INTERNATIONAL SUPPLY CHAIN MANAGEMENT DR. THOMAS … · Global manufacturing footprint Mississauga...

INTERNATIONAL SUPPLY CHAIN MANAGEMENT

DR. THOMAS SCHACHNER SVP Global SCM & Purchasing / Grohe AG, Düsseldorf

VP BVL Österreich, Wien

Member of the Advisory Board / BVL e.V., Bremen

Graz, May 2014

http://www.wing-online.at/de/

2

2 2014

“Straight development path” ;-)

WING 1996

c

Operations l Schachner l May 2014


3

1 2009 Actual to 2013 Actual sales CAGR includes effect of full consolidation of Joyou from 1 July 2011 onwards 2 Defined as Eastern Europe, Latin America, Middle East & Africa and Asia excluding Japan

GROHE Group at a glance

Sales by product category 2013

Bathroom 29%

GROHE Professional 15%

Showers & Shower Systems 22%

Kitchen Faucets 10%

Joyou 24%

€1.45bn sales

15%1 sales CAGR (2009-2013)

€286m norm. EBITDA

20% norm. EBITDA margin

~9,300 headcount

~50% of sales from emerging markets2

GROHE Group key statistics 2013


4

Large and growing market – three enduring and attractive megatrends fueling long-term growth of the sanitary market

Sanitary industry - large market with expected strong growth

Source: BRG Building Solutions, Global Water Technology Markets Estimate May 2013 1 Water technology market defined as the “Sanitary Fittings Products” and “Sanitary Systems” segments as defined by BRG Building Solutions

Urbanization

“Lifestyle multiplier”

Water appreciation

Urbanization

“Lifestyle multiplier”

Water appreciation

Americas

Europe

Middle East & Africa

Asia

2017

~€19.2bn

2013

~€15.5bn

CAGR 2013-17

~8%

~5%

~5%

~4%

~27%

~8%

~33%

~32%

~30%

~8%

~32%

~30%

~5% p.a.

Enduring global mega trends


5

Strong brand assets with differentiated and distinctive identities addressing different customer needs

GROHE Group’s brand positioning Key elements

GROHE SPA: High-end solutions targeting affluent customers, 4-5 star hotels and high-class residential complexes

GROHE: Highest-quality high-end and upscale products covering the biggest share of the global water technology demand

GROHE Professional: Product and service line particularly tailored to the needs of installers and planners

Joyou: Regional upscale products in emerging markets below GROHE; young value-brand proposition in developed markets

Hig

h-e

nd

Emotional Rational

Val

ue

U

psc

ale


6

Global expertise is key. However, GROHE sets its global product quality standards in Germany

Design & Innovation Research & Development

Production & Precision Engineering


7

GROHE Group: Continuous growth since 2009

GROHE Group – Sales and EBITDA in 2009-2013 in €m; %

Sales (€m) EBITDA (€m)

829

980

2011

1,120

2013 2009 2010

1,165

1,405

2012

155

200

2013

286

2011 2012

232

273

2010 2009

15% p.a. 17% p.a.

1,020 1,082

15% p.a. sales growth driven by first time consolidation of Joyou from 1st Jul 2011 onwards

Resilient EBITDA margin, also during the financial crisis 20% in 2013

Joyou

GROHE

1,450

205 217

224


8

Products und Components

Big Mac

BOM / Rezept (in DEnglish) • Bun Big Mac • Beef Patty • Salzgurken • Eisberg Salat • getrocknete Zwiebeln • Cheddarkäsescheiben • Sauce Big Mac • Salz- und Pfeffermischung • Verpackung

Allure Brilliant

BOM / Stückliste (in German) • Messingkörper • Zinkhebel • Kartusche • Strahlregler • Messingauslauf • Anschlussschläuche • Zugstange • Pop-Up • Dichtungen • Befestigungen • TPIs • Rosetten • Verpackung

