See More, Act Faster: Danone’s Sub-Tier Visibility Insights

Are there blind spots in your supply chain? Learn how global food leader Danone solves that problem by prioritizing sub-tier visibility in order to mitigate supply chain risks and build long-term resilience.  

Watch our on-demand webinar to learn more. Experts from Danone and Everstream Analytics share how Danone tackles real-world challenges including extreme weather and geopolitical instability.  

This session provides practical use cases and strategies on how to safeguard your entire network, uncover hidden risks with unmatched visibility. Everstream also shares its AI-powered sub-tier visibility solution that brings everything into focus.  

Ulf Venne, VP of Enablement at Everstream Analytics

Ulf Venne

VP of Enablement at Everstream Analytics

Julien Abi Khalil, Global Senior Supply Risk Manager at Danone

Julien Abi Khalil

Global Senior Supply Risk Manager at Danone

Franziska Nothofer: 

Good morning. Hello everyone. Good morning, good afternoon. Thank you for joining us today for the webinar. See More, Act Faster, Danone’s Sub-Tier Visibility Insights hosted by Everstream Analytics. All attendee lines are currently muted, but please feel free to type any questions you have into the Q&A box throughout the webinar and we’ll do our best to answer as many as we can towards the end of the session. This webinar is also being recorded and we will send you a copy afterwards. I am Franziska Nothofer, and I’m here today with our two presenters, Ulf Venne, VP of Enablement here at Everstream Analytics and Julien Abi Khalil, Senior Global Supply Risk Manager at food and beverage leader Danone, who will be guiding you through the presentation today. All right, and without further ado, let’s hand things over to you Ulf to get started. 

Ulf Venne: 

Hello everybody and welcome to our webinar. Looking forward to this session. I’m also going to be a fan today and I’m going to watch what Julien has to present to us when it comes to the actions taken by Danone. So let’s get ahead and start. Let me quickly switch here to the main presentation and I’ll just start with a very quick intro. So as you can see here, 83% of supply chains are unable to respond within 24 hours to disruption. And that is a big issue. You’ll see the average response time currently is five days. Being not fast enough, being not agile is an issue primarily because somebody else will be faster, somebody else will take the scarce resource you need, somebody else will book the shipment that still gets you to save your order and bring it to the customer, bring it to production in time so when you are not taking the opportunity, somebody else will do it. 

Therefore, reacting fast and in time is very important and Danone, as you will see, is not only doing that for their tier one suppliers and really safeguarding their business but also looking further down the line, deeper into the sub-tier so they have even more time to react. So you have the ultimate response ready before disaster even strikes because you have a lot of buffer stock to go through if you identify something in tier three. So it is reacting fast is very important. Understanding how to react fast is very important and leveraging data for it even more. And that is something that Julien is going to talk about today and I’m looking forward to this. And with that, I want to hand over to you, Julien. 

Julien Abi Khalil: 

Thank you Ulf, and good morning, good afternoon for everyone. So I’m going to take you through our journey so far with Everstream and how we are deploying the tool and how it’s helping us. So maybe if we jump to the next slide, please Ulf. So this is in a nutshell what we have been doing in the past year, year and a half so far. So we began our journey end of 2022, March ’23 to be precise, it took us almost 12 months on a roll-out with 1.5 FTEs internally. So these are the resources we captured. We also had support in the first year from Accenture as consultants on data crunching and development. So with that in place, we have at the moment 60% of our categories on the platform. So quite substantial I would say covering a big geographical span and also a big span of our procurement. 

So you can here have a bit of a look on the type of data that we needed to do in order to get everything sorted out and up on the platform from ERP data analyzing, enriching it also internally to make sure that whatever comes from SAP is also cross checked by local resources because I’m pretty sure also there is always a bit of struggle on data. So that’s something that we needed to make sure it goes hand in hand when we upload on the platform. We worked also closely with Everstream’s team into identifying our N-tier, rerunning the data until we were really satisfied from the discovery on our network, plugging things on the platform and then you get the magic so you see on the right, the kind of visibility that you have. So you have a pretty nice map for viewing and seeing your alerts on a daily 24/7 basis.So telling you everything from bankruptcies to geopolitical instabilities, hurricanes, weather predictions, Everstream definitely working with two really good guys. We always have contact with on weather. 

