obesity education nuclear carbon green applerecyclimniglleunnipum-risingdevelopmentiraq aids chinaGlobal Changetechnology renewable revolution mobileshealthcare A 20-Year Journey bailoutwar epidemicbanks epoudrcoasztone.com Sequoia
SEQUOIA: HOW OUR CLIENTS HAVE SHAPED US 20 years ago… Sequoia was born in Steve’s dining room… …in a house similar and close to Harry Potter’s Uncle Vernon… ...in (fictional) Privet Drive. We thought we were helping to shape our clients – but the real magic was…
SEQUOIA: HOW OUR CLIENTS HAVE SHAPED US…our clients were actually shaping us!
The Sequoia Partnership Berwyn House 2 – 4 High Street Chalfont St Peter Buckinghamshire SL9 9QA Tel 01753 891400 Fax 01753 891600Dear Reader, Back in 1992… • There were ashtrays on the tables in restaurants • We navigated using large printed sheets of paper folded in complex ways • Our television was a huge glass tube in the corner of the room • Our computer was a huge glass tube dominating our desk • If you wanted to buy a book you went to a bookshop • If you wanted to buy a DVD - you were out of luck, they hadn’t been invented • If you wanted to speak to somebody while out and about you had to find a phone box • You could fly from Europe to the USA in 3 hours • You could argue for hours with your friends in the pub about which animal has the largest eyes – and never find out the answer (it’s the Giant Squid by the way) • and Sequoia was born… 1992 was a time of optimism and change – more change than we could possibly have imagined. The 1992 Summer Olympics held in Barcelona illustrate this well: • South Africa was allowed to compete for the first time since 1960 as the long shadow of apartheid finally began to recede • Following reunification, Germany competed as a single country • There was no USSR or Russian team. The Soviet Republics competed as the ‘Unified Team’ and topped the medal table • The Baltic States of Estonia, Latvia and Lithuania had their own teams • For the first time Croatia, Slovenia and Bosnia-Herzegovina competed as independent nations after separation from Socialist Yugoslavia • Federal Republic of Yugoslavia was banned due to UN sanctions, but individual Yugoslav athletes were allowed to take part as ‘Independent Olympic Participants’
But, beyond this obvious and visible political turbulence, unknown to and unseen by most of us - theworld of geeks and acronyms was about to revolutionise the world in ways that we could not imagine:• A team of engineers meeting at Fraunhofer IIS had ISO/IEC 11172-3:1993[5] approved. This is a standard for compression and transmission of digital audio files – better known as MP3• The European Telecommunications Standards Institute finalised the standards for second generation digital cellular networks for mobile communication, under the title Groupe Special Mobile – or GSM. This included the standard for sending short text messages between mobile devices known, appropriately, as the Short Message Service – or SMS• A completely unknown engineer at a largely unknown research organisation worked on a project to help researchers share documents globally using Dynatext – a generalised text markup language. Tim Berners Lee of CERN called his project W3 – or World Wide Web.Twenty years later most people on the planet rely on MP3, SMS and WWW.In celebration of our first 20 years in business - this is the story of those two remarkable decades inwords and pictures. Claire Johnson Helen Ritchie Sarah SheppardSam Shortt Francesca Rooney Steve Wall Matt RushtonGeoff Pritchard David Bosomworth Erika Biggadike Alex Openshaw
Founded in 12 members Steve’s dining Nelson German First American FirstMandela Reunification room Lady to run for public office freed complete Sequoia 2000 South Africa holds first democratic elections Rwandan Good Friday refugees start to Agreement 1992 return home1990 1994 1991 1993 1996 1998 1995 2001 1999Gulf War Oslo 1997 ends Accords Soviet Union dissolves 15 members Final China joins fighting in the WTOIn 1992 the European Union consisted of 12 member states,US $6.1 trillion GDP and 346 million people. Serbia/ EU Landfill Croatia war Directive to drive Waste Recycling Sovereignty of Hong Kong handed to the People’s Republic of China
