Tiger Brands: Integrated annual report 2019

We made some progress this year on our strategic ambitions and milestone targets to unlock costs and cash and deliver cost leadership and optimal working capital. By delivering efficiencies in packaging and ingredients, we secured procurement savings of R233 million. We delivered R193 million in manufacturing savings through plant and process improvements, as well as R15 million in logistics savings. Improvements in indirect spend resulted in savings of R53 million.

We have agreed ambitious savings and efficiency targets for FY20, underpinned by a range of activities to deliver on these targets across our supply chain. We will continue optimising centralised procurement, realising manufacturing savings, optimising our inventories to reduce working capital, extending payment terms to worldclass benchmarks, and driving zero-based spend initiatives across the supply chain.

Progress was made this year in terms of customer service. We achieved on-shelf availability of 97% and progressed in embedding a common profit, sales and operations planning (PS&OP) process by improving capabilities and entrenching systems across the business. We have streamlined demand planning to a single planning process and introduced product management review processes.

For the year ahead, we have prioritised various activities and milestone targets aimed at further optimising our processes, ensuring product on-shelf availability at all times, embedding a customer service mindset across the business, and meeting speed-to-market deadlines for innovation execution.

We are investing in manufacturing sites and will be engaging with key customers to implement collaborative forecasting and joint business planning. We will further embed our planning processes with the aim of ensuring more accurate forecasting.

We have implemented various initiatives this year aimed at leveraging our scale and increasing our responsiveness. These include investments across the group’s portfolio with various projects aimed at efficiency improvements and increasing capacity. For example, commissioning a new oat mill as part of Jungle’s capacity expansion and automation of Jolly Jus lines in Exports.

For FY20, numerous capital expenditure projects have been approved to upgrade manufacturing facilities, expand production capacity, deliver enhanced efficiencies, and/or provide for product and process innovations, safety and sustainability to support brand growth. These include product and packaging innovation across the portfolio, a generator project to provide business continuity during load shedding, and various automation projects to increase efficiency and reduce costs.

We are committed to delivering digital optimisation and providing integrated IT and information solutions to meet our growth ambitions and realise our vision of developing an integrated supply chain recognised as best in our industry.

We are developing a digital roadmap that will harness artificial intelligence, real time data, IoT (Internet of Things) and big data analytics to boost productivity, deliver operational efficiencies, ensure compliance and enable more informed data-driven decisions. We have agreed a digital roadmap that will assist at delivering improvements in stock availability and inventory modelling, ensure better traceability across the supply chain, enhance forecast accuracy, and improve customer collaboration.