By Tom Steinert-Threlkeld  |  Posted 2006-01-20 Print this article Print

More than five years ago, the world's largest food maker set out to standardize how it operates around the world. GLOBE, or the Global Business Excellence program, is aimed at getting far-flung operations to use a single system to predict demand, purchase

: Global Project Manager; Undefined: The Project">
Shortly afterward, Johnson got a call from Mike Garrett, then head of Nestlé's Asia, Africa and Oceania markets, and a member of the executive board that had launched what it would come to call GLOBE.

Johnson, an American who stated as a Carnation products salesman, was head of one of the key Asian markets, Taiwan. His challenge: trying to promote sales of items such as probiotic milk products, which help digestion, kill bacteria and might even help ward off colon cancer.

The call was vague, to Johnson's ears. Garrett had a project in mind, but made no mention of SAP. It was a business project with some sort of global significance.

Johnson eventually signed on, even though, as he puts it, "I didn't really know what I was signing up for."

But Johnson received three baseline edicts from Garrett and Corti: Harmonize processes. Standardize data. Standardize systems.

This included how sales commitments are made, factory production schedules established, bills to customers created, management reports pulled together and financial results reported. Gone would be local customs, except where legal requirements and exceptional circumstances mandated an alternative manner of, say, finding a way to pay the suppliers of perishable products like dairy or produce in a week, rather than 30 days.

And when was this all to be done? In just 3 1/2 years.

The original GLOBE timeline, delivered to Johnson by the executive board, was to have 70% of the company's $50 billion business operating on the new unified processes by the end of 2003.

No matter that Johnson hadn't quite learned how to spell SAP yet.

Gouin got a similar call from Lars Olofsson, the executive vice president of Nestlé's European operations and Garrett's counterpart there. Gouin also had almost no knowledge of what was going on. He certainly didn't know anything about GLOBE-or Johnson.

But he did know how hard it had been to get managers in Nestlé's previously decentralized culture to work together. Even though standards and best practices had been urged by technology executives from Vevey in each of the 14 earlier SAP deployments, the company had still wound up with 14 different systems.

What could be different this time? One part of the world, Asia, had shown that market managers could work together and create a common system for doing business with their customers. They had used a set of applications from a Chicago supplier, SSA Global, that allows manufacturers operating worldwide to manage the flow of goods into their factories, the factories themselves and the delivery of goods to customers, while making sure the operations meet all local and regional legal reporting requirements. The system was adopted by Indonesia, Malaysia, the Philippines, Thailand, even South Africa, and was dubbed the Business Excellence Common Application.

Managers in the U.S. had committed themselves to a similar effort, also based on SAP software, called BEST (Business Excellence through Systems Technology). But it was Asia, where multiple countries and market heads had figured out how to resolve differences and protect their profits at the same time, that caught Corti's eye. Johnson and Gouin wound up with the burden of replicating Asia's success-with SAP software-everywhere Nestlé operated.

Story Guide:

Nestlé Cooks Up A Global Supply Chain

  • One Supply Chain, 127,000 Products
  • Signed: Global Project Manager; Undefined: The Project
  • Project Plan: Finalized; Schedule: Not So Much
  • Drafting a Project Team of Business-Unit All-Stars
  • Standardizing IT: No So Tough; Standardizing Managers: Not So Easy
  • Project Costs: Capped; Project Schedule: Changed Again
  • Rollout: Fix it as You Go; Goal: Customer Can't Feel the Pain
  • SAP Project: Global; Computing Resources: Limited
  • Nestlé By the Numbers
    Player Roster: Who's Who Among Nestlé Project Planners
    Roadblock: Regional Managers
    Hurdles Overcome: Deploying a Common Global System
    Base Technologies: Nestlé
    SAP: Not Pretty, But It Did the Job

    Next page: Project Plan: Finalized; Schedule: Not So Much

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    Tom was editor-in-chief of Interactive Week, from 1995 to 2000, leading a team that created the Internet industry's first newspaper and won numerous awards for the publication. He also has been an award-winning technology journalist for the Dallas Morning News and Fort Worth Star-Telegram. He is a graduate of the Harvard Business School and the University of Missouri School of Journalism.

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