Addressing the Challenges of an Extended Supply Chainc304444.r44.cf1.rackcdn.com/donabsoft.pdf4 Who...
Transcript of Addressing the Challenges of an Extended Supply Chainc304444.r44.cf1.rackcdn.com/donabsoft.pdf4 Who...
Your Speakers Today
Don Valentine, Operations Director – Absoft
Limited
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Today’s Agenda
Introduction to Absoft
Extended Supply Chain - definition
Foundations of an efficient Extended Supply Chain
Determining the criticality of goods
Stocking strategy
Sourcing strategy (supplier performance)
Returns management strategy
Integrated system strategy
Real World
Actionable workbenches/analytics
Q&A
Addressing the
Challenges of an
Extended Supply
Chain
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Who is Absoft?
We design, build, test, deploy, support and
optimise SAP solutions
20 years oil & gas industry experience
Specialist SAP Consultancy
SAP UK’s Oil & Gas Partner
Global turnkey project capability Absoft has deployed SAP into 39
countries worldwide…
• EUROPE
• MIDDLE EAST
• AMERICAS
• AFRICA
• ASIA
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Extended Supply Chain - Definition
Local & Global suppliers
& customers
Internal “Suppliers” and
”Customers”
Global
transportation
Challenging environments
(Onshore, Offshore, International)
Multi-lingual,
Multi-national,
Multi-currency
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Extended Supply Chain - Definition
Remote Site 1
Remote Site 2
Local Hub WH
Local Vendor
Regional Hub WH
Regional Hub WH
(F/F)
Intn’l Vendor
Intn’l Vendor
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Extended Supply Chain - Definition
Remote Site 1
Remote Site 2
Local Hub WH
Local Vendor
Regional Hub WH
Regional Hub WH
(F/F)
Intn’l Vendor
Intn’l Vendor
Which materials should I
hold where ? – offshore,
local hub regional hub
How do I achieve the right
stocking policies and right
level of inventory holdings ?
What strategic
relationships do I need to
form with my
international/local service
providers/vendors ?
How do I achieve
transparency in the ESC
and provide the right
information to the right
people to support them in
making good decisions ?
How do I track returns –
lack of process is messing
up my inventory accuracy ?
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Foundations
Lay the Foundations
Determining the criticality of Goods
Stocking Strategy
Sourcing/Expediting Strategy
Returns Strategy
Integrated System Strategy
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Foundation - Criticality
Know what equipments are critical
Introduce a ranking
Critical Equipment
Critical Maintenance Activities
Where-used Maintenance plans
Where-used Spare part BOMs
Defines importance of stock
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Foundation – Equipment Criticality
Impact of failure
Probability of failure
Very likely
Likely
24 hours 7 days 1 month
7 days 1 month 3 months
1 month
6 months
Serious injuries
Minor injuries
Slight injuries
No injuries
Major impact
Minor impact
Slight impact
No impact
Plant shutdown
Process shutdown
Equipment shutdown
No impact
Not likely
3 months
3 months
6 months
6 months
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Foundation - Criticality
Impact of failure
Probability of failure
Very likely
Likely
24 hours 7 days 1 month
7 days 1 month 3 months
1 month
6 months
Serious injuries
Minor injuries
Slight injuries
No injuries
Major impact
Minor impact
Slight impact
No impact
Plant shutdown
Process shutdown
Equipment
shutdown
No impact
Not likely
3 months
3 months
6 months
6 months
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Foundation - Criticality
Maintenance Activity D
efine c
riticalit
y
for
Master data effort
Equipments
Maint. plans
BOMs
Classify critical
equipments
Classify critical
activities
Maint.plan where
used?
BOM
where used?Component stock
param.
Critical spare
s x
-
refe
rence lis
t
Package 3
Package 2
Package 1
t1 6 12 18 24
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Foundation - Criticality
Know what equipments are critical
Introduce a ranking
Critical Equipment
Critical Maintenance Activities
Where-used Maintenance plans
Where-used Spare part BOMs
Defines importance of stock
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Extended Supply Chain - Context
Remote Site 1
Remote Site 2
Local Hub WH
Local Vendor
Regional Hub WH
Regional Hub WH
(F/F)
Intn’l Vendor
Intn’l Vendor
Critical materials
identified and held in
the appropriate
locations
24 hours
7 days
1 month
>3 months
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Stocking Strategy – Conclusion
Define stocking strategy with relevant KPIs
Introduce adjusted performance reports
Measure stock control KPIs
Prioritise by ranking – given by maintenance
Make educated decisions
Adjust stocking strategy and min/max accordingly
ABCD
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Foundation – Stocking Strategy
ABC(D) classification
B – middle 15%
demand value
A – top 80% demand
value
+ Critical spare
+ High value
C – bottom 5% value
D – no usage
Promotion –
Long Lead /
Scarcity
B – middle 15%
of all materials
A – Top 5%
C – bottom 80%
of all materials
D – no usage Demand <= 0
ABC – Analyse demand value over
last 12 months, then sort top-down
Demand Value Stock Catalogue
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Foundation – Stocking Strategy
Stock KPIs
Criticality
High Value
SLA’s
ABCD Classification
Stocking
Policy
Replenishment
Parms
Inventory
Count Parms
Dead
Stock
Lead
Times
…..
