1 © the delos partnership 2004 delos excellence project implementation process design
TRANSCRIPT
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1 © The Delos Partnership 2004
Delos Excellence Project Delos Excellence Project ImplementationImplementation
Process DesignProcess Design
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2 © The Delos Partnership 2004
Delos Change JourneyDelos Change Journey
MobiliseMobilise DesignDesign CommunicateCommunicate ReviewReviewUnderstandUnderstand
Identify quickIdentify quickBenefitsBenefits
DevelopDevelopChange VisionChange Vision
InternalInternalSell-inSell-in
ReviewReviewSystemsSystems
EstablishEstablish ResourcesResources
Gain quickGain quickBenefitsBenefits
DetailedDetailedProcess DesignProcess Design
Public/PrivatePublic/PrivateWorkshopsWorkshops
Develop Develop SystemsSystems
Develop TaskDevelop TaskTeamsTeams
Gain earlyGain earlyBenefitsBenefits
Document Document Policies etcPolicies etc
InternalInternalEducationEducation
CreateCreateSystemsSystems
EstablishEstablishOrganisationOrganisation
SecureSecureBenefitsBenefits
RefineRefinePolicies etcPolicies etc
AASSSSEESSSS
ContinueContinueEducationEducation
RefineRefineSystemsSystems
GainGainTeamworkTeamwork
AASSSSEESSSS
Cost/Cost/BenefitBenefit
DevelopDevelopBus StrategyBus Strategy
InitialInitialEducationEducation
AppointAppointSponsorSponsor
PPIILLOOTT
PPIILLOOTT
PPIILLOOTT
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3 © The Delos Partnership 2004
Task TeamsTask Teams
1. Integrated Enterprise Planning
2. Innovation and Project Management
3. Customer Relationship Management
4. Supply Management – Internal and External
5. Support Activities
6. Performance Measures
7. Data Accuracy
8. Continuous Improvement
9. People and Culture
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4 © The Delos Partnership 2004
Task ForceTask Force
Integrated Integrated Enterprise Enterprise Planning Planning
Integrated Integrated Enterprise Enterprise Planning Planning
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5 © The Delos Partnership 2004
Integrated Enterprise Integrated Enterprise PlanningPlanningComposition• Sponsor [chair]• Finance Director• Operations Director• Sales and Marketing Director• HR Director• IT Director• Project Leader
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6 © The Delos Partnership 2004
Integrated Enterprise Integrated Enterprise PlanningPlanningExternal Education
– Integrated Enterprise Planning Workshop– Detailed Process based workshops
Internal Education– Process– Software– Behaviour Change requirements
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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7 © The Delos Partnership 2004
Framework for Process Framework for Process ReviewReview
ProcessInputs Outputs
People
Behaviour/Culture
Measures/Performance Indicators
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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8 © The Delos Partnership 2004
IEP BenefitsIEP Benefits
1. Visibility
2. One set of numbers
3. Long-Term not short term
4. Easier to derive budget
5. Simulation
6. Financial review
7. Ability to deliver strategy
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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9 © The Delos Partnership 2004
Integrated Enterprise Integrated Enterprise PlanningPlanningIssues to address :• Process Ownership• Operation of processes
– Innovation– Demand– Supply– Support– Prioritisation– Senior Team Review
• Timetable of meetings• Agenda• Meeting attendees• Family Groupings• Performance Measures
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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10 © The Delos Partnership 2004
Integrated Enterprise Integrated Enterprise Planning - IssuesPlanning - Issues1. Link to Board Meeting
• Capital Expenditure• Sourcing of Production• Acquisition• Business Restructuring• Policy Changes
2. Dealing with major crises• Need for fast track process
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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11 © The Delos Partnership 2004
Integrated Enterprise Integrated Enterprise PlanningPlanning1. Need for aggregation facility
by family
2. Rolling 12 month picture
3. Actual to date plus rest of year
4. Spreadsheet or specialist software
5. Integration of Demand, Supply and Inventory/backlog targets
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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12 © The Delos Partnership 2004
Integrated Enterprise Integrated Enterprise Planning - StagesPlanning - Stages1. Pilot activity
2. Have first meeting
