SCT Paramters 1© The Delos Partnership 2005 Integrated Enterprise Leadership - Top Management’s...

SCT Paramters 1 © The Delos Partnership 2005

Integrated Enterprise LeadershipIntegrated Enterprise Leadership

- Top Management’s “handle on the business “


Disintegrated Business Disintegrated Business PlanningPlanning

Long termplan

Short termPlan

Medium TermPlan


Objectives of Integrated Objectives of Integrated Enterprise LeadershipEnterprise Leadership

• One set of numbers at all times• Integrated Plans• Realistic Plans• Visibility and transparency• Teamwork• Communication of goals and objectives• Decisions made in timely fashion• More planning, less fire-fighting• Consistent performance measures• Delivery of the strategy


Lead Time ManagementLead Time ManagementLead time is not something that should be a resultLead time is not something that should be a result- it is something that should be managed- it is something that should be managed

Forecast of

Requirements

Actual Requirements/Sales

Actual Shipments

Planned Production/

Shipments


Make to OrderMake to Order

Production = Demand Plan + (Current Order Book - Orderbook Target)

= 70 + 75 - 50)

PRODUCTIONPRODUCTION ORDER BOOKORDER BOOK


Integrated Business Integrated Business PlanningPlanning

-3 -2 -1

Demand Plan 70 70 70

Actual Demand 71 75 80

Difference 1 5 10

Cum Diff 6 16

Months 1 2 3 4 5 6 7 8 9

Last Demand Plan 70 70 70 70 70 70 70 70 70

New Demand Plan

Difference

Cum Diff

Months Q4 Q1

210 210

-3 -2 -1

Supply Plan 75 75 75

Actual Supply 70 69 71

Difference -5 -6 -4

Cum Diff -11 -15

1 2 3 4 5 6 7 8 9

Last Supply Plan 75 75 70 70 70 70 70 70 70

New Supply Plan

Difference

Cum Diff

Q4 Q1

210 210

-3 -2 -1

Order Book Plan 61 56 51

Actual Orders 66 67 73 82

Difference 6 17 31

1 2 3 4 5 6 7 8 9

Last Plan 46 41 41 41 41 41 41 41 41

New Plan

Difference

Q4 Q1

41 41

Make – To- Order – Family Units


Integrated Enterprise Integrated Enterprise LeadershipLeadership

AACCTTIIOONN

AACCTTIIOONN

Week 1 Week 2 Week 3 Week 4

InnovationReview

InnovationReview

CustomerDemandReview

CustomerDemandReview

SupplyPlan

Review

SupplyPlan

Review

PriorityReview

PriorityReview

Stage 1Stage 1

Stage 2Stage 2

SeniorTeam

Review

SeniorTeam

Review

Stage 5Stage 5

Stage 7Stage 7

Stage 3Stage 3

SupportReview

SupportReview

Stage 6Stage 6

Stage 4Stage 4


Framework for Process Framework for Process Review - InnovationReview - Innovation

Process NameProcess NameInputsInputs

Customer enquiryCustomer enquiry

Tasking List (sales)Tasking List (sales)

Specification Specification

Purpose/AgendaPurpose/Agenda

1. Review all new bids and enquiries1. Review all new bids and enquiries

2. Agree which enquiries will form part of 2. Agree which enquiries will form part of the formal forecastthe formal forecast

3. Review resource issues relating to all 3. Review resource issues relating to all new productsnew products

4. Decide which products should be 4. Decide which products should be delayed or cancelleddelayed or cancelled

5. Approve capital expenditure proposal 5. Approve capital expenditure proposal request to go forward to Board request to go forward to Board

OutputsOutputs

Tender document – risks and assumptionsTender document – risks and assumptions

Go/No go decisionGo/No go decision

Capital requirements and resources Capital requirements and resources

PeoplePeople

Sales Director (lead), Bid Manager, Sales Director (lead), Bid Manager, Commercial, KAM, Demand Manager, Commercial, KAM, Demand Manager, Estimating Estimating

