ken dean - asqasq.org/public/quest/2014/nestle-op-excel-begins-with-customer-voice.pdf · • baby...

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CONFIDENTIAL DOCUMENT Property of Nestlé Purina Pet Care. Recipient shall not copy or distribute without the prior written approval of Nestlé Purina Pet Care.

OPERATIONAL EXCELLENCE BEGINSWITH THE CUSTOMER VOICE…

Quest for ExcellenceApril 7-9, 2014


Ken DeanVice President/Director Quality Systems

Customer Development GroupNestlé Purina PetCare Company


OVERVIEW OF NESTLÉ S.A.

• Largest and most admired food company in world• A nutrition, health and wellness company• Baby foods, coffee, dairy products, breakfast

cereals, confectionary, bottled water, ice cream, health sciences, pet food, etc.

• 468 factories in 86 countries• 330,000 worldwide employees• Products sold on almost every country in world

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NESTLÉ PURINA PETCARE

Pet Food Category– Worldwide - 324MM Dogs; 263MM Cats– Worldwide $61B; U.S. & Canada $20B

• 42% U.S. Households own a dog (1.7/HH)• 35% U.S. Households own a cat (2.2/HH)

NPPC No. 1 in U.S. Pet CategorySalesMarket ShareTrust



RESULTS

19 Consecutive Years of Sales GrowthConsecutive Years of Share Increase

Dry Dog FoodWet Dog FoodDry Cat FoodWet Cat FoodTotal TreatsLitter

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CULTURE - THE FOUNDATION

William H. DanforthFounder


CULTURE

The Four TallsStand TallThink TallSmile TallLive Tall


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WESTMINSTER DOG SHOW GRAND CHAMPIONS:EIGHT IN A ROW…



OUR VISION

A Checkerboard in every involved pet owner’s home

We stand for trust. We earn it every day as we enrich the lives of pets and the people who love them.

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FOR US … DEFINING MOMENTS

• 1990 business results showed stagnating revenue & profit

• Capabilities were not sufficient to meet the demands of changing environment

“We were working hard but not achieving desiredresults”

“Everyone came to work wanting to do what’s right …they just didn’t know what’s right”

“We did not communicate what we were trying toachieve”

T. E. Block, former COO


DESIGN & IMPLEMENTATION PROJECT (D&I)

• Commissioned by CEO

• 2 year cross-functional project

• Dedicated full-time assignments

• 3 Phases – Assessment, Design, Implementation


GOALS OF D&I

• Build on the unique culture of Purina (Four Talls)

• Identify & implement new “customer” focused capabilities; increase customer integration – Retailers – becoming larger and more influential

• Improve consumer satisfaction– Consumers – changing wants/needs

• Increase integration across all functions– Optimize systems/processes instead of functions

• Improve communication and measurement

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PRIMARY COMMUNICATION TOOL:ANNUAL “BLUEPRINT”

• Mission• Vision• Values• Objectives• Key performance indicators• Annual major initiatives

Provides the systems / cross functional

focus that allows every person in the

organization to link their role to the

organizational strategy and purpose


DEPLOYING THE “BLUEPRINT”

• Cascading from “Blueprint” to individualperformance plans

• Multiple communication devices• Corporate communications• Daily / weekly review meetings• Monthly “floor” meetings• Quarterly “all hands” meetings

• Strategy teams


KEY SUPPORTING MECHANISM…

Quality Systems:– Non-financial performance measures and systems that

support continuous improvement in customer relations, consumer products and our workplace.

Guiding Principles– Linkage: Continually evaluated by the ability to

predict/produce business results.– System-based: Implemented with systems that support

on-going decision making.– Model-based: Developed in context with an overall

conceptual model.

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TRIANGLE MODEL…

Customer/Consumer Measures

Employee Measures

Business Results


IMPORTANCE OF THE “VOICE OF THECUSTOMER”…

Define/refine strategy

Review current offerings and service processes; identify potential opportunities

Develop and deploy customer-centric measurement/improvement systems- customer satisfaction - employee survey development- full circle feedback development

Voice of theCustomer(VOC)


LISTENING POSTS…• Product Quality Function Deployment (QFD) (consumer)• Retail Quality Function Deployment (QFD) (customer)• Customer Satisfaction Measurement (retail customer)• Organizational Capabilities Questionnaire (associates)• Retailer Advocacy Measurement Project (retail associates)• Retail Organizational Capabilities Questionnaire• Internal Customer Satisfaction Surveys• Leadership Skills Inventory• Customer Integration Assessment• Pet-Decelerators• Etc.

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THE QFD PROCESS…


WHAT IS QFD GOING TO TELL US?