3. Concentrate on one/two families
4. Add families asap
5. All families required to make it useful
6. Financials
7. Replace the budget
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13 © The Delos Partnership 2004
MD/Sponsor’s roleMD/Sponsor’s role
1. Call the first meeting
2. Encourage the fact that it is a different way of running the business
• Honesty, realism, trust• Rolling budget
3. It involves more detail maybe than before
4. Attend each meeting
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14 © The Delos Partnership 2004
Integrated Enterprise Integrated Enterprise PlanningPlanning# Activity Target Complete1 Responsibility for implementation of Integrated
Enterprise Planning assigned to MD or equivalent
2 Initial Workshop on Sales and Operations Planning complete
3 Product Families, Planning Horizon, and Time Fences agreed
4 Performance measurements to be reported have been agreed
5 Meeting cycle agreed and timetable for next 12 month published
6 Process started with one Family
7 All other families implemented in the process
8 Financial linkage to Budget completed
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15 © The Delos Partnership 2004
Task ForceTask Force
InnovationInnovationAndAnd
Project Management Project Management
InnovationInnovationAndAnd
Project Management Project Management
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16 © The Delos Partnership 2004
Task TeamTask Team
• Innovation Process Owner [Chair]
• Marketing Manager
• Production Manager
• Industrial Engineering manager
• Purchasing
• Quality
• Research and Development
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17 © The Delos Partnership 2004
Innovation EducationInnovation Education
External Education– Project Management Workshop– PMI Accreditation– Software understanding
Internal Education– Project Management course– Software understanding
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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18 © The Delos Partnership 2004
DesignDesign
1. Stage Gate process
2. Business Case management
3. Prioritisation of projects
4. Project Review
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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19 © The Delos Partnership 2004
Management of InnovationManagement of Innovation
Stage/Gate Process
Formal Process for Managing Project
Gate0
Gate0
Gate1
Gate1
Gate2
Gate2
Gate3
Gate3
Gate4
Gate4
Stage 0Stage 0 Stage 1Stage 1 Stage 2Stage 2 Stage 3Stage 3 Stage 4Stage 4
Review
InvestigateInvestigate FinancialCase
FinancialCase
DevelopDevelop TestTest LaunchLaunch
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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20 © The Delos Partnership 2004
Bill of Activity – Link with Bill of Activity – Link with PlanningPlanning
ShipShip
PackPack
ProcessValidation
ProcessValidation
DevelopProcess
DevelopProcess
SourcePacks
SourcePacks
DevelopArtwork
DevelopArtwork
SourceEquipment
SourceEquipment
DesignLayout
DesignLayout
Lt = 2 weeksLt = 2 weeks
Lt = 6 weeksLt = 6 weeks Raw Material
Raw Material Lt = 4 weeksLt = 4 weeks
Lt = 10 weeksLt = 10 weeks
Lt = 6 weeksLt = 6 weeks
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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21 © The Delos Partnership 2004
BenefitsBenefits
1. Control over innovation
2. Fewer expensive mistakes
3. On time product introduction
4. Management of too many initiatives
5. Faster implementation timescaleThank goodness for the last minute or
nothing will get done….
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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22 © The Delos Partnership 2004
OrganisationOrganisation
1. Innovation Manager
2. Programme Managers
3. Responsibility for Projects
4. Resource owners linked into Programme Managers
5. Cross-functional and team based activities
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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23 © The Delos Partnership 2004
Innovations ManagerInnovations Manager
Strategy
Innovation Manager
DevelopmentIdeas
ProjectPlans
DevelopmentPlans
Supply Plans
ProjectSystem
Prioritised PlansPrioritised Plans
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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24 © The Delos Partnership 2004
SystemsSystems
1. Standard Project Management
tools• Phases/Activities/Tasks• GANTT and PERT Charts
2. Displays capacity
3. Multiple projects aggregated
4. Provides Earned Value Measurement
5. Critical Path analysis clear
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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25 © The Delos Partnership 2004
