End to End Supply Chain Excellence
description
Transcript of End to End Supply Chain Excellence
E2E Supply Chain Excellence- Delivering a Culture of Continuous Improvement (Sustainably)- DuPont Experience
Don Wirth – VP Global Operations SC and CoE (retired)
EI duPont de Nemours
Business’s Do Not Compete Supply Chains Compete
Todays Discussion
• Why and Where: focus for E2E Supply Chain Excellence
• Our Journey and the challenges we faced
• Results and successes
• The approaches and differences
• Challenges and Actions
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Future Focus for Industry Competitiveness
DuPont Focus Industry TodayIndustry view 10yr from
now
Customer Responsiveness 4 1 1
Productivity Improvement 1 2 5
Logistics management 6 3 6
Demand Management 7 4 7
Enterprise Alignment 1 5 2
Performance Measurement 8 6 8
Vendor management 9 7 9
Asset management 1 8 10
Employee Development 4 9 3
System Infrastructure 10 10 3
Corporate Executive Board and Supply Chain Council 2010
60% of Leading Supply Chain Professionals see need for Transformation
3
+
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Better Customer Experience
Increase Margin (Reduce Cost to Serve)
Increase Velocity(asset optimized)
From …
High inventory vs. best in class
Underutilized Assets
Non productive inventory
High complexity
Manual interventions
Numerous work arounds
Significant expediting
Inconsistent delivery performance
Difficulty meeting promises
Significant churn and effort
To …
Automated, streamlined, rules based processes
Reduced manufacturing costs
Reduced expediting costs
Advantaged working capital productivity
Aligned E2E performance
Capital available to re-invest
Reliable Supply
Competitive Lead Times
Differentiated service levels
What a Business wants from Continuous Improvement- AND not OR
And…
And…
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The DuPont Story from Best Practice to Production System and Demand led Fulfillment
Demand LedFulfillment
2009
In 2006, struggling with Sustainability of benefits we undertook the DuPont Production System (DPS)to align the
organization, engage our workforce, and achieve bottom-line results. The success of DPS, has led to Engaging
Business Teams to transform with Demand Led Fulfillment (DLF) how we deliver to Customer with significant performance improvement
Performance
Managing Processes
Engagement
And not OR
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Why A Focus on Continuous Improvement is Important in 21st Century
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ACTUAL BENEFITS TO DATE
• 40% improvement in EH&S performance
• Delivery to Promise has reached 80/85% (27%) from 60-70% with a goal of 95%
• $1.5bn reduction in manufacturing costs on sales revenue (4%) of assessed entitlement of $3.5B
• $2bn reduction inventory from $ 6.5bn = $500m pa reduction in carrying cost of inventory (30%)
Qualitative Benefits
• Improved safety behaviour
• Higher predictability in manufacturing performance
• More capacity availability
• More responsive Supply Chain Capability
• More effective Supply Chain Structure
• Higher labour and asset productivity
• Engagement and enablement of improvement right down to operator level
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DuPont Global Integrated Operations – At a glance
2007 2008 2009 2010 2011 2012 2013
80
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0 1
00
1
10
1
20 Supply Chain
Costs
Production
Volumes
DuPont Integrated Operations WorldwideGlobal Supply Chains 90+ Plant sites 200+ SitesWarehouses 740+Shipping Major Container userEmployees (approx.) 34,000+Countries 45
Contract operations ~1000 SitesNew Product Launches 5%-25%Annual Gross Productivity > $1B per year PTOIDelivery to
Promise (DTP)
TRC Rate
Diverse Operations• Seeds
• Discrete Parts
• Food Additives
• Industrial Biotech
• Film production
• Polymer Production
• Fiber production
• Consumer goods
• Electronic materials
• Continuous chemical process
• Fine and custom chemicals
• Fluorine Chemicals
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The Evolution of a Business System Approach
Create Demand / Innovate
Fulfill Demand
DevelopMarket and Shape
Supply Chain Transformation
Business Processes Improvement Approach
Operate Supply Chains and PlantsOperations Excellence
Make Money improve profitability
Stag
ed F
ocu
s
BuildCapabilityEfficiency
DeliverBusiness
Excellence
GrowMarket
Best PracticeFocus
Engage Entire Workforce
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Stages of supply chain maturity (AMR / Gartner View)
Stage 1 (React)
“Historic Accidental”
Stage 2 (Anticipate)
“Grouped for Focus”
Stage 3 (Integrate)
