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Created with Fabric.js 1.4.5 0 NET COST CHANGE 1 1 Why is it important? improve profitability Supply Chain has on improving It is used to report on how the Supply Chain is delivering on it measures the direct impact the its commitments to What is it? the profitability year on year much 15FBP vs 14ACT Things to pay attention to in 2015... ELEMENT $M CIP (gross) 62 Cost Actions 31 General Inflation (15) Strategic Investments (7) Inventory Adjust 0 One Time Items Other SC Costs 2 (14) (26) SLOB NET COST CHANGE TARGET Driven by either Commodity or General elements eg material prices $ Strategic Investments General Inflation Driven by either Commodity e.g. material prices e.g. wage cost increase Spend to develop capabilities that drive new business growth or substantially enhance existing business One Time Items Non-recurring items in the current period Inventory Adjust Includes 2 elements Full Absorption Adjustment and Revaluation Other SC Costs Includes such costs as PII, PPV, Duties, MD & volume overhead leverage Cost Actions Can be both positive e.g. cost savings that do not meet CIP criteria or negative cost increases CIP Definition The difference between current year actual costsversus costs of a prior period that results froma specific decision or action related to abusiness improvement initiative Cost reduction savings will measure the absolute savings resulting from these initiatives. exclude one time implementation costs Benefits will These benefits will not include reductions that are uncontrollable (e.g. devaluation in currency). 15 FBP CIPBreakdown Source - DM Source - EM Make QA values at 15FBP Fx Rates $33m
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