Innovation ManagementInnovation Management
# Activity Target Complete1 Responsibility for implementation of Innovation
Management assigned to an Innovation process owner
2 Initial Workshop on Innovation and Programme Management
3 Stage Gate and Business Filter process defined. Agreement on sign off authority levels, and prioritisation
4 Performance Measures for successful completion of milestones agreed. Earned Value calculation agreed.
5 Software for Programme Management tested and signed off
6 Cross Functional Programme management organisation established.
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26 © The Delos Partnership 2004
Task ForceTask Force
Sales ForecastingSales ForecastingAndAnd
Demand Management Demand Management
Sales ForecastingSales ForecastingAndAnd
Demand Management Demand Management
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27 © The Delos Partnership 2004
Task ForceTask Force
Composition
• Marketing Director [chair]
• Sales Representative
• Purchasing
• Master Scheduling
• IT Manager
• Project Team Member
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28 © The Delos Partnership 2004
EducationEducation
External Education– Sales Forecasting and Demand
Management– Customer Relationship Management
Internal Education– Process– Software– Performance Measurement
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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29 © The Delos Partnership 2004
DesignDesign
Issues to address:– Sales Forecasting
• Level, Unit of Measure, Horizon and Time Buckets• Forecast Consumption• Abnormal Demand
– Customer Relationship Management• Organisation around customers• Use of Software• Electronic links/Planning links
– One set of numbers• Link to targets and actual versus budget
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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30 © The Delos Partnership 2004
Design - IssuesDesign - Issues
1. Responsibility for Forecast
2. Frequency of Forecasting
3. Management of Abnormal Demand
4. Sticking to the rules
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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31 © The Delos Partnership 2004
BenefitsBenefits
1. Visibility
2. Forecast by product – not just value
3. One set of numbers
4. Supply Chain can use numbers
5. Forecast Accuracy measure leads to stability
6. Know the customers
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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32 © The Delos Partnership 2004
OrganisationOrganisation
1. Need for a Demand Manager
2. Link to Customer Services
3. Responsibility for Forecast • Sales and Marketing
4. Customer Facing teams
5. Demand control versus planning
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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33 © The Delos Partnership 2004
SystemsSystems
1. Specialist Forecasting system• Linear regression• Time series• Simulation
2. Should be easy to understand3. Capability to enter in Marketing/Sales input4. Measures Forecast accuracy5. Allows aggregation and proration easily6. Customer Relationship system
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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34 © The Delos Partnership 2004
IssuesIssues
1. Responsibility for Forecast2. Can’t forecast – our business is different3. Only forecast 20 % that account for 80 % of
value4. Only forecast by value5. Only provide a forecast for 6 months6. Forecast accuracy – but what about beating
the budget ?7. Salesmen should sell, and not waste time
forecasting
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35 © The Delos Partnership 2004
SolutionsSolutions
1. Sales and Marketing Director to lead
2. Employ good system to deal with 20 % by value, and manage through Demand Manager
3. Recognise Value forecast of no use
4. Adopt new Measures of Performance
5. Sales can save time through forecasting
6. Accurate data for CRM system
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36 © The Delos Partnership 2004
Customer Relationship Customer Relationship ManagementManagement# Activity Target Complete1 Responsibility for implementation of Customer
Relationship Management assigned to an Demand process owner
2 Initial Workshop on Sales Forecasting and Demand management and CRM
3 Forecast process agreed around Level, Horizon, Units and Buckets, and frequency of update
4 Responsibility for Sales Forecasting established with Sales and Marketing
5 Policies on Forecast Consumption, abnormal demand, and use of Available to promise defined, and approved by Steering committee
6 Software for Sales Forecasting and Demand management and Customer Relationship Management tested and signed off
7 Demand Planning and Demand Management organisation set up under Sales and Marketing
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37 © The Delos Partnership 2004
Task ForceTask Force
MasterMasterProductionProductionScheduling Scheduling
MasterMasterProductionProductionScheduling Scheduling
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38 © The Delos Partnership 2004
Master Scheduling Task Master Scheduling Task ForceForceComposition• Marketing Director [chair]• Sales• Purchasing• Finance• Master Scheduling• IT Manager• Project Team Member
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39 © The Delos Partnership 2004
Master SchedulingMaster Scheduling
External Education– Supply Chain Techniques– Supplier Relationship management
Internal Education– Process– Software– Performance Measurement– Behaviour Change
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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40 © The Delos Partnership 2004
Master SchedulingMaster Scheduling
Issues to address:– Make To stock/Make to Order/Assemble to Order– Manufacturing/Sub-Contract– Management of Field service Capability– Level at which to MPS– Use of Rough Cut and Detailed Capacity Planning– Use of Demonstrated Capacity– Available to Promise – Time Fences– How to handle Abnormal Demand– Link to Integrate Enterprise Planning– Creation of Work To Lists for Field Service– Responsibility to Plan the Work– Use of Action Messages
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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41 © The Delos Partnership 2004
