Post on 29-Oct-2014
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2. CONTENT
3. Wacker Chemie AG WACKER Group (2007) OVER 90 YEARS OF SUCCESS
4. WE ARE COMMITTED TO BENCHMARK-QUALITY PRODUCTS DESIGNED FOR OUR FOCUS INDUSTRIES
5. CONTENT
6. WHAT IS SALES & OPERATIONS PLANNING?
7. FROM 10,000 FEET Executive S&OP A process to reconcile, agree upon, and communicate the company game plan -- Operations (Units/Hours/Materials) Product Development (Product Introduction) Finance (Dollars) Sales & Marketing (Units/$$ by family) 8. SALES & OPERATIONS PLANNING OVERVIEW Volume Mix Supply Demand Demand Planning/ Forecasting Supply Planning (Capacity) Master Scheduling Plant & Supplier Scheduling Distribution SchedulingExecutive S&OP 9. SALES & OPERATIONS PLANNINGS PLACE Strategic Planning Business Planning Sales & Operations Planning Plant, Supplier, Distribution Scheduling & Execution 10. TOP MANAGEMENT NEEDS
11. IMPLEMENTATION PATH Months Business Improvement 123456789 Phase I Preparation Phase II Expansion Phase III Financial Integration 12. IMPLEMENTATION ALTERNATIVES Build it and they will come design it first, get the mechanics working, then attempt to sell it to top management = Low probability of success Hold the high groundinvolve top management at the very beginning of implementation and throughout= High probability of success 13. CONTENT
14. TYPICAL BENEFITS FROM IMPLEMENTING S&OP
Source:IBM 15. HIGH FORECASTING ACCURACY YIELDS TANGIBLE BENEFITS IN SUPPLY CHAIN PERFORMANCE
Source:AMR Research 2008 16.
BENEFITS OF IMPROVING FORECAST ACCURACY Source:PRTM 2008 17. INVENTORY LEVEL VS. FORECAST ACCURACY Source:Aberdeen Group 2008 18. BENCHMARKING OBSERVATIONS
19. CONTENT
20. AIR PRODUCTS POLYMERS BUSINESS UNIT
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WHERE THEY STARTED IN 2003 22. GLOBAL WORK PROCESSES Metrics Follow the Money! 23. S&OP PROCESS STEPS P1.1A Identify, Prioritize, & Aggregate SC Requirements DAY 0 - 8 P1.4 Establish &Communicate SC Plans DAY 13-15 P1.3A Balance Supply Chain Requirements with SCResources DAY 9 12 P1.2A Identify, Prioritize, & Aggregate SC Resources DAY 0 - 8 Review Historical Sales Data Review Demand Metrics Apply Historical Sales Data Adjustments Apply Future Demand Change Notifications Run Forecast Model Agree & Communicate Approved Plans Communicate Implications to Financial & Sales Plans Review Supply Plan & Cost Projections Develop/Modify Supply Chain Plans Review Supply Planning Measures Adjust Supply Planning Constraints Load & Review Unconstrained Demand Plan Submit Supply Plan with Documented Options Approve & Publish Supply Plan Approve & Publish Unconstrained Demand Plan Gather Data [DAY0] Gather Data [DAY 0] Define Supply Capability [DAY 1 8] Develop Supply Plan Proposals[DAY 9] Finalize & Approve Supply Plan[DAY 10 -12] Aggregate All Sources of Supply Initiate Req Master Data Changes Review Inventory Available Review Supply Capability Create Demand Change Summary B A Partnership Meeting [DAY 13] Executive S&OP[DAY 15] Summarize Supply Chain Plans Gather Collaborative Input (Future Function) Create Unconstrained Demand Plan [DAY 1 -8] Develop Unconstrained Revenue Projection Apply New Characteristic Combos Adjust Statistical Parameters(if needed) Review and Validate Unconstrained Forecast Input Source, Make, Deliver Product & Capacity Plans Create Supply Change Summary Develop Supply Plan Proposal (Optimization) Review Alerts Assess Impact & Develop Options Review Excess Capacity, Supply Options, Demand Exceptions Issue Resolution Agree to Supply Plan Initiate any Master Data MOC Review Supply Chain Plans Review Revenue Projections A B C C BI 24. S&OP PROCESS CYCLE Monthly Cycle Create Unconstrained Demand Plan (Days 1-7) Adjust Historical data, Statistical Forecast Develop Supply Plan Proposals (Days 7-9) Approved Demand Plan Partnership Meeting (Day 13) Approved Supply Plan (Days 10-12) Approved Plan Executive Meeting (Day 15) Balanced Plan Demand Change Summary(Day 0) 25. EXECUTIVE S&OP MEETING Review Demand Plan (Review Product Families, Demand Assumptions) Review Supply Plan (Inventory Plan, Cost Projections, Supply Assumptions, Issue Resolution) Agree to Supply Plan (Develop Supply Chain Plans, Source, Make, Deliver) Develop Revenue Projections (Identify Gaps) 18 Month Projections Communicate Approved Plans (Source, Make, Deliver) Communicate Plan Implications (Financial, Sales) 26. S&OP DRIVES THE BUSINESS PLAN Create Unconstrained Demand Plan (Days 1-7) Revenue Forecasting Volume Forecasting Process Links Together Business, Supply Chain, and Finance Demand Change Summary (Day 0) Partnership Meeting (Day 13) Executive Meeting (Day 15) Develop Supply Plan Proposals (Days 7-9) S&OP Monthly Cycle Adjust Historical data, Statistical Forecast Approved Demand Plan Approved Supply Plan (Days 10-12) Approved Plan Balanced Plan Drives Business Plans: - Outlooks/Budgets - Sales/Marketing Plans - Gross Profit Forecast Drives Supply Chain Plans: - Plant Loadings - Inventory Levels - Raw Material Forecasts Financial Variances: volume, price & margin 27. S&OP PROCESS KPIs
28. FORECAST ACCURACY IMPROVEMENT (Product Mix Level) Process, People, Statistical Forecasting Exception Analysis Forecast Adjustments Forecast Segmentation Data Aggregation World Class + 6% + 15% + 7% 29. Demand Forecast Accuracy (%) Inventory Days of Supply 20% Improvement Forecast Accuracy (%) FORECAST ACCURACY VS INVENTORY DOS Target Target 30. 38% Improvement 20042007 PRODUCTION PLAN ADHERENCE SUPPLY PLANNING ACCURACY 31. 21% Improvement 20042007 FINANCIAL FORECAST ACCURACY 32. WHERE ARE THEY TODAY
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MAJOR IMPROVEMENTS SINCE 2003 All these benefits were driven by better supply chain planning & forecasting 34. THE S&OP CHECK LIST
35. ROAD BLOCKS & CHALLENGES
36. BU A FORECAST DEVIATION TREND
Target 37. BU B FORECAST DEVIATION TREND
Target 38.
But those who can build superior, agile, andresponsive supply chains, have a real chance CONCLUSION 39. The WACKER Group THANK YOU FOR YOUR ATTENTION Stephen P. Crane Director Strategic Supply Chain Management [email_address] CREATING TOMORROW'S SOLUTIONS