You also end up also with the discovery of your N-tier. So the second level of the screenshots where you kind of know your tier one supplier and your network. So kind of a spider web I would say. So you see your tier two and tier three, you are directly able to identify those stress points. So if a tier two sits between you, your tier one and your 10, maybe tier threes, then this is somewhere you need to really have a watch out and identify dual sourcing in that case because you don’t want to end up potentially losing supply because of an N-tier. You also get the benefits of dashboards. So the third layer which help you deep dive into the data because you don’t only want to wait for alerts to come, you don’t want to just wait for incidents to happen to firefight them. You want to look and predict the future to make sure that things don’t happen. So you want to not have anything happening, this is the good thing that you look forward for. 

So maybe a couple of examples that we want to share with you on the next slides that are real case scenarios. Maybe after this one. So I’ll start first with our journey so far. So as I was mentioning, we are today looking at our N-tier, network N-tier one. So we did not finalize this, still work in progress. Hopefully we finalize somewhere around 2025 the full portfolio. But the ambition is always to go beyond, which is linking today your alerts into your SNOP and ideally into your production plan. This is what you call the digital twin. You want to make sure that an alert translates into an action or scenario planning. 

So if today you have a disruption with a supplier, whatever it is, the bankruptcy logistical delays at ports, this goes into a specific material, it’s SAP code to the production plan and it tells you what if scenarios. Do you take another supplier? Do you take a longer lead time? Do you find an alternative all coming with ROIs, right? All of them telling you what kind of marginal costs would it, basically what would it cost you? So you take those scenarios, multiple scenarios, the buyer can directly identify, align it with the management and you proceed rather than waiting maybe weeks in finding a solution. So that’s the end game for us and all of the companies working with Everstream. 

Now if we go to the next slide where we have the examples. So this is something you’re all aware of when the conflict started between Israel and Hamas, we already had our N-tier identified as we mentioned. So again, not the 100% portfolio, it’s still work in progress. You start getting the alerts from on the news, but you need to get a bit beyond that. So on the right you see two screenshots actually from Everstream. They were from the EA watch that you receive whenever there’s a big event taking place, be it a war, geopolitical elections, a natural disasters, you get something very detailed from the Everstream team telling you this is the watch out, this is the record. So we kind of looked at this and said, okay, what do we do no? We looked at our tier one suppliers that are in Israel, which of course we know about, but we wanted to know who potentially would be the tier two and tier three that they source from and who also sources outside of Israel from tier two, tier three in that country. 

So we ended up with a pretty exhaustive list if we go to the next slide maybe, Ulf. So we ended up with a big list, but then we scrutinized that list, we deep dive, we micro looked into the details to make sure that yes, potentially our tier ones might be buying let’s say lemons, fertilizers, amino acids, whatever is the commodity. We took those findings from those facilities that are really close to the tension areas where the war was taking place and we transitioned them to our tier one suppliers asking them, “Can you please confirm if there would be potentially a disruption to your supply?” 

Now today, this is a challenging environment for your tier ones. I’m pretty sure you face the challenge where your tier one don’t always disclose their tier two and tier three, but when you face them with facts that you are starting to get aware and know that they might be facing challenges, they cannot just tell you no issue. They will have to guarantee that your supply is going to be prioritized potentially versus your competitors, right? Because you are the first one who’s jumping and telling them I might face a problem. So we don’t want them to confirm that this is their supplier, but at least when we tell them we confront them with data that we are doing our due diligence and our digging into an exercise as such, they will have to confirm that Danone will be prioritized and will not face issues. So that’s one of the examples that we did. 

Next one, if we go, so kind of the same idea because it transitioned, right? So we started with Israel, Hamas, but then the Houthis blocked the Cape, the Red Sea, and then ideally all the shipments needed to go through the Cape of Good Hope around South Africa. So again, the same exercise, we took an assumption, we put that red line where you see any potential supplier we considered tier two, tier three, even tier one that is beyond that line to the right, then automatically they are not able now to access Europe or [inaudible 00:10:38] through the Red Sea and they have to do the full turn through the Cape of Good Hope. 

So tier ones understandably easy because you know them and they are going to tell you how they will react. But you go and beyond that level and you find out which categories potentially are going to be disrupted at tier two, tier three, not today, not tomorrow, in two or three months from that instance. And you go engage with your tier ones and tell them heads up, “Are you going to face a challenge?” Which happened with automotive industries at the start and then transitioned to FMCGs and et cetera, other industries. So again, also using the capabilities and the insights and findings out of Everstream into doing this exercise to mobilize internally our buyers. 