Master SchedulingMaster Scheduling
Design is crucial• Make to Order/Assemble to Order/Make
to Stock• Bill of Material structure to support this• OE/Spares; Finished Goods/Bulk• Forecast Consumption• Available to Promise• Handling of Field Sales/Implementation
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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42 © The Delos Partnership 2004
Master Scheduling PolicyMaster Scheduling Policy
• Forecasting Process
• Field Sales Planning and Execution
• Management of Abnormal Demand
• Time Fences
• Responsibility for change
• Target Service Levels
• Safety Stock policies
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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43 © The Delos Partnership 2004
Master Scheduling - Master Scheduling - benefitsbenefits1. Improved Delivery to Promise
and request
2. Achievable Plan – Field Sales and Supply
3. No backlogs
4. Stability in the supply chain
5. Manufacturing know that they can make it
6. Field Service know that they can deliver it
7. Suppliers have achievable due dates
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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44 © The Delos Partnership 2004
MPS OrganisationMPS Organisation
• Planning Organisation• Supply Planning and Field Service Planning• Vertical vs Horizontal• Timing of new planners• Training in new ways of working• Independence• Role of Sales and Marketing• Role of Master Scheduler
– Manages Supply Plans– Manages Field Service Plans
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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45 © The Delos Partnership 2004
MPS Software needsMPS Software needs
1. Firm Planned Order2. Forecast Consumption3. Abnormal Demand Filters4. Available to Promise [2 level ?]5. Aggregation6. Rough Cut Capacity Planning7. Time Fences8. Forecast Interface9. Order Entry Interface10. Final Assembly Scheduling
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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Master Production Master Production SchedulingScheduling# Activity Target Complete1 Responsibility for implementation of Supply
Management assigned to Marketing Process owner
2 Initial Workshop on Sales Forecasting and Demand management and CRM
3 Model for Master Scheduling established which specifies how Make To stock, Assemble To order and Engineer to Order will operated
4 Software checked for ability to support the Master Scheduling model.
5 Policies on Time Fences and Changes to Master Schedule agrees and approved by Steering committee
6 Performance measures and target service levels agreed
7 Master Scheduling Organisation established which follows Vertical Planning concept.
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47 © The Delos Partnership 2004
Task ForceTask Force
SupplierSupplierRelationshipRelationshipManagement Management
SupplierSupplierRelationshipRelationshipManagement Management
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48 © The Delos Partnership 2004
Task ForceTask Force
Supply Chain process owner• Purchasing• Planning• Finance• Development• Stores• Systems• Project Team member
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49 © The Delos Partnership 2004
EducationEducation
External Education– Procurement Master Class– Supplier Relationship Management
Internal Education [to suppliers]– New ways of working– Use of e-procurement
Internal Education [to employees]– Effective Procurement
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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50 © The Delos Partnership 2004
DesignDesign
• Procurement separate from Supplier Management
• Measurement of suppliers– Right First Time– Quality
Focus on Total Value– Total Cost Reduction– Total Cost avoidance
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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51 © The Delos Partnership 2004
Supplier Relationship Supplier Relationship ManagementManagement• Clear Vendor agreements• Vendor contracts and agreements• Measurement
– Delivery– Price– Quality– Lead Times
• Use of e-procurement
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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52 © The Delos Partnership 2004
ProcurementProcurement
• Analyse products and
suppliers– Major/Minor– Critical/non-critical
• Analyse total spend
• Look for opportunities
• Set targets for cost reduction
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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53 © The Delos Partnership 2004
BenefitsBenefits
• Total cost reduction• Effective negotiation• Lead time reduction• Quality improvement• Inventory reduction• On time deliveries• Co-development programmes• Integration• Long-term co-operation
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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54 © The Delos Partnership 2004
OrganisationOrganisation
Procurement Management– Buyers who understand supplier processes– Buyers who can make deals
Supplier Relationship Management– Manages schedules– Deals with day to day issues– Encourages early warning– Keeps system up to date
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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55 © The Delos Partnership 2004
SystemSystem
• Vendor Schedule• Total spend analysis by :
– Category of spend– Value
• Performance Measures– On time– Quality
• Make vs buy options
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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56 © The Delos Partnership 2004
Creation of Vendor Creation of Vendor ScheduleSchedule
1 2 3 4 5 6 7 8
Projected
Gross Requirements
10 10 10 10 20 20 20 20
Scheduled Receipts 20
Projected Available Balance
30
Planned Order Release
Supplier Schedule
Part Number : 14356 D escription : Red Pen
Line Part Number Description Qty ScrapPer
Factor10 43768 Pen Barrel 1 0.020 76452 Finished Nib 1 0.030 89563 Cap 1 0.0
Bills of MaterialPlanning Data• Lead Times• Order Quantities• Safety Stock
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57 © The Delos Partnership 2004
Vendor ScheduleVendor Schedule
Part
No.