Now the European Union has 27 member states, US $12.6 trillion GDP and 502 million people. Euro currency 25 members Russian joins WTO launched in 12 after 18 years of negotiation countries Ellen Johnson £500 billion Aung San Suu2002 Sirleaf becomes bank bailout Ky released announced in from house 2003 first elected arrest female head of UK state in Africa 2004 2012 2005 2006 2010 2011 2008 Chernobyl Iraq war 2007 2009Nuclear Plant begins ceases Tunisian Libyan flag operation protests replaced above herald the Angela Merkel Arab Spring UN Office in becomes first Geneva female German NATO expands US $40 billion to 28 members Chancellor owed by 18 Highly Indebted Poor Countries is Obama written off sworn in 27 members
A False Dawn on European Integration?Interest Rates on 10-year Government Bonds 26.9%24.5% Introduction Period of perceived integration Lehman of Euro Bankruptcy 7.2% 1993 Greece Portugal Ireland Spain Italy France Germany 1.3% 2012
The End of Boom & Bust?Global Cycle Synchronisation “Under this Gordon Brown: 14000 Government, Britain 12000 will not return to the Pre-Budget 10000 boom and bust of the Report 8000 6000 past” 9th November 4000 1999 2000 0 The Birth of 2012 Sequoia 19921983 FTSE Rebased Dax Rebased DowJ Rebased
Chinese labour wages are low compared Imports and Exports increased by over with other developed countries 2,000% from 1992 to present day But China’s GDP per capita is still far behind… USAAverage hourly wage per hour USA This has contributed to lifting ~ 625 China China In 2008, China overtook the USA in car million Chinese citizens out of poverty 1992 2010 production 18E6 cars 701990 4E6 cars 1993 China Rising1996 2008 But much more to come 1999 2002 2005 0 GDP (million USD)
London Big Bang 2005 Deregulation of Financial Markets £5,526bn$1,210bn 762 $2,703m 50 1986 360 161 0£2,495bn 46,170
To cope with the growing size and complexity of our clients...SEQUOIA: HOW OUR CLIENTS HAVE SHAPED US STRUCTURE Following Unilever’s acquisition of Bestfoods in 2000, we were tasked with determining the optimal supply chain infrastructure for the newly created company. With no ‘off-the-shelf’ optimisation tools able to cope with the scale & complexity of the problem, we decided to build our own ‘industrial’ strength optimisation tool – which identified savings of €40m per year. ...we began building own optimisation too Google Earth Images © 2015 DigiGlobe
...with enough horsepower to manage SEQUOIA: HOW OUR CLIENTS HAVE SHAPED US the biggest of projects. As our distribution strategies have grown in size & complexity, so has the challenge to communicate them effectively. Frustrated by the lack of quality mapping software available to visualise large geographic areas, we built our own software to use Google Earth to communicate the new strategy. The optimal infrastructure saved €14m. BUILDING SUPPLY CHAIN CAPABILITYourols...
Ageing Populations Europe1992 2010746 m 769 m Africa 20101992671 m 1026 m Key Wor Female (blue) 1992 Age 0 100+ years 5.5 bn Male (red) Total population
Asia 1992 2010 3.3 bn 4.2 bn 2010 Japan 1992rld 126 m 134 m 2010 7 bn
Living Longer, Retiring Earlier fallen increasedPensionable ages have while longevity has doublingLeading to a of retirement life span in the OECD With an ageing population global pension90 Retirement age and life expectancy, men, years8070 Effective retirement age Official retirement age Life expectancy6050 Austria France Belgium Spain Italy Germany Finland Netherlands Canada Australia Ireland Greece Norway UK Poland Switzerland USA Denmark Sweden Hungary Portugal Japan 1970 2010
Increasing Pension Pots7The top markets 28hold trillion dollars doublein pensions funds – 10 years agogrowingassets are $27,510 bn one thirdThis is of global GDP. Australia Switzerland Netherlands Canada U.K Japan $14,812 bn USA 2001 Pension Funds 2011
Debt Crisis or Savings Glut 3 60% But debt, as a90 percentage of assets, remains flat at circa 50%Trillions of USD 1 2 With Insurance As is well known, and other funds, sovereign debt global assets under has also grown – management (savings) the so called debt have exceeded GDP – crisis – and is now approaching 40 at almost 80 Assets trillion USD trillion USD Debt15 0% 2000 2010
