Integrated Business Planning Bridging the Gap Between Budgets and Reality

Transcription

Integrated Business Planning
Bridging the Gap Between Budgets
and Reality
Deb Bene’, Emerson and Mark Gordon, Oracle
© 2010 Supply Chain Council. ALL RIGHTS RESERVED. |
Slide 1
|
October 2010
Key Takeaways
• Value Chain Planning implementation is a journey, not a project –
each phase has its own short time to value, but one should have a
long term vision.
• Start Anywhere – Focus on the highest bang for your buck within
each BU/Region and don’t wait for ERP Implementation or upgrade
• Pick your critical “green” KPIs – one cannot be perfect at all
measures – which KPIs defines you as a company, and meet your
strategy?
• Create transparency between All departments, Sales, Marketing,
Finance, and SC and align your Supply with your Opportunities
Slide 2
|
October 2010
Business Planning Challenges
Changing market demands
Inefficient Operations
•
•
•
•
• Increasing operating costs
• Capacity constraints
• Supply chain lead times
Demanding customers
Product proliferation
Shorter product lifecycles
Continuous innovation
Sales
Marketing
Sales
Data
Marketing
Data
Operations
Operations
Data 1
Finance
Operations
Data N
Finance
Data 1
Finance
Data N
Deteriorating financial health
Economic Downturn
•
•
•
•
•
•
•
•
Eroding margins
Cost volatility
Lack of insight into profit drivers
Loss of corporate value
Slide 3
|
October 2010
Falling demand
Lack of credit and capital
Need to conserve cash
Decreasing competitive position
Manage a Unified Plan Across the Enterprise
Many critical planning processes, too many spreadsheets
Revenue Planning
Profit Planning
Excess & Obsolete
Inventory Exposure
Finance
Working Capital
Planning
New Products Planning
Marketing
SKU Rationalization
Product Forecasts
Financial Planning &
Goals
Promotion Plans
Strategic Planning
Supply Chain
New Product Launch
Supply Chain Planning
R&D
Product Life Cycle Plans
Demand Planning
Operating
Plan
Sales & Operations Planning
Business Plans
Sales Forecasts
Collaborative Planning
Sales
Design Collaboration
Sales Forecasts
Forecast Collaboration
Market Requirements
Product Requirements
Suppliers
Key Account Planning
Product Allocation
Partners
Slide 4
|
October 2010
Customers
Oracle Vision for Next Generation
Sales & Operations Planning
Today
Demand-Driven S&OP
Next Generation
Execute and
measure the plan
Integrated Business
Planning Solution
Approve and publish
the plan
• Profitable response –
• Supply and Demand
balance opportunities and
Risk
balancing
• Most decision making at
• Achieve consensus
distinct Demand, Supply
and Executive Review
meetings
operational plan through
continuous, interactive
decision making and
alignment with financial plans
• Periodic and reactive
• Financial scenarios
Integrated Scenario Analysis
Supply what-if
Financial what-if
Base supply plan
Base financial plan
Demand consensus
Demand shaping what-if
Base demand plan
• Base financial plan
Collect sales and market input
• Financial what-if
Next Generation S&OP
5
Slide 5
|
October 2010
Oracle’s Integrated Business Planning Process
Provides critical link between operations, sales and finance
Performance
Management
Sales and Operations Planning
Financial
Targets
Sales
Forecast
Strategic
Network
Optimization
Demand
Management
•
•
•
•
•
•
Supply
Chain Planning
Inventory
Optimization
Planning driven from key performance indicators to engage managers and
planners
Aggregate roll up for financial reconciliation; supports $ to units synchronization
Workflow coordinates the process and drives consensus process to gather sales
forecast, customer demand, financial plans and operational plans
Works with Oracle ERP and legacy ERP applications
What-if simulation scenarios to examine alternative plans
Strategic supply chain analysis and inventory planning
Slide 6
|
October 2010
Sales & Operations
Planning
Deb Bene’
Business Solutions Mgr.