Materials, Supply, FinanceMaterials, Supply, Finance

Desired CultureDesired Culture

HonestyHonesty

RealismRealism

All bids to go through this processAll bids to go through this process

MeasuresMeasures

OTIF for new projectsOTIF for new projects

Cost, value, marginCost, value, margin

Capacity and ResourcesCapacity and Resources

Systems to support this stepSystems to support this step

ACT!, TABS, Corporate Planning Model, Time & Attendance, CODA, Excel, Word, Visio. Project planning tool?ACT!, TABS, Corporate Planning Model, Time & Attendance, CODA, Excel, Word, Visio. Project planning tool?

Link to other ProcessesLink to other Processes

Demand, Supply, Support and Prioritisation reviewsDemand, Supply, Support and Prioritisation reviews


Framework for Process Framework for Process Review – Customer Demand Review – Customer Demand


Business strategy Business strategy

Order book salesOrder book sales

Assumptions Assumptions

Major forecast changesMajor forecast changes

Innovation Innovation


1. Review new product forecasts1. Review new product forecasts

2. Review changes to previous 2. Review changes to previous forecastsforecasts

3. Agree and sign off assumptions3. Agree and sign off assumptions

4. Agree actions to close gaps4. Agree actions to close gaps

5. Review performance measures5. Review performance measures

OutputsOutputs

Sales Forecast/Demand PlanSales Forecast/Demand Plan

Unconstrained demandUnconstrained demand

Uncertainties Uncertainties

Financial projectionFinancial projection

PeoplePeople

Sales Director (lead), KAM, Bid Sales Director (lead), KAM, Bid Support Manager, Demand Support Manager, Demand Manager, Commercial Manager, Commercial


Cohesive and agreed sales planCohesive and agreed sales plan

MeasuresMeasures

Business planBusiness plan

Forecast accuracy Forecast accuracy

Order book valueOrder book value

Customer service –on time in full to Customer service –on time in full to customer promise datecustomer promise date


ACT!, TABS, Excel, Corporate Planning modelACT!, TABS, Excel, Corporate Planning model


Supply, Prioritisation and Senior Team ReviewSupply, Prioritisation and Senior Team Review


Framework for Process Framework for Process Review – Supply Plan (Group)Review – Supply Plan (Group)


Sales forecast (not Demand Plan Sales forecast (not Demand Plan at this stage)at this stage)

Demonstrated capacityDemonstrated capacity

What ifsWhat ifs

New product plansNew product plans

Planned shut downs etcPlanned shut downs etc


1. Review demand 1. Review demand

2. Determine if capacity available2. Determine if capacity available

3. Determine issues and possible 3. Determine issues and possible actions for outcomeactions for outcome

OutputsOutputs

Company plan, site plans Company plan, site plans

PeoplePeople

Operations Director (lead), A/D Operations Director (lead), A/D Materials, A/D Supply, Company Materials, A/D Supply, Company Planning Manager, Site Planning Planning Manager, Site Planning Managers?Managers?


Balanced realistic planBalanced realistic plan

MeasuresMeasures

Schedule adherence (actual Schedule adherence (actual production versus planned production versus planned production)production)

Load versus capacity Load versus capacity

Planned shipments versus actual Planned shipments versus actual shipmentsshipments

Earned value budgetEarned value budget


TABS, Time & Attendance, CODA, Corporate Planning model(?)TABS, Time & Attendance, CODA, Corporate Planning model(?)