Keep Borrowing to Stay in Office?Overall , the medianage of people across the world is rising Later n The average amount of yearsretirement? that people live after y retirement in developed countries has risen from 9 in 1970 to 19 today Smaller n A correspondingly larger pensions? amount of money has to be put into pension schemes to y insure an income after retirement y Gamble n Pension funds like to hold a Pension? significant proportion of government bonds – as they are considered low riskLose election and Governments sell morefind another job bonds – and Sovereign debt rises
One Size No Longer Fits All 3.75 iEnergy Diversification In real terms, there’s a “The stone age did not end because the world ran out of Don Huberts downward trend… stones, and the oil age will not end because we run out of oil” Shell, 1999 1918Continued Petrol Price Increases? 3.6 0.25 Nominal Annual 2012 1918
1981 3.50 M. King Hubbert “The biggest source of energy on this earth, now or ever, is solar. This technologyIran-Iraq War exists right now. So if we just convert the technology and research and facilities of 1988 the oil and gas industries, the chemical industry and the electrical power industry -- we could do it tomorrow. All we've got to do is throw our weight into it.” Originator of Peak Oil hypothesis Does this hint at peak oil?…until recently 2012 30.8 Expensive alternatives will become cheaper in the future 29.5 20.5 20.8 The cheapest future alternative 13.3 15.3 Cost of Energy by Source 13.8 10.5 11.5 11.3 (Pence/kWh) 8.8 9.8 10 10.8 2011 7.3 8 Onshore wind Offshore wind Solar PV Tidal Stream Wave Nuclear Gas CS Coal CS Gas 7 6.8 2040
SEQUOIA: HOW OUR CLIENTS HAVE SHAPED US Unilever challenged How much Given the Cost per Unit us to reduce changeover stock shall I supply constraints for costs without incurring pre-build for Evian water, Danone (who excessive obsolescence costs on the season ? knew of our skills for maths short shelf-life aseptic soup with letters) asked us to look at production. We cracked how to the effect of their high seasonal include obsolescence in the classic peak on forecasting and stock EBQ/EOQ calculation – and requirements. The resulting identified €700k p.a. of savings model visualised and quantified by moving to fixed cycle the risks and uncertainties of their strategic stock scheduling. builds. PROCESSES “Don’t expect APO to work well on Cycle Length (Days) day one … you really have to learn how to optimise with it, when to “Sequoia helped us identify a 12.5% fiddle with it and when to leave it reduction in our Supply chain costs – alone, when it is giving you the just by thinking about it ” good answers and when it isn’t .” Supply Chain Manager, Nestle. Global Supply Chain Director, Danone Waters. weeks Applying a rigorous approach to something Nestle had done by intuition we identified over €750k p.a. savings by optimising their line loading across multiple sites into a smooth repeatable pattern – not a bad return on a “quick question” they sneaked in during a major project.
VolumeCapacity Demand Who knows ? CostActual sales stock… but we can tell you the Week no. value that your forecasting Cost of lost sales SEQUOIA: HOW OUR CLIENTS HAVE SHAPED USprocess is adding. We have integrated our unique metric Cost of stock into Unilever’s planning Service Level process - where it is used to identify opportunities for BUILDING SUPPLY CHAIN CAPABILITY improving the forecast. “If we implement SAP & simply configure it to run how we operate today, nothing will improve.” Supply Chain Director, Nestle. Replenishment Forecasting Make Quantities or Sequence Frequency Nestle asked us S&OP S&OP S&OP S&OP to challenge existing, experience based operating Run Schedul Stock practices – we provided Strategy e precision optimised targets that reflect the reality of each SKU’s Approac characteristics by location - the only relevant metric against which to benchmark stock and service levels.