Emerson Program Management Office
Slide 7
|
October 2010
Emerson At-A-Glance
$20.9 Billion in sales (2009)
NYSE: EMR
Diversified global
manufacturer
and technology provider
Approximately 129,000
employees worldwide
Headquarters in
St. Louis, Mo.
Manufacturing and/or sales presence in more than 150 countries
255 manufacturing locations, 155 outside the U.S.
No. 94 on 2009 FORTUNE 500 list of America’s largest corporations
Founded in 1890
Slide 8
|
October 2010
2009 Emerson
Summary
2009 Sales by Segment
2009
$20.9B
Sales
Employees
129K
International Sales Have
Exceeded 50% Since 2007
Process
Management
Consumer
Climate
Technologies
Industrial
Network Power
Industrial
Automation
Electronics
2009 Sales by Geography
Mfg Plants
US & Canada
Europe
Asia
ROW
Total
Appliance &
Tools
100
70
46
39
255
Slide 9
|
October 2010
ROW
Asia
Europe
United
States
Emerson Is a Leader in Its Core Global Businesses &
Markets
#1 AC & DC Power Systems
#1 OEM Embedded Power
#1 Control Valves
#1 Measurement Devices
#1 Compressors
#1 Controls
#1 Ultrasonic Welding
#1 Precision Cooling Systems
#1 Garbage Disposers
#1 Appliance Components
#1 Alternators
#1 Fluid Control
#1 Fractional Motors
#1 Storage Solutions
#1 Plumbing Tools
#1 Wet/Dry Vacuums
#1 Pressing Tools/Jaws
#1 CCTV Inspection Systems
Slide 10
|
October 2010
Emerson’s Products and Brands
Emerson Process Management
Valves & Regulators
Systems & Solutions
Measurement
Emerson Network Power
Integrated DC Power Cabinets
Transfer Switches
Precision Cooling
UPS
Slide 11
|
October 2010
DC Power Systems
High Density Precision Cooling
Enterprise Monitoring
RF Connectors
Mobile Chargers
OEM Power
Emerson’s Products and Brands
Emerson Industrial Automation
Valve Controls
Gearing
Sheaves, Sprockets
Bearings
Generators
Solenoid Valves
Pneumatic Valves
Variable Speed Drives
Electric Motors
Motion Controls
Plastic & Metal Joining
Emerson Appliance Motors and Tools
Appliance
Motor
s
Storage Solutions
Thermal Sensors &
Controls
Slide 12
|
October 2010
Professional Tools
PMO Scope of Services
Applications Strategy for Standard Programs
• Data and Configuration Standards
• Process Design & Best Practices
• Deployment Models & Roadmaps
Application Services
• Service Management
• Implementation and Support Services
• Subject Matter Expertise (Project Assistance)
Corporate Applications Management
• Strategy & Planning
• Implementation
Project Governance
•
•
•
•
IT Project Lifecycle Process
Risk Management (SOX Compliance)
Service Model
Project Metrics
Slide 13
|
October 2010
Demand Planning and S&OP – Maturity and Technology Roadmap
Maturity
Levels
Phase 1
Technology
Enabler
MS Excel and Other data
consolidation tools
Phase 2
Phase 3
Phase 4
Advanced
(Optional)
Demantra Demand Management
Demantra Real Time S&OP
Demantra Adv
Forecasting
Technology Manual
Description collection of
demand and Multi-source
manually input collection and
visibility of
to Excel
demand and
Dissimilar
supply data
data formats
Consolidates data
into Excel or other
Minimum
data consolidation
version
tools with version
control
management
Share drive and
email coordination
Consolidation
of demand data
Capability to
perform “What if
Scenarios”
Integration ERP
system(s)
Use manual
process for
Consensus FC
Component
Forecasting
(Planning BOM)
Collaboration
Use of Causal
Use Work flows
factors,
for approvals
econometrics
Integration of
Advanced
Supply-data to
statistical
understand
analysis (If
supply impact of
applicable)
each plan
Facilitate End-toEnd Demand
Analysis
Define Key
Business Metrics
Demantra introduced during Phase 3 level to build
integration of demand driven value stream.
