sophisticated suppliers– Pressure to deliver top line growth through new product intros vs.
product extensions– Shifting power to consumers (health, wellness, taste, convenience)– Margin pressures; over capacity
Cargill Confidential
Corporate Strategy Guidelines
• Private ownership
• Focus on agriculture and food
• A+ credit rating
• Operating managers
• Grow our competencies
• Maintain basic beliefs
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Year Four of a 10-Year Plan
Strategic ActionStrategic Action
“By 2010, Cargill will be the recognized global leader in providing our agricultural and food customers with solutions that enable them to succeed in their businesses.”
-Warren Staley memo, February, 1999
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Our Plan – Strategic Action
- 10 year journey, long-term perspective, but short-term urgency
- Internal education: explore, discover, create, deliver
- Cross-organization collaboration and transparency
- Restructuring and aggressive cost management
- Re-focus our portfolio on Ag/Food (exit Rubber, buy Agribrands, form Food System Design)
Capabilities Customer Needs
Commodities Solutions
Transactions
Broad Diversification
Relationships
Agri-food chain as our center of gravity
Cargill Confidential
Corporate
Business Unit Focus
Employee Focus
Collective
Cargill ConfidentialSource: Cargill Strategic Intent Presentation, June 2000
Three Areas of Strategic ActivityCargill will provide Food Chain Customer Solutions in the
following areas:
These new areas of activity would need to be incorporated into Cargill’s existing businesses.
Supply ChainManagement
Food Applications
Nutrition&
Health
Basic NutritionBuilding Blocks
Customer Solutions
Existing Cargill Food Chains
Cargill Confidential
Energize Sport Drink with Trehalose
NUT-NOTSTM
Soy Signature Bar
Performance Breakfast
Women’s and Men’s Bread with AdvantaSoyTM
Innovative Solutions
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Outback Steakhouse
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The world's first man-made fiber from 100% annually renewable resources.
A fiber that not only touches your skin but also touches your soul.
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Focus on Our Strategic Accounts
General Mills
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Cargill reached a safety milestone
Cargill’s safety index measures the frequency and severity of work-related injuries based on the number of hours worked. It decreased to a record 1.7 in fiscal 2003.
Success Story - Safety
0
2
4
6
8
10
1993 1995 1997 1999 2001 2003
0
25
50
75
100
125
150
175
200
225
Safety Index Million hours worked
Cargill Confidential
Supply Chain ManagementThe Customer Satisfaction/
Efficiency Paradox
March 2, 2004
Cargill Confidential
Grain Distribution Example
DistributionRaw Material
Production
Raw Material Logistics/
Storage
Processing Manufacturing Customer End
Use
r/C
onsu
mer
Processes/Organization Technology Materials/Cash Information Risk Management
• Grain originated from country
• Transported through elevator system
• Exported and distributed to the customer
Supply Chain Optimization
Product Assurance
New Product development
Raw Material Input
Cargill Confidential
Grain Processing Example
DistributionRaw Material
Production
Raw Material Logistics/
Storage
Processing Manufacturing Customer End
Use
r/C
onsu
mer
Processes/Organization Technology Materials/Cash Information Risk Management
• Grain contract grown and originated from country
• Transported through elevator system
• Processed into food ingredient
• Distributed to food manufacturer
Supply Chain Optimization
Product Assurance
New Product development
Raw Material Input
Cargill Confidential
Fully Integrated Meat Example
DistributionRaw Material
Production
Raw Material Logistics/
Storage
Processing Manufacturing Customer End
Use
r/C
onsu
mer
Processes/Organization Technology Materials/Cash Information Risk Management
• Specialty formulation fed to animals in feedlot
• Animals tracked through feedlot to slaughter plant
• Processed to product specific specifications
• Distributed to further processing facility
• Distributed to grocery or food service channel
Supply Chain Optimization
Product Assurance
New Product development
Raw Material Input
Cargill Confidential
Grain Distribution Discussion
DistributionRaw Material
Production
Raw Material Logistics/
Storage
Processing Manufacturing Customer End
Use
r/C
onsu
mer
Processes/Organization Technology Materials/Cash Information Risk Management
• Grain originated from country
• Transported through elevator system
• Exported and distributed to the customer
Supply Chain Optimization
Product Assurance
New Product development
Raw Material Input
Satisfy customer’s expectation of ‘guaranteed free of’ at low cost
Cargill Confidential
Grain Processing Discussion
DistributionRaw Material
Production
Raw Material Logistics/
Storage
Processing Manufacturing Customer End
Use
r/C
onsu
mer
Processes/Organization Technology Materials/Cash Information Risk Management
• Grain contract grown and originated from country
• Transported through elevator system
• Processed into food ingredient
• Distributed to food manufacturer
Supply Chain Optimization
Product Assurance
New Product development
Raw Material Input
How to respond to customer dissatisfaction as a result of new technology implementation?
Cargill Confidential
Fully Integrated Meat Example
DistributionRaw Material
Production
Raw Material Logistics/
Storage
Processing Manufacturing Customer End
Use
r/C
onsu
mer
Processes/Organization Technology Materials/Cash Information Risk Management
• Specialty formulation fed to animals in feedlot
• Animals tracked through feedlot to slaughter plant
• Processed to product specific specifications
• Distributed to further processing facility
• Distributed to grocery or food service channel
Supply Chain Optimization
Product Assurance
New Product development
Raw Material Input
Satisfy consumer’s demand for safe, low cost meat
Cargill Confidential
Thank you!
Jenny L. VernerVice President Supply Chain Management
Cargill
952/742-5034