Innovation, Supply, Site Supply Plans, Prioritisation and Senior Team reviewsInnovation, Supply, Site Supply Plans, Prioritisation and Senior Team reviews


Framework for Process Framework for Process Review – Supply Plan (Site)Review – Supply Plan (Site)


Capacity required by work centre,Capacity required by work centre,

Demonstrated capacity by work Demonstrated capacity by work centre, Site demand forecasts,centre, Site demand forecasts,

Planned maintenance, New Planned maintenance, New product plans product plans


1. Review requirements by site1. Review requirements by site

2. Agree any issues and actions 2. Agree any issues and actions designed to resolve issuesdesigned to resolve issues

3. Review performance measures3. Review performance measures

OutputsOutputs

Agreed site production plan Agreed site production plan

Issues associated with the plan Issues associated with the plan and proposed alternativesand proposed alternatives

Proposals on how to constrain Proposals on how to constrain demanddemand

PeoplePeople

Site general manager (lead), Site Site general manager (lead), Site planning manager,planning manager,

Planner/buyers,Planner/buyers,

Programme/production managers Programme/production managers (PAMs)(PAMs)


HonestyHonesty

Openness Openness

Solution culture Solution culture

MeasuresMeasures

Schedule adherence, Variances to Schedule adherence, Variances to plan, Demonstrated capacity plan, Demonstrated capacity versus planned capacity, Earned versus planned capacity, Earned value budget, Lead time reductionvalue budget, Lead time reduction

Late starts into production, Number Late starts into production, Number of past due orders on TABSof past due orders on TABS


TABS, Time & Attendance, TABS, Time & Attendance,


Supply Plan (Group) reviewSupply Plan (Group) review


Framework for Process Framework for Process Review – Priority Review – Priority


Inputs from all previous stagesInputs from all previous stages


1. Financial statement of all 1. Financial statement of all demands demands

2. Alternatives for evaluation 2. Alternatives for evaluation (external events and internal (external events and internal events)events)

3. One set of realistic plans 3. One set of realistic plans

OutputsOutputs

Decisions on short term capacity Decisions on short term capacity etc where they can be madeetc where they can be made

Options for Senior Team reviewOptions for Senior Team review

Review of financial pictureReview of financial picture

Options for closing the gapOptions for closing the gap

Numbers to form the basis of next Numbers to form the basis of next year’s budgetyear’s budget

PeoplePeople

Finance Director (lead),Finance Director (lead),

Demand Manager, Company Demand Manager, Company Planning Manager, A/D Planning Manager, A/D Materials/Supply(?)Materials/Supply(?)


Issue resolution or costed Issue resolution or costed recommendations for Senior Team recommendations for Senior Team review.review.

MeasuresMeasures

Financial forecast to budget as well Financial forecast to budget as well as OTIF for new projects and as OTIF for new projects and customer orders, forecast customer orders, forecast accuracy, schedule adherence, accuracy, schedule adherence, demonstrated capacity versus demonstrated capacity versus planned capacityplanned capacity


TABS, CODATABS, CODA


Innovation, Demand, Supply and Support reviewsInnovation, Demand, Supply and Support reviews


Framework for Process Framework for Process Review – Senior TeamReview – Senior Team


Financial planFinancial plan

Issue resolution or costed Issue resolution or costed alternative alternative


1. Agreed plan1. Agreed plan

2. Agreed actions2. Agreed actions

3. Reviewed and agreed Financial 3. Reviewed and agreed Financial Plan.Plan.

OutputsOutputs

Agreed one set of numbersAgreed one set of numbers

PeoplePeople

CEO (lead), Sales Director, CEO (lead), Sales Director, Operations Director, Finance Operations Director, Finance Director, Deputy CEODirector, Deputy CEO


Agreed one set of numbersAgreed one set of numbers

MeasuresMeasures

Demand forecast accuracy, Demand forecast accuracy, Customer order delivery, lead time Customer order delivery, lead time reduction, velocity – all activities reduction, velocity – all activities and functions, quality right first and functions, quality right first time, schedule achievement, on time, schedule achievement, on time new product introductiontime new product introduction


TABS, Corporate Planning modelTABS, Corporate Planning model


Innovation, Demand, Supply, Support Priority reviewsInnovation, Demand, Supply, Support Priority reviews


Planned Calendar …….Planned Calendar …….