At Least 2°C of Global Warming is InevitableRio Earth Summit, 20 Years On “Negotiations have “Staying within the been very difficult 450ppm threshold is unbelievably difficult.” and very slow because of all these Sir Bob Watson-2008 conflicting interests.” Former head of the IPCCLimit to prevent >2 °C of warming UN Secretary General Ban Ki450 PPM Moon- 2012 “Today we Rio+20 Summit have agreed to hold to present levels the pollution we are guilty of.” UN Secretary General Boutros Boutros-Ghali 1992 Rio Summit Limit to prevent any warming350 PPM1960 Forecast 2050
Economic Development is an Imperative 225 USAIncreased Emissions Unavoidable? 1. Economic development is the key factor in 100% poverty alleviation, lifting developed countries out of poverty long ago – but this prosperity came at India the price of significant CO2 emissions. 2. With billions of people poised to emulate Japan the living standards of their richer counterparts, future increases in CO2 emissions seem inevitable. China% of population on less than $2 per day Carbon debt per living person (metric tons) Korea China Japan USA India GDP/capita 00% 50000 0
Waste – A Thriving Industry Consumer food wastage (kg/year)120 North America Europe Latin America North Africa S.E Asia Sub-Saharan Africa 0 40 0 % of income spent on food
“Each year in the European Union alone we throw away 3 billion tonnes of waste… amounting to about 6 tonnes for every man, woman and child.” European Commission Incinerated Recycled/composted (& other) Landfilled100%0%
Bigger Boats – Smaller WorldInternational Trade 1990’s 4,500 TEUs 1970’s 1,750 TEUs 2000’s 1980’s 1950’s 4,000 TEUs 800 TEUs1950
2006+ 20 12,750 TEUsLondon double 40 decker bus6,500 TEUs World Manufacturing Trade Volume Note: TEU (Twenty-foot Equivalent Unit) = Standard-size container 2010
Imports into EU-27 grew by over 250% 1992 2012Google Earth Images © 2015 DigiGlobe
Rise of Eastern Europe New Retail Space in Europe Eastern Europe trade 10 ($ current billion) 2011 Million sq.m Eastern Europe 2012 490 470 Western Europe 0 1990 Productivity of Eastern Europe as a percentage of Western Europe 70 1992 Current € per hour worked 150110 30 2011 1995EXPORTS IMPORTS EXPORTS IMPORTS
SEQUOIA: HOW OUR CLIENTS HAVE SHAPED US Seeing Sequoia’s “I wasn’t convinced analysis deliver valid results, that this approach would work – clients became keen to get but now I can see the results, it really does!” their hands our models. Initially these included our Excel Sandoz Forecast Manager stock functions; ultimately a full blown Safety Stock model was Further innovations requested. Incorporating input over the years have resulted templates, data sanitisation and in the deployment of Sequoia graphics, we had to ensure tools globally. this was not only robust but also intuitive A Forecast Value Add (COV)TM to use. appraisal tool, used as the catalyst to TOOLS prove the benefits of statistical forecasting, has been implemented throughout Sandoz, leading directly to improved forecasting KPIs and increased time for planners to focus on the more complex SKUs.
After honing “The Sequoia team have consistently demonstrated SEQUHOIOA:WHOOUWR COLIUERNCTLISEHNATVSEHSAHVAEPSEHDAUPSED US our web-design skills a clear understanding of our needs and tailored training during the co-development and support materials to our precise requirements. of an online procurement portal, The delivery consistently hit the mark for the participantsSequoia embarked on applying that with Sequoia’s passion for the subject matter really knowledge to our Supply Chain showing through” solutions. Global Supply Chain VP at Pepsico Delegates on our training courses BUILDING SUPPLYbenefit enormously from the insights CHAIN CAPABILITY that “playing with the variables” Now we brings enabling them to visualise have gone a step further having designed, the complexities and trade developed, created, trained and -offs of Supply Chain implemented our pioneering web- design. enabled Stock Management application. Sequoia is now supporting clients to fully realise the return on their ERP investments. Our tools facilitate setting appropriate parameters and assessing opportunities for improvement.
