Building a Sustainable and Future-Proof Supply Chain: Key Elements and Case Study

Heineken Europe's Supply Chain Transformation

• Heineken Europe's supply chain transformation focuses on four key areas.

• The first area is to simplify the complexity of their product and packaging.

• The second key area involves leveraging the network across the 25 operating companies.

• The third focus is on improving and harmonizing their way of working where relevant.

• The fourth area is to design a low carbon footprint in Europe.

• In the first year of the transformation, Heineken Europe achieved significant results.

• For example, they reduced unique bottles by 52% and secondary packaging by 50% through platforming.

• In functional Excellence, they consolidated 25 snop tools and teams into one, streamlining operations.

• They also established one snop team and one snop tools in Europe, and made progress in reducing carbon footprint.

Heineken Europe's Supply Chain Transformation

The Importance of CTO and TMO in Driving Transformation

• The CTO and the TMO play a critical role in driving the transformation at Heineken.

• The CTO and TMO are essential because they enable the organization to simultaneously focus on transformation and day-to-day business operations.

• Change management is highlighted as a crucial element for the success of the transformation.

• The TMO has orchestrated the change management around three components, with a primary focus on leadership.

The Importance of CTO and TMO in Driving Transformation

Key Elements of Transformation

• The three key elements of this transformation process are centered around what needs to be done, the capabilities of the people, and communication.

• The first element focuses on identifying the necessary actions and changes that must be implemented to drive the transformation forward.

• The second element emphasizes the importance of developing the competencies and skills of the employees, bridging the gap between their current abilities and the future requirements of the transformation.

• The third and equally vital element is communication, which plays a crucial role in ensuring alignment and understanding at both the regional and operating company levels.

• Effective communication involves delivering a clear 'why' at the regional level, a tailored 'how' at the operating company level, and continuous adaptation to local realities.

• Additionally, feedback mechanisms are essential to ensure that the communication remains aligned with the people and their feedback is actively considered.

• Leadership, capabilities, and communication collectively form the foundation of this transformational journey.

Key Elements of Transformation

Key Elements for Successful Transformation as a CTO

• When driving a transformation, it is crucial to appeal to both the emotions and the practical benefits for the people involved.

• Enthusiasm, a can-do mindset, humility, and discipline are the key success factors for a seasoned CTO in driving successful transformation.

• Enthusiasm and a can-do mindset are essential for energizing the team and driving the transformation forward.

• Humility is important for listening to feedback, adapting governance, and ensuring alignment with organizational needs.

• Discipline and structure are vital for maintaining the right rhythm and ensuring a disciplined approach within the team and the organization.

Key Elements for Successful Transformation as a CTO

Adapting Governance for Future Needs and Risks

• The company realized that their governance needed to be adapted to better align with the organization's needs and upcoming risks.

• Feedback from the organization suggested that the current approach might be too process-driven and bureaucratic, urging a reconsideration of their governance.

• In response to this feedback, the company decided to humbly acknowledge the need for adaptation and alignment with the organization's requirements, while also focusing on the future risks for 2022 and 2023.

• The primary goal of the transformation is to establish a sustainable and future-proof supply chain, while also building transformation capability within Heineken.

• The ultimate objective is to develop a capability that can drive transformation for Heineken in the future, beyond just the current training phase.

Adapting Governance for Future Needs and Risks

Conclusion:

The transformation of Heineken Europe's supply chain demonstrates the importance of leadership, capabilities, and communication. By focusing on sustainable and future-proof solutions, companies can drive successful change while adapting governance for upcoming risks.