1. What’s important to your customers relative to a product/service?

2. How do your customers rate your product/service on these criteria?

3. How do customers rate your competitions’ product/service on these criteria?


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PUTTING IT ALL TOGETHER:VOICE OF THE SHOPPER (VOS) MATRIX

Comp ANPPCComp BComp C

Comp DComp EComp FComp G

Conducts business ethically

Is accessible, easy to contact

Is easy to do business with

Uses authority to make decisions in atimely manner

Provides correct invoices

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WE MAKE IT EASY FOR OUR CUSTOMERS TOGIVE FEEDBACK …

Tell us how Nestlé Purina Pet Care rates compared to all other suppliers


SALES EXAMPLE…

LINK

$ Sales

Customer Satisfaction Index (CSI)

Employee Measures

R2 = .22 (1992 2011)


DEPLOYING VALID CUSTOMER MEASURES …

Customer/Consumer Measures

Employee Measures

Business Results

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SALES EXAMPLE…

LINK

$ Sales

Customer/ConsumerMeasures

Organizational Capabilities Questionnaire (OCQ)


THE OCQ PROCESS…

• Developed from VOC and NPPC “Blueprint”; tailored to each function; “behaviors, processes and outcomes”

• Annual, “comprehensive” length survey (130+ items)• Work team focus (teams with 3+ associates)• Longitudinal tracking at function level only• “Strength-based” organization development: teams

identify one strength + one-two opportunities• Confidential- no demographics!• Continuous improvement- no evaluation on scores!• 92+% average response rate


THE OCQ PROCESS PROVIDES…

• Team- and department-level feedback

• Increased knowledge of functional role in implementing NPPC Blueprint strategies

• Deployment of “voice of the customer”; early warning on potential customer issues

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ITEMS DEPLOY BOTH VOICES AND STRATEGY…

1 2 3 4 5 6 7

3.00

14. NPPC makes it easy for our customers to dobusiness with us.

4.97Your Team

CDG

1 2 3 4 5 6 7

6.25

13. When I make a commitment to the customer, Ifeel that I will be backed up.

6.07Your Team

CDG

1 2 3 4 5 6 7

5.75

12. Team members feel they have the authority tomake the customer decisions they need to make.

5.98Your Team

CDG

1 2 3 4 5 6 7

5.25

11. CDG Leadership places priority on developing andenhancing integrated customer relationships.

6.17Your Team

CDG

1 2 3 4 5 6 7

6.33

10. My team’s contacts with functions outside ofprocurement have increased in the past year.

5.72Your Team

CDG


SALES EXAMPLE…

LINK

$ Sales

Customer/ConsumerMeasures

Organizational Capabilities Questionnaire (OCQ)

R2 = .38 (1992 2012)


APPROACH DEPLOYEDTHROUGHOUT NPPC

Safety, Quality,Productivity

CSI

MFG

OCQ

MKTG

OCQProductQuality

MKT Share

ORM

Fill rates, OnTime

OCQCSI

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OTHER EXAMPLES

Safety, Quality,Productivity

CSI

MFG

OCQ

MKTG

OCQProductQuality

MKT Share

ORM

Fill rates, OnTime

OCQCSI


SAMPLE MANUFACTURING ITEMS…• Safety

“We take the time to review all accidents and near misses.”• Quality

“Employees are trained in finding potential problems before they are observedby team leaders or the QA lab.”

• Customer Service“We deliver complete orders/high % fill rate.”

• Target Savings“Employees have an understanding of cost structures and how they can beimpacted.”

• Team Effectiveness“My team has a clear understanding of how each other’s roles andresponsibilities work together.”

• People Leadership“My supervisor/team leader maintains good working relationships byrespecting and cooperating with other departments.”


SAMPLE FINDINGS…

• Total production positively correlated with:– Leadership effectiveness subscale– Perceived respect and trust among team members– Perceived cooperation of supervisor with other groups– Perception of supervisor dealing with poor performance in a timely

manner

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DRY PET FOOD PRODUCTION GAINS

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


SAMPLE FINDINGS…

• Recordable injury rate is negatively correlated with:– Perception that associates take the time to review all accidents and

near misses


RECORDABLE ACCIDENTFREQUENCY RATE

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Better

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LOST TIME ACCIDENT FREQUENCY RATE

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Better


YOUR PEOPLE KNOW WHAT’S GOING ON…ASK THEM!

• Final quality is positively correlated with:– Quality subscale– Customer Service subscale– Perceptions that they provide high quality unit loads at delivery

• Consumer Complaints Index is negatively correlated with:– Customer Service subscale

• Plant controllable on-time arrival is positively correlated with:

– Perception that they provide orders on time or at the time requested– Perception that they deliver accurate orders– Perception that there are effective processes in place for

continuously improving shipment accuracy


MARKETING EXAMPLE…Safety, Quality,Productivity

CSI

MFG

OCQ

MKTG

OCQProductQuality

MKT Share

ORM

Fill rates, OnTime

OCQCSI

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QUALITY MATTERS !!!

0

10

20

30

40

50

60

70

80

6 7 8 9 10

Rating

SO

R

R2 = .72 (1999 2011)

Brands


DISCOVERIES?...

• Keep the customer at the center• Give “grace” to the past• Continuous improvement is not a “bolt on”

accessory• “Demand pull” beats “supply push”• Build ownership; minimize “externally” imposed

requirements• Generic is efficient, not effective• Integrate and link measurement systems• Don’t overburden measures

ken dean - asqasq.org/public/quest/2014/nestle-op-excel-begins-with-customer-voice.pdf · • baby...

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