“Balanced Mix”
Stage 4 (Collaborate)
“Value Discovery ”
Stage 4 >(Orchestrate)
“Value innovation”
React
Reactive
Reactive Reactive
Sense
X
Demand
Product
Supply
Improvement Projects
Projects Projects
Projects
Demand
Product
Supply
X
“Value Translation Network”
Va
lue
Shape for
Value
Synchronize
Demand
Product
Supply
“Demand - driven Integrated E2E
Processes”
De
ma
nd
Demand
Product
Supply
“Integrated Functional
Excellence”
Integrate
Demand Supply
ProductProduct
Business Architecture
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The Transformation Zone
Leadership Focus on Supply Chain Excellence of Stage 1-3
Managing
Processes
CapabilitiesMetrics &
Motivators
Systems &
Information
Flows
Collaborative
Structures
Culture
(M & B)
Competencies (skills)
Standard work processes
Project Management
Accountabilities
Cross-functional interfaces and
processes
Governance
Decision Rights
Performance metrics
Entitlement ($$$$)
Enforcement sanctions
Data quality and visibility
Data ownership
IT Systems
Organizational connections
Roles and responsibilities
Operations, Maintenance, Quality,
Planning and HR
Mindset and behaviors
Change management initiatives to fit with
cultural requirements
Typical Focus Areas at this Level
• Skills building S&OP, Demand Planning, Supply Planning, Operations functional excellence
• Value Chain mentality ( Product Family approach)• Understanding Managing processes• IT solutions• Functional KPI’s• Project based improvements $ delivered• Improvement to Business KPI’s
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Leadership Focus on Supply Chain Excellence of Stage 1-3
Managing
Processes
CapabilitiesMetrics &
Motivators
Systems &
Information
Flows
Collaborative
Structures
Culture
(M & B)
Competencies (skills)
Standard work processes
Project Management
Accountabilities
Cross-functional interfaces and
processes
Governance
Decision Rights
Performance metrics
Entitlement ($$$$)
Enforcement sanctions
Data quality and visibility
Data ownership
IT Systems
Organizational connections
Roles and responsibilities
Operations, Maintenance, Quality,
Planning and HR
Mindset and behaviors
Change management initiatives to fit with
cultural requirements
Frustrations with Stages 1-3
• Value delivery often with negative consequences to other areas. Benefit sustainability
• Value delivery underwhelming• Manufacturing Assets typically are unreliable and
unpredictable• S&OP often devolves into a PO discussion or delegated
to SC Professionals• Customer Service not where needed
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Leadership Needs Systemic Thinking to provide the reinforcing
elements to ensure sustainability
Managing
Processes
CapabilitiesMetrics &
Motivators
Systems &
Information
Flows
Collaborative
Structures
Culture
(M & B)
Competencies (skills)
Standard work processes
Project Management
Accountabilities
Cross-functional interfaces and
processes
Governance
Decision Rights
Performance metrics
Entitlement ($$$$)
Enforcement sanctions
Data quality and visibility
Data ownership
IT Systems
Organizational Structure and connections
Roles and responsibilities
S&OP, Product Teams, Decisions Center
and Plant steering Teams
Mindset and behaviors
Change management initiatives to fit with
cultural requirements
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• Opportunity assessment - Strategy tested plus hypothesis driven analysis
• Customer Segmentation
• Portfolio Segmentation
• Supply Chain Capability
• Structural and Operational Archetyping
• Agile, efficient, cash focus
• MTO, MTS, FTO and other
• R, R, A, C, A linked to Plant operating discipline
• Systemic Implementation• What is working
• What is possible
• Integrated approach
• What’s important for competitive success – KPI’s (leading and Lagging)
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Transforming Supply Chain Performance To Demand Driven
Requires More
• Leadership Alignment on shift in journey, Cultural development and Business value ( a conscious choice to go forward)
• Understand and then focus on Key KPI’s both leading and lagging and then track. (EH&S, DTP, DTR, OFLT, MTP, FPPQY……..OEE, SP, Productivity)
• Deployment design choices of speed, value and geography
• Training requirements for all levels of Operations (leaders to Operators)
• Need for delivery of benefits and understanding of financial flows
• Resource investment in front end loading and then understanding benefits from investment
• Consistency of purpose taking the long view to winning in market
Challenges and required Actions
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Thank you
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