1 1 1 Club de l’IRIS September 07

2 2 Quality Executive Board – Senior Executive meeting RESULT OF THE WORLDWIDE SURVEY 100 COMANIES LEADER IN THEIR FIELD

3 3 Personal Biographical Information AverageMedian Range Years in current position Years with current employer Staffing Metrics Nbr of quality staff in group Structure of the Quality Function Centralized Corporate function25% Decentralized with Corporate support75% Decentralized owned entirely by BU0% Methodology ISO100%EFQM38% 6 Sigma50%CMM113% Lean44%TQM44% Others: Operating models and processes, HACCP, ITIL, BPM Scope Operations 100%HR47% R&D50%Sales47% Customer Service67%Marketing47% Legal/ Regulatory47%Finance33% Organizational Structure 13%

4 4 Budget Metrics AverageMedianRange Total Annual budget5.9M2.0M880K M External Training Providers150K100K40K – 250K Professional Development80K70K10K – 250K Certification and Audit Fees240K160K40K – 300K Advisory Services530K100K40K – 2.3M Quality Management Systems290K300K150K – 400K Travel180K200K50K – 500K What major topics of concern to Senior Executives at your company will require actions by the quality function Reviewing the performance of current business improvement Initiatives Ex: Business process excellence / Management Launching New performance Improvement Initiatives Ex: Improved ability to satisfy all markets Defining Quality Policy Ex: Consumer insight methodology Risk and compliance reporting Ex: Quality Risk management Ex: Preventing product recalls

5 5 WORLDWIDE QUALITY APPOACH International harmonized requirements for a global consistency

6 6 ISO Provides a framework of internationally harmonized requirements Makes easier to implement a Quality management system in a harmonized way ISO provides confidence that actors have the ability to: Identify food safety hazards / quality problems Ensure that these food safety hazards / quality problems are controlled and managed Manage food safety and quality in a structured management system continually improved ISO CERTIFICATIONS – A MUST

7 7 ISO do not contain specific requirements such as: Key processes to be taken into account as well as their required level of performance This make quite impossible: Internally: Performance benchmarking between business units without additional specific audits Externally: Transparency and confidence between every single link in the supply chain Externally: Recognition and Evidence to support “Due Diligence Process” Additional “prerequisite program and manufacturing practices ” must be developed But…Harmonization is highly required to avoid unnecessary costs and duplication of effort. BUT…ISO CERTIFICATION – AN EMPTY SHELL!

8 8 Internally: Process management and KPIs For Danone ISO / 9000 are only management system vehicles For every single BU, ISO certifications can be obtained only if Predefined key processes are fully implemented, managed and are “under control” Thru common KPI, a preset level of performance is achieved This make internal and external communication as well as benchmarking easier

9 9 CONSUMER SAFETY CONSUMER SATISFACTION CONSUMER LOYALTY NON COMPETITIVE COMPETITIVE EDGE Key Processes linked to ISO Certification 8.8.8QualitySystem8.8.8QualitySystem 8.8.9Traceability8.8.9Traceability Regulation8.8.12Regulation8.8.12Crisis management management8.8.12Crisis 8.8.1Supplier8.8.1Supplier8.8.11SubContractor8.8.11SubContractor 8.8.3RawMaterials8.8.3RawMaterials8.8.4FinishedProducts8.8.4FinishedProducts8.8.5Design8.8.5Design QualityCommittee8.8.10QualityCommittee 8.8.7ConsumerListening8.8.7ConsumerListening

10 Feedback for continuous improvement Quality in product design & engineering Quality in execution KPIs Linked to ISO Certification IS: Artemis / Goose IS: Excipio IS: Enablon FSM / Qualineo QM SPECs’ HANDOVER KPI Time to Market Re-formulation DOMs – Key processes

11 Externally: Rational behind harmonization process Recent experienced crisis Guar gum contamination caused by the presence of dioxins (India). Prohibited coloring agent (Red Sudan) in spices (India, Pakistan), Presence of melamine (Plastic material) in rice & gluten proteins (China). Antifreeze (instead of glycerol) China …/… Problem lies with fraudulent practice in certain countries, which can be at the root of contaminations, There is a necessity to develop harmonized requirements to ensure supply safety in certain high-risk areas.

12 Food safety hazards / Quality problems may be introduced at any stage of the food chain. Food safety and Product quality are a joint responsibility of all the actors in the food chain They require combined efforts. One weak link can generate Unsafe food dangerous to health Poor quality product unsatisfying for consumer All the Actors have to demonstrate and provide adequate evidence of their ability to identify and control food safety hazards “Certifications” are intended to provide security by ensuring that there are no weak links in the food supply Externally: FOOD SAFETY / QUALITY – A JOINT RESPONSIBILITY

13 International requirements for Harmonization – Alignment - Transparency There are efforts going on in the US and European food industry to harmonize: Food safety requirements Quality management system, and regulatory compliance standard, As well as audit criteria and audit implementation So far, these efforts are lead by “independent associations” CIES / GFSI (Global food safety initiative) – Global food business network of retailers and suppliers in over 150 countries GMA (Grocery Manufacturers Association) in US G4 (Nestlé, Unilever, Kraft, Danone) Main Goal: Don’t let the authorities do the job!!!

14 To date status GFSI: have agreed to reduce duplication in the supply chain thru the common acceptance of any of the four GFSI benchmarked schemes GMA: Audit consists of approximately 630 questions to be answered. It provides sufficient information to determine whether the inspected facility meets the needs of a company’s requirements. The data can be sorted, scored and analyzed for trends by any authorized user thru a web-based electronic tools G4: Manufacturers’ PRP’s have been drawn up and registered as a “Norm” by the CEN & BSI. Now these PRP’s are combined with ISO to get “manufacturer’s food safety management system” certified under the new ISO 22000/ PRP’s package – this certification is going to be included into the GFSI benchmarked schemes