So I think from my end, if there’s anything else can we see beyond this slide? And also just to show you what kind of data you get. So when we were doing this Red Sea exercise, so all of the red dots for example are the identified tier three suppliers for Danone. So you can see your tier ones are identified. Tier two start to get a bit more. Then your tier threes are extensively much more around the word scattered. So pretty detailed exercise and findings on your dashboards where you can leverage this data. 

And last just to also showcase what kind of insights and inputs you are getting from Everstream. So as I mentioned, we run couple of sessions during the year on weather and there are also newsletters that you can subscribe through Everstream on your platform. We go and check them on a weekly basis, even daily there are updated, buyers are always looking there. We also get those recommendations specific to Danone on where to act now based on the weather impact and potentially where at the moment because we’re transitioning from El Nino to El Nina to La Nina, where would potentially have dryness risks and where would be wetness risks. So these are also insights that are really important for our buyers and for commodity management. And I give the floor back to you Ulf. 

Ulf Venne: 

Good. I think I’m not muted so I can directly take over. So as we just heard, agility is key. So being able to react fast and be a first responder is always very important. And again, if you are able to tell your supplier that you are on top of this, they have to give you the source commodity, the capacity you need and so on and so forth. So being a first responder as we started the session with is always very important and part of today’s agile supply chain. So you can see that there are a lot of new focuses on supply chain management. The traditional ones like service, quality, cost and capital. These are just things that are now a given. You need to have that. But then new to this picture is agility, being able to respond to problems fast and be able to act on them. 

Resiliency. So looking at your network holistically, be able to understand potential future risks and shaping risks so you don’t face unnecessarily, right? We learned from Gartner that disruption shapers are able to slice off more than 70% of their problems over time by building a more resilient supply chain. So you have to less work on data crunching and burning out employees firefighting if you work on strategically derisking your supply chain. And then obviously there’s a big portion of sustainability that is getting more and more important. And we see some of the impacts of climate change just in various floodings right now around the world, no matter if it’s China or Germany. And then there’s also the human rights aspect of it, which is very important and very dear to everyone’s heart that needs to be managed properly. And now that there is an ability to build the visibility into the sub tiers, it is getting easier to do it and therefore it’s also becoming more and more an obligation. And laws like CSDDDD are paying that due diligence, so saying you have to now do it. 

Okay, obviously it shouldn’t always be all about fulfilling a compliance because that’s just, I mean that’s a given. And also ensuring human rights should be logical for everyone, but it should also be about making money with it or saving money through an initiative, right? And the good thing is if you use a system like Everstream, you can do both at the same time. You can operationally ensure, like Julien did, supply. Talk to suppliers and so on. But also you can work on the human right aspect because it’s all the same data and it’s super efficient to do both at the same time. So you drive value by reducing raw material sourcing costs, you reduce production costs because you don’t have so many production outages. You reduce your logistics and transportation costs by reducing the air freight spend you need because you don’t have so many non-planned exceptional shipments. 

You also can work on your inventory over time because sometimes you have an overspend on risk management because you have a dual source where you don’t need it, you have a too high inventory where you don’t need it. It varies by industry. Some are better in this, some are worse. But in general we can see that people are slicing off a little bit here and there if they really start doing these value chain analytics. And then obviously there can be contractual penalties and then you can also not have stuff on the shelves. I mean for example, food and beverage that the first time since World War II we had in the USA not enough products on the shelf and that obviously was a big blow for companies. 

And if you can excel and have things on the shelf, then you might not only be able to avoid the lost sales from the clients at any way, who were already buying from you. But you can maybe switch over others that have bought something from a competitor in the past and they realize, hey, your product is way better and that’s how you can then even increase your revenue. And that is a very important part because risk is obviously not only a problem, it’s also an opportunity. So if you’re faster, you react faster, you react more resilient, you can be better than your competitors as many of our customers have shown in the past. We have also had press releases from big automotive companies that accredited their growth due to supply chain stabilities and the ability to deliver where others can’t. See it as a investment in sustainability, see it as a value driver for pure rational performance and also see it as a growth engine because more resilient companies overall can grow their business by 20% more than non-resilient companies. That was one of the latest studies that we have found on this topic. 