Slide 14
|
October 2010
Vision: Integrated Supply Chain to Drive Enterprise
Excellence
S&OP
Global Supply Chain Planner
Marketing
Demand
Plan
F/A & S/A
SC Planner
Build
Plan
Material
Plan
Global Supply Chain
Purchasing
(IPO)
5-Year
End of Pipe Metrics
Suppliers
In Bound
Logistics
(Material Plan Execution)
External Customer
RDSL =
PDSL =
Distribution & Product Co.
Customer
Care
Internal Operations
ITO =
Customer
Slide 15
|
Buyers
(IPO)
October 2010
Final Assembly
Sub-Assembly
Out Bound
Logistics
(Build Plan Execution)
Customer
Established a Consistent, Actionable Consensus
Planning Process: “One Plan”
POR
$
Plan
SC Planners
Planned
Order
(Supplier
Forecast)
Historical
Demand
Demand Plan
WA
Marketing
Project
Pursuit
Team
Upside
Market
Intelligence
Unit
($ & Unit)
Plan
Build Plan
Material
Plan
Firmed PO
(Actual PO)
Mega
Project
Input
Supplier
iSupplier Portal
Demand Plan
Build Plan
Master Scheduling
MRP
• Model Family
Volume & Mix
• Weekly
Production
Plan by
Production
Line
• Mix Percent
• FDS
• Weekly Material Plan
to support Build Plan
(option piece parts)
• MOQ
(monthly Model
Family forecast)
Slide 16
|
October 2010
• Safety Stock
• Default PO LT
etc
16
Key Messages : Sales & Operation Planning
• Reduces operations cost by
optimizing asset management
through better planning
• Is the key driver in managing and
reducing complexity
• Increases sales and customer loyalty
by improving RDSL & PDSL
Slide 17
|
October 2010
Reduces Operations Cost by Optimizing Asset
Management through Better Planning
• Demand Management Tool – Demantra
›
Demand Plan
- Statistical Forecast Aligned with Country Planning
›
Hub Build Plan
- Linkage with Demand Plan and Capacity
›
Primary Producer Build Plan
- Linkage with Hub Build Plans
›
Material Plan
- Improve Option forecast
• Global Planning Organization
Slide 18
|
October 2010
Established President Led Closed Loop Manual
S&OP Process
Week 1
Week 2
Week 3
Week 4
America
Global
World Area
S&OP Review
Global
Product
Marketing
World
Area
Sales
Plan
World
Area
Slide 19
Primary
Producer
Build Plan
S/A
Material Plan/ Option
Mix
Historical Sales Data +
Project Template
In Demantra
World
Area
Factory
Build
Plan
F/A
Supplier Plan
|
October 2010
EMEA
AP
Our Complex Product Offerings of Model Family and
Options has been a Challenge to Improve Part Forecast
Slide 20
|
October 2010
Implemented Demantra Software to Improve Forecast
Accuracy and Enable Plan Linkages
Historical
data
•
Bayesian
Estimator
Multiple
causal
factors
Bayesian
Optimizer
Forecast
Combined
model
Seasonality
Promotion
Events
Statistical Forecasting
›
Bayesian-Markov Mixed Model
›
Causal Forecasting
•
Consensus Planning
•
Linkage Between Demand, Build, &
Material Plan
›
Option Mix is Defined for Individual
Model and Applied to its Respective
Model Family Growth
•
Econometrics
Results:

Causal
Analysis
Trend
Outlier
Detection
Cyclical
Patterns
Result of 5 sites that are supported by
Demantra (Global Planning) and IPO
(Centralized Buying):
 Business declined by 8.3%
 Raw inventory reduced by 35%
 Material Fill rate improved by 43%
Closed Loop President Led Process
Slide 21
|
October 2010