1/7 8/7 15/7 22/7 29/7 5/8 12/8 19/8 26/8 Sept Oct 12 m
Total
23467 20 20 20 20 20 80 80 960
24566 10 10 30 60 60 1040
35467 35 70 70 35 35 140 140 1680
14376 20 20 40 40 160 180 1920
25436 10 10 10 40 80 620
Supplier : ACME Grinding Equipment Limited
Orders Pay for materials Visibility
Orders : Part Qty Due
145326 23467 20 1/7
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58 © The Delos Partnership 2004
Purchasing Task ForcePurchasing Task Force
# Activity Target Complete1 Task Force established with Purchasing as the Task
Force Leader
2 Establish Vendor Scheduling reporting process, and use.
3 Determine Purchasing Strategy based on current spend map
4 Determine measurement criteria for suppliers, and establish SMART goals to be shared with suppliers
5 Carry out Education programme with suppliers focussing on the key elements of the Purchasing strategy.
6 Set up Qualified Vendor group
7 Set up organisation that differentiated between Procurement and schedulers.
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59 © The Delos Partnership 2004
Task ForceTask Force
AccuracyAccuracyOf allOf all
Business DataBusiness Data
AccuracyAccuracyOf allOf all
Business DataBusiness Data
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60 © The Delos Partnership 2004
Data AccuracyData Accuracy
All data needs to be accurate• Bills of Materials• Routings• Inventory• Work Centre• Planning Data• Customer/Vendor data• Project Team Member
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61 © The Delos Partnership 2004
Data AccuracyData Accuracy
Sub-Teams ?• Inventory• Bills of Materials• Routings• Planning Data• Customer Data• Vendor Data• Financial Data
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62 © The Delos Partnership 2004
Data AccuracyData Accuracy
External Education– Data Accuracy Course– Bill of Material Course– Inventory Accuracy Course
Internal Education– Bills of Materials [Quality, Structure and Change
Control]– Routings– Inventory– Planning Data– Customer and Vendor Data
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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63 © The Delos Partnership 2004
Task ForceTask Force
Bills of Bills of MaterialsMaterialsBills of Bills of
MaterialsMaterials
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64 © The Delos Partnership 2004
BOM Task ForceBOM Task Force
Composition
• Technical Director [chair]
• Planning
• Marketing
• Purchasing
• Manufacturing
• Project Team Member
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65 © The Delos Partnership 2004
Steps to getting BOM Steps to getting BOM AccuracyAccuracy1. Identify how to get to
one single Database2. Assign responsibility for accuracy3. Check accuracy of sample group4. Get over emotional issues of part numbers5. Create BOM policies6. Get Control group to 100 %7. Fix Database8. Implement Change control process9. Continuously Monitor accuracy
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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66 © The Delos Partnership 2004
BOM Task ForceBOM Task Force
Issues to address• Part numbers – non significant• Planning Bill and Configuration• What goes on the BOM• Backflush or not• Structure [simplify]• Engineering/Product Change Control• Link to Design/Development systems• Phase in/Phase Out• Responsibility
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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67 © The Delos Partnership 2004
BOM StructuringBOM Structuring
1. Planning/ Stocking levels2. Implications on Costing3. Forecasting issues4. How to enter orders5. Master Schedule vs Final Assembly
Schedule6. Product Specifications/Quality
Documentation
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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68 © The Delos Partnership 2004
BOM Change ControlBOM Change Control
1. Establish Formal process for controlling changes to Part Numbers, BOM’s and routes
2. Request for Change3. Documentation to support changes
• Engineering change request• Engineering change Notice• Audit trail of changes
4. Techniques for phasing in/phasing out of materials
5. BOM Change control group to monitor changes
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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69 © The Delos Partnership 2004
Example of Data Change FormExample of Data Change Form
Change Note Number : Date of Request : __/__/__ Change Type : Add/Amend/Delete
Originator: Effective Date:-Requested __/__/__-Actual __/__/__
Part number :
Department : BOM Attached ? : Y/N
Other Related Changes :
Reason for Request for change
Notification given to : Tick
Description of Change : Development
Manufacturing
Planning
Financial Consequences of Change : Purchasing
Quality
Sales and Marketing
Approved by : Date of Approval __/__/__ Regulatory
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70 © The Delos Partnership 2004
Example of Data Change Example of Data Change FormForm
Production Quantity on hand: Rework and Scrap Value
Quantity in WIP : Routing Change
Purchasing Supplier : New Part Number