Focus
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Stocking Strategy – Conclusion
Define stocking strategy with relevant KPIs
Introduce adjusted performance reports
Measure stock control KPIs
Prioritise by ranking – given by maintenance
Make educated decisions
Adjust stocking strategy and min/max accordingly
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Extended Supply Chain - Context
Remote Site 1
Remote Site 2
Local Hub WH
Local Vendor
Regional Hub WH
Regional Hub WH
(F/F)
Intn’l Vendor
Intn’l Vendor
Critical materials
identified and held in
the appropriate
locations
Stock or Non-stock
policy set –
replenishment and
inventory
management
parameters
established for
materials at locations
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Foundation – Sourcing Strategy
Sourcing in the international extended Supply Chain can be
interesting !
Local
Local specifics - tax, local content, payment methods…..
Currency
People
Local reporting
Local Costs
International
Freight Costs + Import taxes
Customs
Collaboration with F/F, Customs, Customs clearance agencies…
Lead Times
Visibility of goods status
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Foundation – Supplier Performance/Expediting
Manage and report events in expediting
Use Ranking of critical jobs
Capture events in supply chain
Prioritised requirements
Highlighted delivery threats
Improved availability and stock levels
Work (Req By Date)
Requisition
Purchase Order (Del
Date)
Receipt (Int’l)
Pick, Pack, Ship
Receipt (Local)
Pick, Pack, Ship (Local)
Receipt (Remote)
Key
Dates
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Extended Supply Chain - Context
Remote Site 1
Remote Site 2
Local Hub WH
Local Vendor
Regional Hub WH
Regional Hub WH
(F/F)
Intn’l Vendor
Intn’l Vendor
Critical materials
identified and held in
the appropriate
locations
Stock or Non-stock
policy set –
replenishment and
inventory
management
parameters
established for
materials at locations
Supplier Relationships
established locally and
internationally – supplier
performance measures in
place
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Foundation – Returns Management
Define the returns scenarios (recommended actions)
Define the processing steps that support each scenario &
allowed processes for each step
Determine the systematic model – and implement
Accurate inventory, tracking of goods throughout repairs,
rentals mob/de-mob management
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Foundation – Returns Management Strategy
Remote Site 1
Remote Site 2
WH Vendor
• Returns
• Rentals
• Repairs Integrated Supply Chain
processes that when mis-
managed compromise the
supply chain
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Returns – Conclusion
Define the returns scenarios (recommended actions)
Define the processing steps that support each scenario &
allowed processes for each step
Determine the systematic model – and implement
Accurate inventory, tracking of goods throughout repairs,
rentals mob/de-mob management
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Extended Supply Chain - Context
Remote Site 1
Remote Site 2
Local Hub WH
Local Vendor
Regional Hub WH
Regional Hub WH
(F/F)
Intn’l Vendor
Intn’l Vendor
Critical materials
identified and held in
the appropriate
locations
Stock or Non-stock
policy set –
replenishment and
inventory
management
parameters
established for
materials at locations Returns Management –
scenarios, procedures
defined and deployed
Supplier
Relationships
established locally
and internationally
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Foundation – Integrated Systems Strategy
CMMS Criticality
Inv Mgmt Stocking Policy
Replenishment Parameters
Stock Counting
Purchasing Local/International Sources
Logistics International Shipping
Cross-Docking
Containerisation
Extended Supply Chain
Work Orders, Priorities
Bills of Material
Materials, Vendors,
Contracts
Materials, Quantities,
Stocking Policy, Stock
Categories
Routes, MOT, Containers,
Shipments
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Foundation – Integrated Systems Strategy
“Single version of the truth”
Data flow
Document flow
Multi-Currency capability
Tax/Customs capability
Language capability
Local reporting capability – Local Content, SPED, SIOP, OHADA, REPETRO…..