•Dates set in advance (annually)•Everyone knows when it is•Agenda pre-set•Preparation happens•If nothing to discuss, then no meeting•Almost non-voluntary


Two Leadership StagesTwo Leadership Stages

Prioritisation•Family Summary

– Major Changes– Main Assumptions– Threats & Opportunities– Decisions Taken– Decisions to Take– Recommendations,

Implications, Costs•Alignment to Business Plan•Innovation Status

Senior Team Review

SUMMARY BY FAMILY

MAJOR ASSUMPTIONS________________________________________________

DECISIONS OUTSTANDING________________________________________________

RECOMMENDATIONS________________AND COSTS ________________

________________________________

MAJOR CHANGES ________________________________________________________________

DECISIONS MADE ________________________________________________________________

VULNERABILITIES ________________________________________________________________




________________________________

MAJOR CHANGES ________________________________________________________________

DECISIONS MADE ________________________________________________________________


Demand Supply InventoryBudget Current Plan Previous Plan Prior Year

SUMMARY BY FAMILY




________________________________

MAJOR CHANGES ________________________________________________________________

DECISIONS MADE ________________________________________________________________





________________________________

MAJOR CHANGES ________________________________________________________________

DECISIONS MADE ________________________________________________________________



SUMMARY BY FAMILY




________________________________

MAJOR CHANGES ________________________________________________________________

DECISIONS MADE ________________________________________________________________





________________________________

MAJOR CHANGES ________________________________________________________________

DECISIONS MADE ________________________________________________________________



Total Number of Changes

Current Last Project

1020

30 4050

6070

Engineering

20

2530

35

40

Other


20

2530

35

40

Business Review

-8 -4 0 +4 +8


1020

30 4050

6070

20

2530

35

40

20

2530

35

40

-8 -4 0 +4 +8-8 -4 0 +4 +8

Current Goal

Current Plan FY9x

Plan Actual

0

2550

75

100

10

1520

25

30

100

125150

175

200

100

125150

175

200

Current

Margins

Revenue

Project Cost to Date

0

2550

75

100

10

1520

25

30

100

125150

175

200

100

125150

175

200

1st Pass Test Percent

-3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

INVENTORY

ACTUAL

BUDGET

DEMAND PLANSUPPLY

ACTUAL

ACTUAL

VOLUME

TIME/MONTHS TIME/MONTHS-3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

BUSINESS PLAN

ACTUAL

£ M'sREVENUE

BUSINESS PLAN

PROFITABILITY

ACTUAL

Weeks0

20

40

60

80

100

O/T Delivery Performance

3 1 3 2 0 0 0

7 7 12 6 8 6 11

#No. of Late Deliveries #No. of On-Time Deliveries

A

B

CMonths

Customer's Rating

A

B

C

STDHRSOR

UNITS

WEEKS

REQUIRED CAPACITY

PLANNED CAPACITY(DEMONSTRATED OUTPUT)