New Cost : New Order Qty
On order : New Safety Stock
Quality Specifications : New Lead Time
Test requirements: Customer Code
Development Reference no,: Vendor Code
BOM Change note: Batch control
Sales Customers Financial Projection attached: Y/N
Quantity on hand
Finance Standard Cost Data Controller :
Regulatory Standards affected
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71 © The Delos Partnership 2004
BenefitsBenefits
1. Accurate Costs2. No duplication3. Ordering of right product in right
quantity4. Managed introduction of products –
less obsolescence5. Suppliers deliver right product at right
time
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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72 © The Delos Partnership 2004
OrganisationOrganisation
1. Responsibility for• Add,Amend Delete
2. BOM Administrator
3. BOM Approval Group
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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73 © The Delos Partnership 2004
SystemsSystems
1. Can accommodate design/development
2. Phantoms/Pseudos
3. Configuration ability
4. Where used facility
5. Single Level/Multiple level
6. Two level Planning Bill
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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74 © The Delos Partnership 2004
Process for getting Data Process for getting Data RightRight
0
20
40
60
80
100
120
1 2 3 4 5 6 7 8 9 10 11 12
Accuracy
Sample Group
Audit
Fix Data Base
Sample Group
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75 © The Delos Partnership 2004
Data Quality – Bills of Data Quality – Bills of MaterialMaterial# Activity Target Complete1 Task Force established with responsibility set up
under Development department
2 Bill of Material objectives agreed, with Target accuracy of 100 % of all BOM’s
3 Sample of current Bills of Material used to verify current level of accuracy of BOM’s
4 Bill of Material Policy Established on Accuracy of BOM’s and agreed
5 Correction of Database undertaken for the whole database.
6 Procedure for reporting of BOM inaccuracy completed and established.
7 Process for prompt correction of Bills of Materials within Development department agreed and established.
8 Bill of material Administrator role defined and filled within the Planning Deparment
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76 © The Delos Partnership 2004
Data Quality – Structure of Data Quality – Structure of Bills of MaterialBills of Material# Activity Target Complete1 Task Force established with responsibility set up
under Planning Function
2 Structure of BOM’s agreed with reference to the MPS task force and decision on MTS/ATO/MTO
3 Software checked to ensure that configuration ability is supported
4 Resource identified for restructuring of Bills of Materials.
5 Bill of Material Database populated with restructured Bills of materials.
6 Restructured Bills of Materials verified for accuracy as part of Bill of Material Quality audit.
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77 © The Delos Partnership 2004
Data Quality – Bills of Data Quality – Bills of Material Change ControlMaterial Change Control# Activity Target Complete1 Task Force established with responsibility set up
under Planning Function
2 Current change control procedures and policies reviewed for completeness
3 Software review of functionality for Change Control completed, and documented
4 New Procedures for BOM Change control identified, and established with policies in place for handling phase in and phase out
5 New procedures reviewed and agreed through pilot process
6 BOM Change control group established to review impact of proposed design and development changes
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78 © The Delos Partnership 2004
Task ForceTask Force
RoutingsRoutingsAnd And
Work CentresWork Centres
RoutingsRoutingsAnd And
Work CentresWork Centres
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79 © The Delos Partnership 2004
Steps to getting Routing Steps to getting Routing AccuracyAccuracy1. Identify how to get to one single Database
2. Assign responsibility for accuracy
3. Check accuracy of control group
4. Create Routing and Work Centre policies
5. Get Control group to 100 %
6. Fix Database
7. Implement Strong Change control process
8. Continuously Monitor accuracy
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80 © The Delos Partnership 2004
ROUTING ACCURACYROUTING ACCURACY
Basis :Basis : Represents the way that the product is made and moves through the factory via work centres
Represents the way that the product is made and moves through the factory via work centres
Missing/Unnecessary Operation
Missing Work Centre
Wrong Operation Sequence
Wrong Work Centre
No REALISTIC Standard
Missing/Unnecessary Operation
Missing Work Centre
Wrong Operation Sequence
Wrong Work Centre
No REALISTIC Standard
Types of Error :
Types of Error :
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81 © The Delos Partnership 2004
Ways to check accuracy of Ways to check accuracy of RoutingRouting