21
There is still significant risk in the S&OP
Plan versus Pd10 POR, $Min Q4
*Includes 3 days sales accrual for September 28 - 30. ($1.4M / day Americas, $500k / day AP, $700k/day Europe)
Slide 22
|
October 2010
Demantra then Links World Area Demand
Plan to Hub Build Plan…
2. Smooth out large buckets of backlog
1. Demand Plan +/- Intracompany
demands
3. Do not plan builds and material for
finished goods
Slide 23
|
October 2010
Hub Build Plans are further Linked to
Production Lines, incorporating Capacity
Max Capacity
Min Capacity
Build Plan
Actual Build
Slide 24
|
October 2010
Demantra Further Connects the Hub Build Plan to the
Primary Producer Build Plan
Primary Producer Plan is Tightly Linked
to Hub Plans
30%
40%
Primary Producer
Plan is Independent
of the Hub Plans
Oracle ASCP
F/A
Forecast
Planned
Order to
RTC
Wessling MRP
F/A
Forecast
RTC S&OP
RTC Total WW Supply
15%
15%
Wessling S&OP
Planned
Order to
RTC
Planned
Order to
RTC
SMMC MRP
F/A
Forecast
SMMC S&OP
Beijing MRP
F/A
Forecast
Beijing S&OP
5
%
Global Supply
Chain Planner
Oracle ASCP
Wessling MRP
F/A
Forecast
F/A
Forecast
RTC S&OP
RTC Planner
F/A
Forecast
F/A
Forecast
Wessling S&OP
SMMC S&OP
Wessling
Planner
Beijing MRP
SMMC MRP
Slide 25
SMMC
Planner
|
October 2010
After Demantra
Beijing S&OP
Before Demantra
Option Forecast Based on Part Usage and Highest
Usage Model Growth Rate (Before Demantra)
Flange Mix
Historical Usage
225
770
500
15%
52%
33%
1495 X (1+10%) =2173
326 + 1130 + 717 =2173
Historical Mix %
Forecast based on
Highest Usage
Growth Rate
Disconnect
Forecast
Growth Rate
500
20%
3051SC
1100
10%
3051C Rev 1
75
825%
300
7%
3051C Rev 5
3095
Forecast Mix does not Account for Different Model Growth Rates
Slide 26
|
October 2010
Option Mix is Defined for Individual Model and Applied to its
Respective Model Family Growth (After Demantra)
Model Forecast
Growth Rate
3051SC
3051C Rev 1
3051C Rev 5
500
20%
1100
10%
75
825%
3051SC Flange Mix
Rev 1 Flange Mix
Rev 5 Flange Mix
20% 45% 10%
15% 40% 20%
3095
Direct
Connect
300
7%
3095 Flange Mix
Model
Family Mix %
10% 25% 40%
395
Flange Forecast
+
1038
+ 629
Forecast Mix Completely Accounts for Each Model Mix
Change and Growth Rate
Slide 27
|
October 2010
0% 30% 45%
=2062
Key Messages : Sales & Operation Planning
• Reduces operations cost by optimizing
asset management through better
planning
• Is the key driver in managing and
reducing complexity
• Increases sales and customer
loyalty by improving RDSL & PDSL
Slide 28
|
October 2010
Managing the Complexity through
Product Segmentation
ATO
On-Demand
BTO
(Fast Track)
ETO
Specials
PTO
Buyouts
A#, T#, MA#,
N#, R#,
W#, K#, D#, P#,
F#, V#…
Service
Level
RDSL
PDSL
Business
Driver
Speed
Availability
Product Variety
Premium Price
Slide 29
|
October 2010
PDSL
PDSL
Customization
Premium Price
Vision: Integrated Supply Chain to Drive
Enterprise Excellence
Global Supply Chain Planner
Marketing
Demand
Plan
SC Planner
F/A & S/A
S&OP
Build
Plan
Material
Plan
Global Supply Chain
Purchasing
(IPO)
5-Year
End of Pipe Metrics
Suppliers
In Bound
Logistics
(Material Plan Execution)
External Customer
RDSL =
PDSL =
Distribution & Product Co.
