Comparison Of Lion Dairy And Drinks

Dairy & Drinks SAP Journey and Future Direction

25 May 2011

Raymond John IT Director – Dairy & Drinks

May 2011

AGENDA • • • • • • Lion Dairy & Drinks Overview The Challenge in 2006 Transforming the platform Acquisition Next Steps Lessons Learnt

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KEY FACTS
• Lion Dairy & Drinks has two main channels: ‒ Grocery (Woolworths, Coles, Other independent supermarkets) which accounts for 56% of net sales; and ‒ Convenience & Food Services (CFS) accounting for 44% of net sales • Private Label brands are significant in grocery (53.7% of fresh/UHT milk) and growing. This places pressure on branded players due to the price differential • • CFS is a highly complex channel consisting of over 100,000 stores, each with differing needs
The CFS channel has an equally complex distribution model which consists of a network of distributors, franchise owners and wholesalers • Lion Dairy & Drinks has Australia’s only national chilled distribution network which presents opportunities to leverage this competitive advantage

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BRANDS
Milk (White and Flavoured)

Category Rank

#1

Dairy (Yoghurt and dairy deserts)

#1

Juice #1 (Chilled and ambient)

Cheese (Everyday and Specialty)

#1

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GEOGRAPHIC

Malanda (Milk & Cheese)

Booval (Milk) Vitasoy JV (Soy) Leeton (Juice) Riverland (Juice) Murray Bridge (Dairy & Cheese) Bentley (Milk and juice) Clarence Gardens (Milk) Jervois (Cheese) Salisbury (Milk) Shepparton (Milk)
Divested (FreshCo) Other JV National Foods Dairy Farmers

Lytton (Juice) Crestmead (Milk) Hexham (Fresh Milk, condensed milk and desserts, cottage cheese and milk powder) Penrith (Milk) Lidcombe (Milk and dairy) Baulkham Hills (Perfection dairies) Wetherill Park (dairy, sour cream and bottle and carton UHT) Smithfield (Juice) Canberra - JV with Bega (Milk and cream) Campbellfield (Cheese) Chelsea Heights (Milk) Morwell (Dairy) Kings Meadow (Cheese)

Allansford (Cheese) Simpson (Cheese) Cobden (Milk) King Island (Cheese) Burnie & Heidi Farm (Cheese) Lenah Valley (Milk)

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AGENDA • • • • • • National Foods Overview The Challenge in 2006 Transforming the platform Acquisition Next Steps Lessons Learnt

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COMPLEX PLATFORMS

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SILOS THROUGH ACQUISITIONS

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A CASE FOR CHANGE

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SETTING THE
STRATEGY

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AGENDA • • • • • • National Foods Overview The Challenge in 2006 Transforming the platform Acquisition Next Steps Lessons Learnt

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WHY SAP?? • Functional capability – core & advanced modules • Industry expertise (global beverages) • Enterprise solution (single instance)

• Major Solution delivery partners
• Commercial value (under San Miguel)

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IMPLEMENTING THE CHANGE

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TBT PROGRAM

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FINAL LANDSCAPE

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END TO END

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OUR CHALLENGE…..

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BUSINESS PROCESS OWNERS NETWORK
D2D P2P Payments H2R

1. BP Owner,
P2P Corporate

strategy

O2C Orders

2. BP Capability Leaders, process design & people engagement

3. Workplace Functional Champions, process implementation
P2P Agricultural

4. BP Improvement, governance, standards, facilitation

O2C Logistics

5. Line Managers, drive & sustain process change
P2M Manufacture

6. Project Teams, engage & communicate with the network

O2C CFS Sales

P2M Plan

O2C Grocery Sales

O2C Cash

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BPO CHARTER
• protect the integrity of the defined Business Processes • provide business ownership to Business Processes • facilitate decision making from a broad range of stakeholder input

• ensure that all business stakeholders gain access to IT resource
• govern activity in line with the IT Strategy • prioritise approved Business IT requests • be accountable for approved activity

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INSTITUTIONALISING THE APPROACH

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AGENDA • • • • • • National Foods Overview The Challenge in 2006 Transforming the platform Acquisition Next Steps Lessons Learnt

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NEXT PHASE

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INTEGRATED PLATFORM
The integrated platform delivered on: •One customer one invoice •Single source of the truth
Vendors
Portal Portal

Customers

Customers

Vendors

•Collections management (working capital)
•Cost to serve automation and visibility •Indirect sales visibility

Dairy Farmers SAP 4.5B

National Foods SAP ECC6

Portal

Customers

Vendors Vendors Vendors

•Improved forecast and statistical visibility

One Platform SAP ECC6

•Improved communication with farmers and suppliers
•Milk management and reporting •Improved fridge fleet efficiency OCI business benefits that are IT dependent amount to a total $14.2m

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AGENDA • • • • • • National Foods Overview The Challenge in 2006 Transforming the platform Acquisition Next Steps Lessons Learnt

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NEW LEADERS, NEW DIRECTION
LION • Beer, Spirits, Wine, Australia
(Formerly Lion Nathan Australia)

• Beer, Spirits, Wine, New Zealand
(Formerly Lion Nathan New Zealand)

• Dairy & Drinks
(Formerly National Foods)

• Balanced Business Strategy • Balanced Business Plan • Great People • Great Brands • Customer Engagement • Lion Way

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NEXT STEPS

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Lion Dairy & Drinks - Balanced IT Investment Program

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LESSONS
LEARNT
• Business Alignment – be focused on what you promise • Process • People • Capability • Data • Change Management is for life

• Own your own risk, don’t outsource
• See the world through all lenses, (Lion, Customers, Consumers & Community) • Don’t give up your business strategy due to threats & opportunities • We have completed only 20%
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