“The first component of social justice is adequate food for all mankind” Norman Borlaug, Nobel Peace Laureate & Agronomist Food Consumption 3600 1960s Food consumption Energy requirement (kcal per capita per day)Borlaug develops more efficientstrains of wheat, leading to theGreen Revolution 2000 1199664 1987 2012 22003300 The world provides enough 2,700 k 1968 Worldwide obesity has more than doubled since 1980 1974 As a result of 65% of the world's population live in countries India becomes Borlaug's help, where obesity kills more people than hunger self-sufficient in Pakistan becomes self-supporting in 1.5 billion people worldwide are obese all cereals wheat
1972 1996 The USA and China UN World Foodagree to work together Summit – world to help China feed its leaders agree to halve the number of people. It is now the undernourishedworld’s second largest people by 2015 food producer Global Undernourishment 1050 Millions of people 2008 Droughts and rising oil prices lead to a global food price crisis. This leads to a historic peak in world hunger in 2009h food for everyone to have 700 2010 cal/day 1970 925 million people go to bed hungry every night In the Horn of Africa where 10 million people are at risk of starvation, food is available in the markets It is just too expensive for many people to buy
Inequality Within Countries 0% 0 20 40 60 40 20 Jordan underweight overweight Turkey Mexico South Africa Egypt Bolivia Guatemala Peru Colombia D. Republic Morocco Brazil Kazakhstan Kyrgyz Republic Zimbabwe Uzbekistan Namibia Cameroon Nigeria Ghana Senegal Kenya Tanzania Cote d’Ivoire Malawi Zambia Niger China Uganda India Benin Haiti Mali Burkina Faso C. African Republic Madagascar
The Impact of Political Instability?80% DR Congo After a decade of civil war, hunger in DR Congo grows from 29% to Worse 75% of the population. Burundi% Malnutrition in 2006 Zambia Angola Ethiopia Liberia Chad Tanzania Mozambique DR Korea Gambia Armenia Botswana Congo Myanmar Nicaragua Swaziland Georgia Economic reforms and growth allow Uzbekistan malnutrition in Georgia to drop Azerbaijan from 47% to 12% of the population. Ghana0% Better 0% 80% % Malnutrition in 1992
The next generation of children in developing countries will... Life expectancy at birth % school enrolment 65.9 82 90 62.3 1990 20101999 2010 Infant mortality per 1000 births % of children underweight 97 29 63 18 1990 2010 1990 2010
Children orphaned through AIDS per year1200000 1.4 Children orphaned % Incidence of HIV infection 15-49 year olds0 0 1990 2010Achieving the Millennium Development Goals“These results represent a tremendous reduction in human suffering and are a clearvalidation of the approach embodied in the MDGs. But, they are not a reason to relax.Achieving the MDGs by 2015 is challenging but possible.” United Nations, 2012
Broadband Subscribers per 100 Inhabitants Increasing bandwidth and processor power reinforce eac Greece Core i7 950 Slovakia Czech Republic Intel 486 Ireland Hungary 2003 1991 20 Australia 2011 45 Portugal Spain 30 Austria Finland Switzerland Sweden Netherlands Iceland Korea Canada Denmark Belgium Japan USA Norway OECD Average Germany UK Italy Luxembourg New Zealand Poland Mexico Turkey0 15
ch other… 2012 1981 ...leading to a tenfold increase in download speeds in ten years… 1,000,000,000 50 1992 100,000,000 10,000,000 1,000,000 100,000 10,000 1,000 100 10 1 “In the future, computers will mutate beyond recognition. Computers won't be intimidating, wire-festooned, high-rise bit- factories swallowing your entire desk. They will tuck under your arm, into your valise, into your kid's backpack.” 0 William Gibson, 1993012 ...allowing media streaming, content sharing and improved communication.
The Internet Generation “In the future I expect the commercial sector to target little children with their full en THERE IS ABOUT 1.6BN TIMES MORE INFORMATION ON THE INTERNET THAN IN THE WORLD’S LARGEST LIBRARY“In my own best-case scenario, every elementary and high school teacher in the United States of America will have unlimited and absolutely cost-free profe demand, and at no cost, with co
normous range of online demographic databases and privacy-shattering customer-service profiles.” William Gibson, 1993 ssional access to long-distance telephone service... By the same token, every teacher in every American public school will be provided, by the manufacturer, onopies of any piece of software.” William Gibson, 1993
SEQUOIA: HOW OUR CLIENTS HAVE SHAPED US To make the “Humorous and Along the w stock model useable for energy-creating” we used actors to Unilever we were asked to improve our own deli support the European roll-out. learning experience for We used Excel interactive demos to to inject more energy in explain the theory and embed the Over 1,200 delegate experienced sessions co process. technical expertise w engaging team-working This proved to be the real catalyst for Gone the hours of long our training services. Despite the replaced with game demonstrations - eve terrifying mathematical intricacies of poetry and mime … d Safety Stock calculations, the training the creativity (and was well received and no-one of our deleg actually fell asleep during the sessions! TRAINING STATISTICIANS The next request “Brilliant peo was to help “planners win “Your demos and exercises arguments with marketing” are just brilliant” (as our client put it). We developed this into our mantra – Supply Chain Managers should be Statisticians : confident in the face of uncertainty; Economists: optimising conflicting drivers; and Diplomats: communicating and facilitating compromises up and down the chain. ECONOMISTS DIPLOMATS
way “Completely enlightening – SEQUOIA: HOW OUR CLIENTS HAVE SHAPED USo help us very style; the so much ‘clicked’ into place”r delegates andnto our sessions.es have now ombining deepwith a hugelyg development.g presentations; es, physicalen sometimesdepending ond bravery) ates!ople” A recent challenge BUILDING SUPPLY CHAIN CAPABILITY was the complete opposite of our initial training, seeing us deliver Supply “The whole event was conducted in a very enjoyable style” Chain training without using PowerPoint! As usual we pushed the technical boundaries, this time building an interactive forecasting game based on Kinect technology which was used alongside some entertaining physical activities to demonstrate Supply Chain dynamics.