Customer
Care
Internal Operations
ITO =
Final Assembly
Sub-Assembly
Out Bound
Logistics
(Build Plan Execution)
Customer
Buyers
Slide 30
|
October 2010
(IPO)
Customer
E-Global Supply Chain – Global Buying
BMMC
GTMC
RTC
Supplier
Global Buyer
SMMC
Wessling
BMMC
Wessling
Slide 31
|
October 2010
Portal
Supplier
SMMC
ASCP
GTMC
Portal / CP
RTC
Implementing Systems to Enable
Integrated Supply Chain Why is this critical to the


company?
Improving the SPEED and
SYNCHRONIZATION of
our Supply Chain results
in competitive advantage
FY 12 Key Strategic Plan
Measures it Improves
– Service Level (RDSL
and PDSL)
– Inventory reduction
(DOH)
– Increased Profit (cost
reduction)
– Share Gain (customer
satisfaction)
Slide 32
|
October 2010
VCP Business Processes & Solutions
Supply Chain Planning
Inventory Management
Inventory Optimization
DRP
Profitable
Revenue
Growth
Inventory
Reduction
Deal Management
TPM (CG)
DSR
Assortment Opti
Price Management
VCP
Assets
Optimization
&
Sales & Operation Planning
Integrated Business Planning
Manufacturing Insights
Slide 33
Utilization
|
October 2010
Sourcing Optimization
Assets Optimization
Network Optimization
Plant Resource Management
Production Scheduling
SUCCESSIVE
REFINEMENT
Executive Dash
Boarding
Sales and Account Teams
Executive S&OP Review
“Where are my
issues?”
Imbalance
COMMAND AND
CONTROL
Sync with
Finance
Demand Review
“Can I impact the
market demand?”
SENSE AND
CREATE
DEMAND
Demand Management
Consensus Demand
Cycle continues …
1
2
“Will network changes
help me meet demand
more profitably?”
End to End VCP
Command &
Control
Business as Usual
“How do I
schedule my plant
to maximize ROA”
Supply Review
5
3
DRIVE
EFFICIENCY
4
(PLANT LEVEL)
Plant Specific Plan
MANAGE RISK
PLAN NETWORK
SET RULES
Sourcing rules, etc
Operational Supply Demand Balancing
“Am I assured that I'm deploying and
producing in alignment with my S&OP plan?”
EXECUTE PLAN & MANAGE
EXCEPTIONS (E2E)
Manufacturing
Slide 34
|
October 2010
Sourcing &Supply Chain
Planning
World Class Supply Chain Solutions
Complete. Open. Integrated. Modular
Optimization
Optimize inventory holdings and
deploy inventory networks
Use advanced statistics and
causal factors
Real-Time Sales and Operations
Planning
Optimize networks and sourcing
decisions
Optimize networks and sourcing
decisions
Collaborate with customers
Collaborate with customers
Constraint based supply chain
planning
Constraint based supply chain
planning
Executive dashboards and
reporting
Executive dashboards and
reporting
Manage rolling forecasts
Collaborate with all constituents
on one number
on one number
on one number
Use basic statistics, alerts, and
seeded worksheets
seeded worksheets
seeded worksheets
Deploy fast MRP across multiple
ERP instances
ERP instances
ERP instances
From less complex to best in class
Competitive Necessity
Slide 35
|
Competitive Advantage
October 2010
Evolve at your own pace to a best in class solution
Efficiency
Effectiveness
Focus on return on assets
Incremental Value
Eliminate
spreadsheets
Focus on return on assets
Key Takeaways
• Value Chain Planning implementation is a journey, not a project
– each phase has its own short time to value, but one should
have a long term vision.
• Start Anywhere – Focus on the highest bang for your buck
within each BU/Region and don’t wait for ERP Implementation or
upgrade
• Pick your critical “green” KPIs – one cannot be perfect at all
measures – which KPIs defines you as a company, and meet
your strategy?
• Create transparency between All departments, Sales, Marketing,
Finance, and SC and align your Supply with your
Opportunities
Slide 36
|
October 2010
Additional Information About
Oracle Value Chain Planning visit
www.oracle.com\goto\vcp
Questions: [email protected]
[email protected]
Thank you!
Slide 37
|
October 2010

Integrated Business Planning Bridging the Gap Between Budgets and Reality

Transcription

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