CIO: What other processes did this lead to?

Drayer: The most exciting is CPFR. This grew out of continuous replenishment. We knew we needed to go beyond the customer's warehouse and start using actual point-of-sale [POS] data. And CPFR, which is now an industry standard, we helped develop.

The beauty of this process is that it not only does a superior job on replenishment but it links demand planning and supply planning together for the first time in one process. This is a nine-step process. It starts with joint business planning between the two trading partners. That follows into promotion planning and various tactics leading to a sales forecast, leading to an order forecast and concluding with an evaluation of how the promotion did so you could have a continuous improvement loop.

All through the process you're using historical POS data to better project what a particular promotion is going to develop into in terms of volume and [using that] on a daily basis to alter replenishment schedules. Very powerful process but very comprehensive, so it's been a little slower on the uptake than many companies thought it would be. This is probably four years old. A lot of pilots have been accomplished. We have it going with about 12 big retailers globally. The idea from a manufacturing standpoint is not only to get a much better idea of what's coming from your key retailers, but from a retailer's standpoint to be able to better manage the inbound flow of goods so they don't have to have a whole lot of warehouse space. Think of it as a pipeline that's continually flowing product rather than a warehouse.

CIO: How should you structure these efforts so that they are successful?

Drayer: You need a strong business leader to run it. We not only had a chairman who knew there was value if we could create a new collaborative trading relationship with customers, but we also had a senior sales executive who personally championed this collaborative, team-based relationship with retailers. He then put together a supporting organisation that would basically change our capability at the customer interface.

I had the good fortune of leading the customer service and logistics component of that capability. We created a new organisation called customer business development, which was previously the sales department. We brought into that organisation new skills: logistics, IT, finance, marketing and some HR people. We created this multifunctional organisation with a new mission: to make our customers more profitable in the categories in which we sold products. We almost became consultants to our retailers. In fact, just to give you an idea of how far that went, we eliminated the sales quota. Sales representatives no longer wrote orders; that was done by the logistics person on the team.

CIO: You blew up your sales organisation.

Drayer: We changed its look and feel. We retrained and redirected the work so that the sales representatives became category managers, category business consultants, marketing consultants. This all helped build the trust factor that I talked about earlier.