Drafting a Project Team

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

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When Nestlé's board gave Johnson and Gouin a suggested team of a dozen technology staffers, Johnson noticed one common thread: All were nearing retirement. He knew he'd need a different team.

First, he wanted a group of business managers, not technology managers, from all of Nestlé's key functions: manufacturing, finance, marketing, human resources. And from all across the world: Europe, Asia, the Americas, Africa, Australia.

He avoided any volunteers. Instead, he spent his time looking for "untouchables"-the managers no one wanted to give up. The first team had to be everyone's first team.

And they had to get to work in a hurry. Even with the time extension granted by the board, he had to have his team in place by the fall of 2000. Because by the following February, he wanted to recruit an even bigger team: 400 executives from across all disciplines and 40 different countries-users of the system that would go into place.

He would have the program's charter established and ratified by January, and he wanted his troops on the ground in February. Their task: not to deploy software or consolidate data centers. Rather, to figure out how Nestlé worked.

These would have to be people who knew how things actually worked-or should work. They would have to know how the company figured out demand for each of its products, how supplies were kept in the pipeline, even mundane things like how to generate an invoice, the best way to process an order, how to maintain a copier or other office equipment, and how to classify all of the various retail outlets, from stores to vending machines, that could take its candy bars and noodles. And allow managers to manage it all, from the Web.

"All of these things were sort of oral history across the Nestlé world, but we never put it all together at once," Johnson says. "We've decoded the DNA of how Nestlé does business."

The process for the 400, once lined up, would start with the team finding and then documenting the four or five best ways of doing a particular task, such as generating an invoice. Then, the GLOBE team would bring in experts with specific abilities, such as controlling financial operations, and use them as "challengers.'' They would weed out weaknesses, leaving the best practice standing.

And once it figured out the DNA, the GLOBE team would, in effect, be poking, prodding and, ultimately, changing it. Converting to a single, templated set of processes and information systems sounds straightforward. In reality, says Nils Herzberg, senior vice president of manufacturing at SAP, "it's a great excuse to question the processes" you already have.

At the end of that first year, Johnson, Gouin and their teams had built up the basic catalog of practices that would become what they would consider the "greatest asset of GLOBE": its Best Practices Library. This is an online repository of step-by-step guides to the 1,000 financial, manufacturing and other processes that apply across all Nestlé businesses. Grouped into 45 "solution sets," like demand planning or closing out financial reports, the practices are now online, available throughout the company, updated as necessary and commented on at any time, in electronic forums.

Sometimes, it was not possible to choose one best practice. Perhaps the hardest process to document was what Gouin would come to refer to as G.D.: "generating demand."

With so many thousands of products, hundreds of countries and local tastes to deal with, there were "many different ways of going to market" and many quite valid. Hard to fit into a single software template that would serve all market managers.

So Johnson and Gouin practiced, in Johnson's words, "a bit more tolerance" on that score. The GLOBE template would include a half-dozen or so different ways of taking products to market around the world.

But financial reporting? No leeway. The 400 executives had to come up with a rigorous step-by-step process that would not change.

In the past, salespeople used to write commitments from customers on scraps of paper and toss them over to someone in Accounting to make heads or tails of; Johnson put a stop to that. With GLOBE processes, each salesperson not only has to enter the exact numerical commitments-say, each $100,000 order-into the system personally and in clear, standardized detail, but the data has to be entered by a specific deadline each month. Otherwise, manufacturing to fulfill the order can't commence. The software that drives the system is "kind of like handcuffs in a way to make you do the right thing,'' Johnson would say in June 2005.

Some experts were brought in along the way to challenge each process. But in the end, one standard would, in this case, have to stand. Financial terms would be consistent. The scheme for recording dates and amounts would be the same. The timing of inputting data would be uniform. Only the output could change. In Thailand, there would have to be a deviation so that invoices could be printed out in Thai characters, so they could be legal-and readable. In the Philippines, dates would have to follow months, as in the U.S. Most of the rest of the world would follow the European practice of the day preceding the month.

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: Standardizing IT: No So Tough; Standardizing Managers: Not So Easy

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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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