The Mobile 2. 2000: can developing 4. Revolution countries ever catch up?1.. 20 years ago, USA were By the end of the millennium this lead had the landline capital grown, with some 68 fixed line subscribers per 100 people. In 1992 North America was the undisputed telephone capital of the Due to the sheer scale of the resource world with 55 phone lines per 100 requirements many felt that other, less people. developed countries, had no chance of ever approaching this level of connectivity. 55.9 We have estimated that the US infrastructure: - Required 57 million tonnes of copper in the wiring - This is equivalent to 32 years of entire global output of copper 68.2 - In todays terms it Martin Cooper with the Motorola DynaTac would be valued at over $450 billion dollars 3. Infrastructure barriers hinder 100 As predicted it was impossible for developing 43.9 India) to approach anything like the level of USA has enjoyed…10.7 9.41.0 SA 0.7 China Argentina USA Germany SA India 0 1991China Argentina USA Germany India
90 Mobile technology introduced 5. Mobile technology overcomes infrastructure hurdles… In April 1973, Martin Cooper of Motorola made the first cell … using mobile technology India has exceeded the peak fixed line connectivity that the USA phone call using a “portable” handset. achieved, and is on its way towards parity. Prior to this mobile-phone calls were possible. But you 100 - This has required needed thousands of dollars worth of equipment weighing 0.02% of the copper about 15kg and a special aerial attached to your car. in the US fixed line infrastructure At Motorola, Martin Cooper and designer Rudy Krolopp designed the \"shoe\" phone or the DynaTAC (for DYNamic 0 - India now has Adaptive Total Area Coverage). This ‘portable’ unit: 1991 2.5 times the 2010 number of • Was around 23 cm long phones in • Weighed over 1 kg the USA • Achieved a 35 minute call… but • Only after a 10 hour recharge. USA F.L USA M.P India M.P India F.L It started a revolution. 6. …and usage takes offconnectivity Since the millennium mobile connectivity has exploded in countries that never got off the ground with fixed line countries (in this example subscriptions… fixed line connectivity that the Ghana India Indonesia Iraq Kenya Nigeria Pakistan Syria Uzbekistan Iran (I.R.) with profound consequences… 0USA F.L USA M.P India F.L 2010 2000 2010
Consequences BusinessFinance African business is dominated by traders – who will move around and offer cash for farm produce or fish catches. Until recently the traders had the negotiationAt the turn of the millennium Kenya’s economy was cash based power of knowledge – unavailable to producers in the absence of aand largely free of bank accounts – with all the frustrations and communications infrastructure.risks that this entails. Now using Zain and a mobile text messaging service, producers can getToday it is leading the global mobile money revolution live price information from local markets $10– with over billion – and know what the traders gross margin will be.of transfers taking place annually.A fisherman can sell his catch on landing – and have the money So armed, it is not unusual for producers toloaded onto his phone. Then he can spend it in shops, send it torelatives or buy goods from remote vendors. Photo credit: Sarah Bartlett, ©Esoko Photo credit: Yousef Eldin double their returns The West is on catch up. – providing much needed opportunities to invest in agriculture and fishing industries.
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