CHIPITACHIPITA RussiaRussia Yiannis N. Krallis Director General 1 11/29/2007 BACKGROUNDBACKGROUND • Chipita is a Greek origin multinational Company producing and commercializing packed flour based snacks such as: croissants, cakes and bread chips with turnover in excess of 1.5 billion Euro. • Established in 1973, Chipita brands are presented in more than 35 countries with production facilities in Greece, Russia, Poland, Romania, Bulgaria, Mexico, Portugal, Egypt, the leader in all markets where present. • The main international umbrella brand is 7Days. 11/29/2007 2 COMPANYCOMPANY PROFILEPROFILE As of September 1st, 2006, Chipita merged with: ¾ DELTA, Number One in the diary industry ¾ GOODY`S, Number One in the foodservice industry, and ¾ GENERAL FROZEN FOODS “BARBA STATHIS”, Number One in the frozen food industry to establish VIVARTIA - Number One food company in Greece, ranking 35th in Europe with 35 factory units throughout 16 countries, and over 13 000 employees. 11/29/2007 3 BACKGROUNDBACKGROUND • In Russia, Chipita is a Leader of croissants under 7Days brand (with almost 80% market share), presented in main soft cakes segments. • Chipita manufactures 50 SKUs mainly croissants, cakes, pastes and salted snacks; and contracts for TANDER and DANONE. • Chipita Russia employs 750 people • Business activities: all Russia regions, • Commercial companies in: Ukraine, Byelorussia, • Exports activities: Serbia, Czech Republic, Slovakia, Poland, Hungary • Production facilities located in Saint Petersburg. 11/29/2007 4 CHIPITACHIPITALOGISTICS RUSSIARUSSIA Can one explain how a small, by the vast, Russian Geography Standards Company, can survive this Supply Chain and Logistics Marathon? We have been accused of bad service, of low deliveries ratios, we have even been de-listed from KA at times. 11/29/2007 5 CHIPITACHIPITALOGISTICS RUSSIARUSSIA Simply because we tried to do things without an action plan or clear outlook “understanding” the particulars of the market. From the beginning I will state that what makes or breaks a company is Logistics. 11/29/2007 6 CHIPITACHIPITALOGISTICS RUSSIARUSSIA What we do or at least what we try to do is : • Coordinate the integration of the entire supply chain from purchasing of raw material through manufacturing and distribution to the customer ; a process that can yield significant improvements in efficiency, productivity and, ultimately, service to customers. This integration also allows for optimization of total inventory — raw material, work-in-process, finished goods, associated packaging and supplies. 11/29/2007 7 CHIPITACHIPITALOGISTICS RUSSIARUSSIA • Develop plans to carry out corporate and marketing objectives in the physical distribution system configuration and eventually staffing and performance. • Determine and benchmark current productivity and costs through physical distribution cost audits. • Obtain transportation cost reduction through consolidations, rates negotiation, and costs analysis. • Establish optimal logistics functions, operations and facilities through selection of distribution channel and consideration of sales and marketing issues, as well as logistical issues of sourcing, production, warehousing, stocking, and delivery. 11/29/2007 8 CHIPITACHIPITALOGISTICS RUSSIARUSSIA • The idea is to be open minded to the particulars of the local market and be well prepared on the endless documentation & certification needed. • Train people to service not to function. • Have simple Logistics procedures minimizing traffic . • Use well known, proven Software. And, of course, in order to do all these have a Logistics Team that can: 11/29/2007 9 CHIPITACHIPITALOGISTICS RUSSIARUSSIA • Identify supply chain strategies that can be used to increase revenue and/or reduce costs. • Perform an audit and analysis of current operations from suppliers to customers. • Develop operational designs and integration planning on: -Forecasting -Receiving - Inventory control - Production planning - Distribution management - Warehousing -Customer service - Transportation • Oversee the establishment of KPIs to monitor performance of the supply chain. 11/29/2007 10 Thank you, 11/29/2007 11.