Check with knowledgeable people Track product through manufacture Assemble absolutely according to routing Performance measures shows
Late or early completion of product
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82 © The Delos Partnership 2004
Task ForceTask Force
InventoryInventoryAndAnd
Work-in-ProcessWork-in-Process
InventoryInventoryAndAnd
Work-in-ProcessWork-in-Process
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83 © The Delos Partnership 2004
Inventory Task TeamInventory Task Team
Composition• Warehouse Manager [chair]• Stores Supervisors• Production manager• Purchasing• Logistics• Planning• Project Team Member
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84 © The Delos Partnership 2004
Steps to Gaining Inventory Steps to Gaining Inventory AccuracyAccuracy
1. Establish levels of current accuracy2. Establish control group to identify causes of
errors3. Review material flows4. Create Limited Access5. Define systems and processes6. Educate users7. Train users8. Cycle count9. Eliminate annual physical10. Never give up the challenge
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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85 © The Delos Partnership 2004
Inventory Task TeamInventory Task Team
Issues to address• Limited access to stores• Process flows• Backflushing or not• Accuracy of equipment• Number of locations• Cycle counting• People in stores• Getting rid of the annual physical
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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86 © The Delos Partnership 2004
Cycle CountingCycle Counting
1. Part number cycle counting• Random• ABC Method
2. Location cycle counting• Fixed cycle by location• Count what is easy to count• Skip large amounts
3. Eliminate Annual physical
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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87 © The Delos Partnership 2004
BenefitsBenefits
1. Less time spent looking
2. Reliable system
3. Accurate promises to customer
4. Less surprise write-offs
5. Less inventory
6. Planning system can be used
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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88 © The Delos Partnership 2004
OrganisationOrganisation
1. Warehouse Manager responsible for accuracy
2. Stores people responsible for accuracy
3. Supervisors responsible for lineside accuracy
4. Only recognised personnel allowed in stores
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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89 © The Delos Partnership 2004
SystemsSystems
1. Multiple Locations2. Locating system by location and part
number3. System reports
• Stock Status by part number• Stock status by location• Transaction history by Part number
4. Backflushing
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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90 © The Delos Partnership 2004
Process for getting Data Process for getting Data RightRight
0
20
40
60
80
100
120
1 2 3 4 5 6 7 8 9 10 11 12
Accuracy
Control Group
Audit
Fix Data Base
Control Group
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91 © The Delos Partnership 2004
Data Quality - InventoryData Quality - Inventory
# Activity Target Complete1 Task Force established with responsibility set up
under Warehouse Manager
2 Inventory Data Quality objectives agreed, with Target accuracy of 98 % of all items with 0 tolerance
3 Process for movement of inventory, and recording of Inventory Transactions completed
4 Review of required equipment and technology completed and recommendations accepted
5 Control Group cycle counting established, in order to identify errors
6 Control Group achieves 100 %
7 Policies and Procedures for Inventory process in Stores and Factory agreed and communicated.
8 Initialisation of Balances complete
9 Systematic Audit established using Process Control cycle counting.
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92 © The Delos Partnership 2004
Task ForceTask Force
Item MasterItem Masterandand
Planning DataPlanning Data
Item MasterItem Masterandand
Planning DataPlanning Data
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93 © The Delos Partnership 2004
Planning Data Task TeamPlanning Data Task Team
Composition
• Operations Director [chair]
• Manufacturing
• Purchasing
• Industrial Engineer
• Planning
• Project Team Member
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Item Master Data Used Item Master Data Used in Planningin Planning
Part numberDescriptionUnit of measureMake or buyLead timeFirm Planned FenceOrder quantityMinimums and multiplesSafety stockScrap factorYield factorEngineering drawing numberCommodity codeFamily codePlanner/buyer codeCustomer address and code numberSuppliers address and code number
All must be accurate And thought through
correctly
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Planning Data Task TeamPlanning Data Task Team
Issues to address
• Lead Time consistent with Manufacturing Lead Time
• Safety Stocks though through and understood
• Order Quantities set up in line with Manufacturing/Purchasing common-sense.
