Working together in New Ways: Mindy Thompson-Sherwood, P&G Jeff Bornino, Kroger

In this, the final installment of a three-part look at how leading retailers and suppliers are implementing key findings of the Global Commerce Initiative, “New Ways of Working Together,” a white paper that redefined the rules for how sophisticated trading partners pursue strategic growth opportunities, Drug Store News interviewed Mindy Thompson-Sherwood, Kroger team leader for Procter & Gamble, and Kroger’s manager of supply chain initiatives, Jeff Bornino, on the approach their companies are taking.

Drug Store News: How have you implemented New Ways of Working Together at your companies?

Mindy Thompson-Sherwood: The way that we’ve approached it is to start with strategic alignment at the top in terms of what the areas are that just make the most sense for Procter & Gamble and Kroger to be working on together, both looking at traditional and nontraditional areas of work that a consumer packaged goods company and a retailer might have. A traditional area would be something like merchandising. A nontraditional area might be something like the Network of Executive Women, for example, [which works] on inclusion and retention of women [in the retail and consumer products industry through education, leadership and business development].

From there we aligned on common business goals. We always say we’re looking for a triple win—it needs to be a win for Kroger, a win for Procter & Gamble and a win for the shopper.

Jeff Bornino: I would echo Mindy’s comments. The focus on the customer drives everything that we do, and because both organizations believe in that fundamental principle, it made the collaboration sessions much more meaningful. Any New Ways of Working Together relationship should really begin with a focus on the customer and incorporate cross-functional collaboration.

Thompson-Sherwood: Once we were aligned in the areas in which we wanted to work together, we then set joint targets and goals. That piece is important. … One of the very best examples of us working together that fits under the New Ways of Working Together umbrella was … to take costs out of the supply chain and to then reinvest [those savings] back into the shopper. So, we put together multifunctional teams and started an initiative to get the right product to the right store at the right time. That project has delivered savings, which we have invested back into the shopper.

DrSN: What exactly does “right-store/right-time” mean?

Bornino: It’s ensuring that when our shoppers come into the store, the product that they expect to be there is there. We obviously don’t want to carry too much inventory, but we absolutely do not want to disappoint a shopper with an out-of-stock situation. So much of our effort was designed to get that mix of products right, so that we were delivering exactly what the customer wanted in the quantity that they wanted.… There’s obviously a component there of how much inventory you hold, as well, so it’s finding the right balance without ever compromising the shopping experience for the consumer.

Thompson-Sherwood: If you look at any of the past initiatives that we’ve worked on with Kroger, we’ve always done the projects in silos.… In the business that we’re in, the high-low business, it’s more difficult to do what we set out to do than in the business of everyday-low-price. To get the right amount of product in and not load the inventory when you are high-low is pretty difficult to do, which is why this is such a breakthrough on this business.

DrSN: Is it difficult aligning those goals and targets across diverse functions through both companies?

Thompson-Sherwood: The important step that happened before we ever got together was a strategic alignment of the top executives at both companies that building a backyard partnership just makes great sense. You’ve got two $70-billion companies just four blocks away from each other; where you have “consumer is boss” as the strategy from P&G, and “customer first” at Kroger. Those strategies are so commonly aligned, that it just made good sense for us to figure out where we could go after common areas and push it further, faster. We were very public from both sides of the company that forming this backyard partnership was a big idea.