Client: Leading Consumer Packaged Goods Company

Client Situation

The AddVantage Group was engaged by a Fortune 100 consumer packaged goods company to standardize processes and controls around the company’s marketing, advertising and consumer promotions function, which represented an annual spend of $1B+ across five business units.  During the preceding three years 30% of the audits performed by the corporate parent were rated Improvable / Unacceptable.

A review of the findings identified four common concerns that needed to be addressed:

• Approval levels circumvented
• Lack of Supplier Contracts, Bids, Bid Waivers
• Lack of Purchase Orders / Statements of Work
• Inappropriate invoice payment processing
  • Insufficient invoice detail
  • Inadequate proof of supplier performance
  • Delinquent invoice processing
  • Insufficient monitoring of supplier credits

Challenges to this project included the following:

• Organizational complexity due to the multiple acquisitions and lack of integration and common business practices – groups continued “business as usual”.
• Lack of documentation for current processes
• Utilization of six different marketing systems to monitor marketing program approvals and expenditures
• Organization size drives a lot of specialization, which requires iterative interviews to understand an entire process, i.e. people only know about their link of a chain
• Abundance of data, but lack of meaningful information
• Resistance to change

Our Approach

• Interviewed functional representatives from Brand Management, Consumer Promotions, Packaging, Consumer Insight & Strategy, Advertising, Media, Consumer Relationship Marketing, Customer Marketing Services, Digital Marketing, Multi-Cultural Marketing, Kitchens, Finance, and Procurement at all locations to understand current processes
• Developed standardized forms and tools to facilitate compliance to the procedure
• Identified change management issues by functional group and location
• Identified business controls and control risks along the process continuum
• Analyzed the training materials and developed a view of the end-to-end process for the annual cycle of managing a brand – there was a lot of information on a subject-basis, but no cohesive document to present the big picture
• Developed an overview of the major marketing suppliers, including a history of industry consolidations, and obtained financial information from corporate and division finance groups to present various metrics for marketing spend
• Sourced the key drivers of the year-to-year marketing expense variances for each division
• Provided insights for the conceptual and detail design for the e-procurement system, including opportunities for process optimization
• Identified issues in the US organizational structure that compromised the control environment and prevented the degree of standardization required for adoption of the system without significant customization
• Developed documents and an implementation work plan to facilitate online, self-guided training tools
  • Developed the Statement of Work for the digital training development firm
  • Reviewed and provided feedback on the storyboard, beta, and final version of the training course

Outcomes

• Significantly enhanced the internal control environment for marketing expenditures
• Enabled realization of savings through the requirement that stakeholders can only utilize suppliers that have been authorized by Procurement through the supplier optimization process
• Identified key organizational issues required to enable implementation of an electronic procurement-through-payment system for marketing
• Standardized the business process for all marketing disciplines at all divisions
• A standardized process facilitates the future implementation of an electronic procurement-through-payment and ERP system
• Developed an online Business Controls training course for all marketing personnel utilizing a format that enables adoption by other functional groups, i.e. content is generic, illustrative examples are function-specific and can be changed for a nominal expense
• Implemented process efficiencies that:
  • Leveraged the benefits of the intranet to enable self-service; this included on-line posting of the procedure, authorized supplier lists, new supplier request form, bid waiver, sample statement of work, and Procurement organization chart
  • Eliminated the requirement to obtain approval signatures at the project level, which typically included costs from multiple suppliers and took one week or more to complete
  • Leveraged the functionality in the new ePackaging system to simply the approval process for supplier quotes