At a Glance
A leading food processing business in the Philippines faced challenges in sales and marketing effectiveness and supply chain management due to its existing management control systems (MCS). To address these issues, they partnered with Renoir Consulting to implement a new MCS and develop their team’s capabilities. Project ‘Everest’ delivered significant results, including substantial annual cost savings and a rapid project payback, ultimately leading to a re-invigorated organisation focused on delivering premium quality and excellent service.
Key Results
- Implemented a new MCS and trained staff at 870 CTG outlets and 170 supermarkets across the Philippines.
- Achieved annual cost savings of over $2 million (US).
- Realised sales increases of 20% at pilot stores within three weeks of implementation, with the project paying for itself within 29 weeks.
Background
The client is a large, privately-owned, vertically integrated food processing business based in the Philippines. They supply chicken and other food products throughout the country. Their primary retail operation offers freshly cooked chicken directly to consumers. Other divisions within the group supply fresh and frozen chickens and other food products to retail outlets. A subsidiary serves as the client’s main supplier of chicken and other food products, forming part of their vertically integrated supply chain.
The Challenge
The client recognised that underperforming areas within their sales and marketing functions and their supply chain were hindering overall business effectiveness. An analysis highlighted opportunities for improvement, particularly concerning their existing Management Control Systems (MCS).
The company’s management aimed to develop a new MCS that would become a core competency, driving improved performance levels across the organisation. Specifically, there was a need for better forecasting and planning, more effective control (especially regarding leakage), and enhanced reporting of key performance indicators at all management levels. For their main supplier, key issues such as the level of leakage, the proportion of branded versus unbranded sales, the average selling price, and merchandising costs required attention.
What We Did
Renoir Consulting adopted a structured approach to address the client’s challenges, initially focusing on the client’s venture outfit through their standard methodology, including the creation of a client Task Force of five managers who worked alongside Renoir consultants and engaged in Renoir’s trademarked Focus Process™.
The project involved gaining a deeper understanding of the existing MCS, identifying and quantifying opportunities for improvement, and outlining these in a Strategic Integration Map (SIM). This SIM facilitated the development of a detailed Plan of Implementation, which was rolled out across all regions, commencing with the 170 outlets from week 18 of the 34-week project.
Recognising that the food processing business’s main supplier was a separate entity without an initial in-depth analysis, the client’s top team utilised the Focus Process™ to identify key business opportunities. Three senior managers from this main supplier developed a SIM that highlighted the financial benefits of addressing specific issues such as leakage, branded versus unbranded sales, average selling price, and merchandising costs. Consequently, Project ‘Everest’ employed two distinct yet complementary approaches to deliver benefits across the group.
Implementation progress was reviewed monthly by a Steering Committee, chaired by a Senior Executive, which included Senior Departmental and Operational Executives. This evolved into Regional Manager’s Meetings where performance was presented, and actions to achieve targets were discussed.
For their retail outlets, the new MCS focused on improving fundamental business operations by providing a Planning Board for each outlet, tracking hourly and daily performance to enhance forecasting and stock control.
This data fed into a comprehensive evaluation of current and historical performance. To ensure the sustainability of the changes, 15 training videos and 44 operating procedures were also created. For supermarket accounts, a similar MCS was developed to consistently manage all the client’s products within each store.
Effective audit processes, tailored to each company’s unique requirements, were established, with a shared emphasis on tracking performance at the retail outlet level. These audits became a key component of the KPIs for Supervisors, Managers, and Executives.
Ready for a change in your organisation?
The Results
Project ‘Everest’ delivered significant positive impacts for the client. Within three weeks of implementation at pilot stores, sales increased by 20%. The implementation of the new MCS and the associated training led to annual cost savings exceeding USD $2 million. The client experienced a re-invigoration, with a renewed focus on consistently providing premium quality products and excellent service.
“As a result of Project “Everest”, within three weeks of implementation, sales increases of 20% were attained at the pilot stores and within 29 weeks from inception the project hadpaid for itself. Managers and Supervisors have increased their understanding of key business drivers and opportunities, have established new working practices and management controls and, as a result, have delivered beyond expected sales and profits.” – President and General Manager, the client’s venture outfit.
Managers and Supervisors demonstrated an increased understanding of key business drivers and opportunities, established new working practices and management controls, and ultimately delivered results that surpassed expected sales and profits, according to the client’s President and General Manager. The new MCS improved forecasting and stock control through detailed performance tracking. The development of similar MCS for supermarkets ensured consistency in managing all the food processing business’s products, and the established audit processes reinforced performance management across all levels.
Connect with us
Let us work with you to achieve exceptional results.
