TCO: TOTAL COST OF OWNERSHIP
Productivity is Net of Investments Required to Deliver YOY Rate
(Conversion) or Material (VE) Reduction
Note: Our function is strategic in nature and therefore does not “touch” anything after delivery, like the Pepsi plant. This part of the process is operational in nature and is considered the responsibility of the business.
NET COMMODITY INFLATION EQUATION
Identifying Components of Net Commodity Inflation
OVERVIEW OF GROSS INFLATION & NET INFLATION
Net Inflation Refers to Impact After Productivity Has Been Applied
CALCULATING GROSS & NET INFLATION: EXAMPLE
Note: in this instance, “CC” refers to “Conversion Cost.”
***Adjustment to CY Spend applied to understand the baseline spend to PY rates, but at current mix & volumes
NET COMMODITY INFLATION FRAMEWORK
GP FRAMEWORK TO REPORT TRANSACTIONAL FX
Transactional FX Impact on Raw Commodity and Conversion Cost
Note: Net Inflation = (PY Price – CY Price) x CY Volume
Transactional FX impact on Conversion Cost is not equal to Conversion Inflation
Net Commodity Inflation: Definition
Net Commodity Inflation: Calculation
NCI example
OPEX Productivity: Definition
In order to Perform to Potential on the cost side we will pay special attention to two metrics: NCI ex. Fx and Net OPEX Inflation with the ambition to deliver Net Zero Inflation on both
Ambition: Net Zero Inflation
SPEND & INFLATION
Required to be Split Between Raw Material & Conversion