So overall very exciting. It’s good to do a data driven, it’s good to really deep dive on the data and react fast and then also use it to build resiliency. And because Julien has already shown you how he’s using it on a daily basis, we also thought it’s a good idea to maybe just show you the systems to give your impression on how that can work on a day-to-day basis. And we’re going to do that right now. So we’re switching to this which is the entry point into Everstream analytics and you can see here that are currently sorted for incidents. So things happening right now and you see here incident scores which gives you a priority based on your own setting. So you tell us how important something is to you, the thresholds to it, and then we can build a scoring together with you that fits to your liking. So you have a prioritized list like this here. 

And because I’m actually now living in the west of Germany, but I am coming from the south of Germany, I actually wanted to today talk a little bit about the disruption that is currently going on in Bavaria and where I’m coming from. And it’s a very unfortunate event obviously, but it also showcases perfectly or can work on these events of a large scale. So what you can see here right now is that in this network we would have six suppliers being in the area and the more I zoom in, the more granular it gets. But actually I want to make it a little bit less granular because it’s also we can add sub tiers to the mix and you’ll see that there’s a plethora of a lot of different companies being there. But for this example, let’s focus on maybe I’m going to now look at it not in this great geographical view, which is good to give me a first impression, I’m going to look at it in a tiered view. 

And what I see here is that we have now all of these suppliers feeding into this Poland manufacturing here in Poland and to Poland Motors manufacturing in the UK and they build these products obviously that is customer fed data. And then you see here some of the sub tier suppliers being affected as well that we discovered for our customer using AI technology. But actually I want to focus today on the tier one because I want to show one trick that you can use for flooding identification to deep dive very quickly because as you can see here, you have various suppliers being affected. And I can look now at Brose and I already see the incident risk scores very high because currently it’s in the area that is affected. But I can go and look at the strategic risk scores. So I can see here now how is it going to continue. 

I can actually go to precipitation and see if there’s more rain coming. But for this specific location, it’s actually not that much of a problem because while the flash flood risk is a six, which in our system for strategic, the likeliness of them to be affected by a flood and a flash flood, both are very considerably low, right? One and six means theoretically this location should be up on a hill and currently should not be flooded because the data that we source tells us clearly that the risk of flooding here is not very high, it’s too far away from a river. So I can go back to the same. So you already have started your due diligence on this. I go back to the incident again in a different view now and I can now look at another supplier and this one. 

I’ll take this one now, which is in Ulm. And looking at this supplier, I could actually zoom in and already see the problem. You see the problem already here, there’s a river and it’s a Danube. And you can also see on the strategic score that the flood risk is actually a 25. So it’s extremely high and very likely that it’s getting flooded. So what I want to say is this would be the supplier I would call first because that seems like a hit essentially. And this is the interplay between something happening right now and then leveraging strategic risk scores to further validate it. Obviously the strategic risk scores that we have for natural disasters, operational risks, political violence, social political issues, sustainability and risk to individuals. These can be also used for other things like onboarding new suppliers. Again, if you work on continuously build more resiliency by onboarding suppliers that are more resilient, you will have less alerts you have to care about and that will help you overall in the maturity of your supply chain management. 

So using it in the onboarding process is a thing. You can also use it in logistics for identifying good distribution centers to use and warehouses to use. Ports, you often don’t have a choice, so it doesn’t really help there. But for the others you can really use it in the onboarding process. And then if you look at your strategic risks, especially on tier one, you can also use these scores in your strategic meetings to understand do I want to keep the supplier, do I want to look for an alternative? Do I want to develop jointly with him? For example, build better flood protection measures. All of that is possible because you all of a sudden have the visibility and you just have to build that into your process essentially. So the data is there and now it’s about building the process around it. And we have a lot of customers that, for example, have already these strategic meetings around their tier one suppliers as a commodity group and then they just incorporate this new visibility into their decision-making process when they look at suppliers that might run out of contract in six months. 

So a great way of leveraging data and then obviously already hinted at it, but I just want to make sure we all have seen that so very clearly, I’m going to a supplier that currently is actually not disrupted and I’m looking at the map real quick. So we can identify using AI and a lot of different data sets all around the world, public and proprietary data to work on building sub tier relationships out. So I can go to BorTec and see all their sub tier suppliers in the network. You can see that they’re working with three together. But then you also see here all the sub tier suppliers and you can also see the risk scores attached to them. 