End-to-end procure to pay support
Collaboration capability
Mature/sophisticated system security concept
Reporting capability
ERP
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Outcome
Remote Site 1
Remote Site 2
Local Hub WH
Local Vendor
Regional Hub WH
Regional Hub WH
(F/F)
Intn’l Vendor
Intn’l Vendor
Critical materials
identified and held in
the appropriate
locations
Stock or Non-stock
policy set –
replenishment and
inventory
management
parameters
established for
materials at locations
Supplier
Relationships
established locally
and internationally
Freight
Forwarders/Service
Co’s integrated into
your processes/
procedure, data
• Transparency
• Single version of the truth
• Integrated Analytics
• Scalability
Returns Processes –
scenarios mapped and
workflow enabled
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Outcome
Remote Site 1
Remote Site 2
Local Hub WH
Local Vendor
Regional Hub WH
Regional Hub WH
(F/F)
Intn’l Vendor
Intn’l Vendor
Critical materials
identified and held in
the appropriate
locations
Stock or Non-stock
policy set –
replenishment and
inventory
management
parameters
established for
materials at locations
Supplier
Relationships
established locally
and internationally
Freight Forwarders
registering receipt,
pick, pack, ship –
transparent goods
tracking
• Transparency
• Single version of the truth
• Integrated Analytics
• Scalability
Returns Processes –
scenarios mapped and
workflow enabled
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Foundation
CMMS Criticality
Inv Mgmt Stocking Policy
Replenishment Parameters
Stock Counting
Purchasing Local/International Sources
Logistics International Shipping
Cross-Docking
Containerisation
Extended Supply Chain
Work Orders, Priorities
Bills of Material
Materials, Vendors,
Contracts
Materials, Quantities,
Stocking Policy, Stock
Categories
Routes, MOT, Containers,
Shipments
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Joined Up Acting
Process vs Function
Ops/Projects Procurement Logistics Ops/Projects Logistics
Work/Demand Procure Mobilise
Execute
Demob
Execute
Finance &
Controlling
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Real World
CMMS Criticality
Compliance Windows
Inv Mgmt Stocking Policy
Replenishment Parameters
Stock Count
Purchasing Local/International
Sources
Logistics International Shipping
Cross-Docking
Containerisation
Extended Supply Chain
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Real World – Making it work
Integration Vehicles – Dashboards/Workbenches
Integrated Workbenches
“Where’s my material reporting”
Returns Workbench
Purchasing
Expediting/Material Availability Reporting
Purchasing Analytics – Vendor performance
Inventory
Inventory Analytics
Criticality
Critical Element Dashboards
Maintenance Planning Boards
Decision Support Tools
• Customer Focussed
• User friendly
• Drill down
• Traffic Lights
• Actionable
Workbench/Dashboard
• “Where are my materials”
• Returns Analytics
• Expediting Analytics
• Sourcing Analytics
• Inventory Analytics
• Criticality
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Example – “Where are my Materials” Dashboard
Full Supply Chain
Demand -> PO -> Receipt (Intl) -> X-Dock -> Pack -> Ship -> Receipt (Local)…..
Single version of the truth, full traceability, no blind spots
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Example – Returns Workbench
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Example – Material Availability Dashboard
Dashboards by
Location /
Discipline /
Priority
Drill Down/Act
Delivery threat as traffic light
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Example – Purchasing Analytics
Probability of on time delivery by supplier in 2006
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
-100 -90 -80 -70 -60 -50 -40 -30 -20 -10 0 10 20 30 40 50 60 70 80 90 100
Days early / late
Craig
Score
Other
“Worst Actor” Suppliers On-Time Performance
• Clarity of Purpose
• Actionable
• Trending
but take care…
were the delivery
dates realistic ?
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Example – Inventory Analytics
Rule Sets
A = critical materials
A = materials with high value
Rules Sets
A top x% of the materials with the highest demand value
over the last 12 months.
B next y% of the materials with the highest demand
value over the last 12 months.
C last z% of the materials with the highest demand value
over the last 12 months.
D all other materials with 0 demand value or negative
demand value over the last 12 months.
Update Stock Count Rules A count x times a year
B count y times a year
C count z times every two years
D materials will not be counted.
Update Repl. Parms ROP
ROP Qty
Safety Stock
+ Delivery Lead Time
+ GR Processing Time
Dead Stock Inventory Turn
B – middle 15%
of all materials
A – Top 5%
C – bottom 80% value
of all materials
D – no usage
Stock Catalogue
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Example – Critical Element Dashboards
End-User – Status of my Critical Maintenance
Benefits
• Transparency on where critical equipment issues
• Highlights areas for root cause analysis – work delays due to late materials/stock outs
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Real World – Making it work
Integration Vehicles – Dashboards/Workbenches
Integrated Workbenches
“Where’s my material reporting”
Returns Workbench
Purchasing
Expediting/Material Availability Reporting
Purchasing Analytics – Vendor performance
Inventory
Inventory Analytics
Criticality
Critical Element Dashboards
Maintenance Planning Boards
Decision Support Tools
• Customer Focussed
• User friendly
• Drill down
• Traffic Lights
• Actionable
Workbench/Dashboard
• “Where are my materials”
• Returns Analytics
• Expediting Analytics
• Sourcing Analytics
• Inventory Analytics
• Criticality
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Absoft’s Approach
Analyse
Design
Build
Run
Technology Process
People Use of technology
to support
people in
executing best
practice processes
Actionable
Analytics