150 SKUs 400 components > 30.000 production sites > 150 distribution centres > 10M tons/yr

8.000 SKUs 30.000 components 9 production sites 7 distribution centres 50.000 tons/yr

Global Supply Chains


9

Magic Quadrants Supply Chain

Sales > €X Billion

Logistics cost < Y% of Sales


OTIF > 99%

Inventories < Z days

10

A hypothetical internal Board Survey

Do we want low inventories or high availability? 1

Do we want low cost or high service levels? 2

Sales? 3

Customer service levels? 4

Cost? 6

Inventories? 5

Question

Yes, for sure

Absolutely

No way – need to protect top line

No way – need to protect customer satisfaction

No way – need to protect margins and bottom line

No way – need to protect liquidity

Answer

Which of the four magic quadrants would you want to rather compromise

Quality? 7 No way –

need to protect the customer and the brand

or even


11

4 Key Elements of Global Supply Chain Management

Information Flow

Product Flow

Demand Flow

Currency Flow

1. Forecasting / S&OP 2. End to End Supply Planning

3. Performance Management 4. Order Management

Procurement Customer Production Distribution Supplier


12

Horizon: 8 to 10 month

Planning period: week

Frequency: monthly

S&OP process

Alignment on Sales value & volume planning on

design level

Production plan

plants

Capacity load plants (staff / facilities)

EBITDAPlant run rate

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

W WW WW WW WW W

Special

events

Orders on

hand

Inventory

planning

Service

level

Scheduling purchase parts / master contracts

Plant

utilization

Purchase

parts

W WW WW WW WW W

W WW WW WW WW W

PoD specific plan

Bottom Up / Top Down Monthly Rolling Medium-Term Planning


13

Truly Global Manufacturing Platform with Nine Production Plants built on German Engineering Heritage

Global manufacturing footprint

Mississauga (Canada) 6

Albergaria (Portugal) 4

Klaeng (Thailand)

5 Nan’an (China)

7

Headquarters Production plant

Lahr

Porta Westfalica

Hemer

Düsseldorf

1

2

3

Fully integrated value chain

GROHE manufactures with in-house central furnaces for brass production

In-house production of high quality faucet engines and flush valves Cartridge Thermostat

Flush Valve

State-of-the-art technology in all plants

Flexible operations to shift demand across plants

Clear specialization of each plant

9 -


14

Added-value Chain in Seven Steps

Sand core production 1 3 Casting / Forging Central Melting 2

Machining 4 Grinding / Polishing 5 Plating 6

Assembly 7 Result, e.g.: Allure Brilliant

Watch also our production movie www.grohe.com/press/films


15

The Global Grohe World (Sourcing Production Sales) is steered by an Integrated S&OP Process

GROHE DCs/inventory consolidation points

Moscow

Hemer/

Porta Chicago

Shenzhen

Tokyo

Americas

Europe

Middle East

Asia

Thailand

Hemer (Germany)

Lahr ( Germany)

Porta Westfalica (Germany)

Albergaria (Portugal)

Klaeng (Thailand)

Mississauga (Canada)

Distribution to customers

Mumbai

Major GROHE internal distribution


80% of Global Volumes are consolidated in Central Warehouses

in Germany

c

c

16

Finished Goods Inventory Reach Clusters

Y X

Transit Value

Covered OOH total horizon

Covered Safety Stock

Stock reach < x days

FG Inventory structure

Supports current OTIF performance

Slow moving inventory

Excess groups Product group €M

Product group €M

Product group €M

Product group €M

Product group €M

Product group €M

Product group €M

Product group €M

Product group €M

Excess group 1

Excess group 2

Excess group 3

Excess group 4 c


17

Order Management

Daily Sales & Order on Hand Tracking

Confirmed orders 2

Requested orders 3

3:2 conversion rate target 4

c

Sales MTD 1


18

Transportation Cost

c

freight spend 1

billed weight 2


€ / unit

19

8 Further Considerations

Cross-functional incentives for Supply Chain KPIs e.g. Forecast Accuracy 1

Supplier and Customer Collaboration (mentally and technically) 2

Balanced score card purchasing (price / PPM / OTIF / viability) 3

Central global production scheduling 4

Fly by the instruments, but also use pilot‘s experience 6

Standard ERP integration 5

We didn‘t mention yet…..

NT + OP = EOP 7


C’mon, it’s only taps…… ;-) 8

!!! VIELEN DANK FÜR DIE AUFMERKSAMKEIT !!! Q&A

DR. THOMAS SCHACHNER SVP Global SCM & Purchasing / Grohe AG, Düsseldorf

VP BVL Österreich, Wien

Member of the Advisory Board / BVL e.V., Bremen

Graz, May 2014


INTERNATIONAL SUPPLY CHAIN MANAGEMENT DR. THOMAS … · Global manufacturing footprint Mississauga...

Documents

Transcript of INTERNATIONAL SUPPLY CHAIN MANAGEMENT DR. THOMAS … · Global manufacturing footprint Mississauga...