And you can see here the 17 across all sub tier suppliers means they’re all a little bit of a problem because actually, frankly most of them here are either in Bavaria where it’s a flooding right now or they are in involved in the Israel Gaza conflict. So it’s very interesting to identify that that BorTec itself might be green, but otherwise there’s a high chance of disruption when it comes to the broader network. And then you can get that kind of data from us via email alert or and so on and so forth. So there are many different options to interact with the platform. We can also send it into other systems if necessary. And with that, I wanted to conclude this part of the session. And what [inaudible 00:25:49]- 

Franziska Nothofer: 

Oh, did we lose Ulf? We lost him. Okay. He can log back in. And in the meantime, thank you both for the great presentation. For both to dive into the demo today and showcase the capabilities. We have some questions that just came in from our attendees and one is for you Julien, basically, “How do you at Danone proceed to achieve proactivity? What is the degree of visibility and reliability of the data that you get through Everstream?” 

Julien Abi Khalil: 

Yeah, good question. I think today, let’s start with the credibility and the data that we get through Everstream. So tier one for example is our data. So this is your starting point and these are your tier one suppliers, you need to feed them to Everstream. And with that you start the exercise into the N-tier discovery. Now you go through multiple rounds. So you need to reach a level where you are accepting enough that the data you get from Everstream on the N-tier discovery of tier two first is good enough approved and signed off by the buyer to proceed into putting it in the platform and then discovering your tier three network. Now it’s not always easy and it depends by category. So some categories are easier than other to identify their extensive network. Some are huge in thousands of N-tiers. So you also need to be selective of what you want to put on the platform and it’s a test and learn. 

So this is directionally. Today, like we mentioned, your tier one suppliers mainly are not going to tell you, “Yes, we sign off on the tier two, tier three that you discovered.” Otherwise they could have gave them to you. But that’s the best approach at the moment we have into monitoring our potential tier two, tier three network. And like we mentioned, I circle back on the test and learn, you put them on the platform and you start seeing the kind of alerts you get from Everstream. And with the machine learning they have in place along with the consultants and the team who’s sitting there cleaning the alerts, we start taking out potentially tier threes or tier twos where we were not very confident that they are within the network of that tier one. And some of them we sign off and we say, yeah, they stay on the platform. So that’s the approach we take today. Now on productivity, it’s a journey. So you have to start with your, we’re still at the beginning I would say. So it’s something we are still working on to put in place. 

Franziska Nothofer: 

Brilliant. That was very insightful. Thank you. Julien. We have another one coming in. “How do you engage in business continuity management processes with your tier N?” 

Julien Abi Khalil: 

So we don’t go to our N-tier, yeah, we go to our tier one, let’s say. So the N-tier we engage with our tier one, definitely there’s a big process in place. So it’s not only Everstream one piece of the puzzle, you have multiple layers that you need to put in place in order to engage with your N-tier. So it starts with the BCP checklist, partner for growth program for example, we have. We have another program which is called Partner for growth. So there are a lot of elements being done within Danone to engage your suppliers, your tier one suppliers, build that trust and also make sure that they are doing the right job to cover themselves in order to cover us. Yeah. 

Franziska Nothofer: 

Perfect. Thank you. Brilliant. Okay, we have another one coming in from one of our attendees. Basically on headcount. “Do you have a dedicated resource to manage the tool as there are quite some events to investigate on an ongoing basis?” 

Julien Abi Khalil: 

Yeah, so as I mentioned, we have at the moment one FTE that is managing the tool. That’s at the moment, and it really depends of what you want to do because today it depends also on the structure of each company. So today Everstream can be embedded from end-to-end perspective into your supply chain, but the buyer is mainly the one responsible for his supplier. So we are in supply risk, so we do the discovery, we kind of lead the implementation of the platform, of Everstream rollout trainings, making sure everyone is trained adequately in order to use it. But it goes to the buyer by category to manage this category because they are the experts, right? Today certain alerts very specific by supplier might mean a disruption for the buyer and they might not mean the same for the FTE we have, right? Because he will not be able to be able to process thousands of alerts across multiple, 20, 30 categories. 

Franziska Nothofer: 

No, that makes complete sense. Thank you for diving into that as well. I’m just conscious of everyone’s time. We have a few more questions, a lot of interesting questions coming in. We can get back to you on those offline. Thank you everyone for asking all the engaging questions and we are now slowly coming to the end of today’s session. We will send out the recording within 24 hours. And if you have any other questions after this session, please reach out to [email protected] and our team is more than happy to help and dive deeper into any questions we couldn’t get to today. Thank you to Ulf and Julien, has been a great webinar today and have a great day everyone. And with that we will close the session. Thank you. 

Julien Abi Khalil: 

Thank you. 

Ulf Venne: 



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