RESOURCE A

Total Number of Changes


1020

30 4050

6070

Engineering

20

2530

35

40

Other


20

2530

35

40

Business Review

-8 -4 0 +4 +8-8 -4 0 +4 +8


1020

30 4050

6070

20

2530

35

40

20

2530

35

40

-8 -4 0 +4 +8-8 -4 0 +4 +8

Current Goal

Current Plan FY9x

Plan Actual

0

2550

75

100

10

1520

25

30

100

125150

175

200

100

125150

175

200

Current

Margins

Revenue

Project Cost to Date

0

2550

75

100

10

1520

25

30

100

125150

175

200

100

125150

175

200

1st Pass Test Percent

-3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

INVENTORY

ACTUAL

BUDGET

DEMAND PLANSUPPLY

ACTUAL

ACTUAL

VOLUME

TIME/MONTHS TIME/MONTHS-3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

BUSINESS PLAN

ACTUAL

£ M'sREVENUE

BUSINESS PLAN

PROFITABILITY

ACTUAL

Weeks0

20

40

60

80

100


3 1 3 2 0 0 0

7 7 12 6 8 6 11

#No. of Late Deliveries #No. of On-Time DeliveriesWeeks0

20

40

60

80

100


3 1 3 2 0 0 0

7 7 12 6 8 6 11

#No. of Late Deliveries #No. of On-Time DeliveriesWeeks0

20

40

60

80

100


3 1 3 2 0 0 0

7 7 12 6 8 6 11

#No. of Late Deliveries #No. of On-Time Deliveries

A

B

CMonths

Customer's Rating

A

B

C

A

B

CMonths

Customer's Rating

A

B

C

STDHRSOR

UNITS

WEEKS

REQUIRED CAPACITY


RESOURCE A

STDHRSOR

UNITS

WEEKS

REQUIRED CAPACITY


RESOURCE A

Strategic Programme 1Strategic Programme 2 Strategic Programme 3 Strategic Programme 4 Strategic Programme 5 Strategic Programme 6 Strategic Programme 7 Strategic Programme 8 Strategic Programme 9 Strategic Programme 10 Strategic Programme 11 Strategic Programme 12 Strategic Programme 13 Strategic Programme 14

Strategic Programme 1Strategic Programme 2 Strategic Programme 3 Strategic Programme 4 Strategic Programme 5 Strategic Programme 6 Strategic Programme 7 Strategic Programme 8 Strategic Programme 9 Strategic Programme 10 Strategic Programme 11 Strategic Programme 12 Strategic Programme 13 Strategic Programme 14


Priority ReviewPriority Review

Objectives– To resolve issues around demand supply

and innovation plans - timing and resources

– To provide proposed financial statement– To facilitate what-ifs and provide basis for

decisions (facts not opinions)– To provide issues for resolution by Senior

Team


Objectives for Senior Team Objectives for Senior Team ReviewReview• Make decisions on major issues• Delegate issues to the right level• Review the long-term picture not short

term crises• Review process based performance

measures• Review and develop long-term strategy• Make it the meeting for the Executive


Agenda for discussionAgenda for discussion

• Current Business situation– Plan versus Budget/Business Plan– Plan versus last plan (volume/value)

• Strategic Review [1/quarter]• Assumptions on which plan is based• Issues for Resolution

– Innovation development issues– Supply/Demand Allocation issues– Major Capacity changes required– Outsourcing– Capital Expenditure Plans– HR/IT support issues– Reorganisation requirements

• Performance measures• Review of IEL process against assessment criteria


Family SummaryFamily Summary

0

5,000

10,000

15,000

20,000

25,000

30,000

Euros

Sales Contrib

Sales/Profit

Financial Analysis

Budget

Previous

Current

Major ChangesNew Product included in ForecastTender for Russia included

Major AssumptionsCompetition will reduce price by 5 %We Win Russian Tender

Major Threats

Decisions RequiredInvestment of Eur 0.5 m in Additional capacity for New Product


Reviewing the GapReviewing the GapFinancial Strategic Forecast

0

5

10

15

20

25

1 2 3 4 5

Year

£m.

All New

New

Extend

Current

Aspiration


Traditional MeasuresTraditional Measures

• Sales versus budget

• Machine Utilisation

• Purchase Price Variance

• Overhead Recovery

• Headcount

• Direct Labour Productivity

• Inventory Level


The Core Measures and The Core Measures and Financial EffectFinancial Effect


Integrated Enterprise Integrated Enterprise LeadershipLeadership1. Formal process leading to effective decisions2. Facts rather than opinions3. Organised common-sense4. Long-term rather than short-termist5. Performance measurement based rather than “making it”

against the budget6. Ownership and responsibility for the numbers7. A Rolling financial plan – giving time to adjust rather than

panic at year end8. Team-based decision making based on common goals and

objectives9. Strategy set and communicated and delivered10. Requires democracy for the planning phase, and adherence

to plan for the execution phase

SCT Paramters 1© The Delos Partnership 2005 Integrated Enterprise Leadership - Top Management’s...

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Transcript of SCT Paramters 1© The Delos Partnership 2005 Integrated Enterprise Leadership - Top Management’s...