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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Task ForceTask Force
Finance andFinance andSupportSupport
Task ForceTask Force
Finance andFinance andSupportSupport
Task ForceTask Force
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Task ForceTask Force
• Finance Director [chair]
• Materials
• Manufacturing
• Marketing
• Quality
• Purchasing
• Project Team Member
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Support Task ForceSupport Task Force
External Education– Top Management Course
Internal Education– Financial Planning and Costing– New Performance Measures
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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Finance DesignFinance Design
• Link Annual Budget to IEP
process
• Costing updated from system
• Financial planning based on IEP
• Eliminate unnecessary financial inspection
• Eliminate Annual physical stock check
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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BenefitsBenefits
• Less duplication of data
• Eliminate wasted time on budget preparation
• More accurate costs
• Save time and money on inventory calculation
• Better base information
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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Finance systemsFinance systems
• Integration of financial
planning with volume planning
• 36-42 months horizon
• Costing direct from BOM’s and routings
• Development of KPI’s from Data Warehouse
• Simulation ability for what-ifs
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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Finance Task ForceFinance Task Force
# Activity Target Complete1 Task Force established with Finance manager as the
Task Force Leader
2 Establish Costing process based on BOM’s to reflect Standard or Average actual costs
3 Determine how Accounts Payable, Accounts Receivable and General Ledger will work
4 Develop process for providing Financial Planning process as linked to the IEP process
5 Establish how the Budget will be prepared from the ERP system
6 Develop reports from the system that will generate Cash Flow reports and simulations
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Task ForceTask Force
PerformancePerformanceMeasuresMeasures
PerformancePerformanceMeasuresMeasures
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Task ForceTask Force
• HR Director [chair]• Finance• Quality• Sales and Marketing• Manufacturing• Procurement• Development• Project Team Member
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Performance MeasuresPerformance Measures
External Education– Performance Measures
Internal Education– New Performance Measures
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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New KPI’sNew KPI’s
1. Review Strategy
2. Determine key objectives
3. Develop the Delos Seven Measures
4. Assign responsibility
5. Establish root cause analysis
6. Develop Goal Deployment and relationship to Personal Goals
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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107 © The Delos Partnership 2004
Measurement - BasicsMeasurement - Basics
VISION AND STRATEGY
OBJECTIVESOBJECTIVES
TARGETSTARGETS
MILESTONESMILESTONES
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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Link to Organisational Link to Organisational HierarchyHierarchy
Managing Director
Directors/Process Owners
Managers/Team Leaders
Operators/Team members
LINK THEM
VISION AND STRATEGY
OBJECTIVESOBJECTIVES
TARGETSTARGETS
MILESTONESMILESTONES
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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Root Cause AnalysisRoot Cause Analysis
Inaccurate Forecast
Inaccurate Forecast
PeopleProcesses
Pessimism/Optimism
Lack of Time
Lack of Trust
Systems Data
Lack of Sales Plan
NPD Process
Lack of Forecasting System
Customer EDI SystemInaccurate Actual Demand Data
Wrong Code
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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BenefitsBenefits
1. Alignment to strategy
2. Congruent goals
3. Cascaded objectives and targets
4. Focus on operational measures and not results
5. Improved Return on Capital Employed
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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OrganisationOrganisation
1. Develop Process owners
2. Cross functional development of processes
3. Tie measures to personal goals
4. Personal Development plans
5. Teams to develop processes – not functional silos
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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Process Measures Process Measures OwnershipOwnership
Sales Prod Tech Log Mktg
New Product Process NPDOwner
Sourcing Process SupplyOwner
Customer Process DemandOwner
NPDOwnerCreative Process
Business Support – Finance, IT, HR
SeniorManagement Team
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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SystemSystem
1. Data Warehouse to store Information2. Create reports direct from system3. Needs storage of original promise date to
customers and suppliers4. Needs Forecast accuracy reports5. Needs collection of data on deliveries to
customers6. Visibility of results for suppliers
AASSSSEESSSS
AASSSSEESSSS
EDUCATION
STRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATION
SYSTEMS
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Measures - IssuesMeasures - Issues
1. Traditional approach
2. Silo management
3. Corporate reporting process
4. Focus on Financial reporting
5. Actual versus budget
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Measures - solutionsMeasures - solutions
1. Involve Corporate in development of measurement
2. Develop IEP in place of Annual budget
3. Eliminate many financial reports
4. Develop process ownership
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People ValuesPeople Values
TraditionalTraditional NowNow FutureFutureProcess Process problemsproblems
Not my job Ownership Accountability
Management Management StyleStyle
Supervise Facilitator/
Team Leader
Coach
Working StyleWorking Style Individual Team Empowered
Teams
Training and Training and
EducationEducation
Non-existent Luxury Necessity
KnowledgeKnowledge Ignorant Understands Expert
Attitude to Attitude to PeoplePeople
Liability Cost Asset
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Today’s RewardsToday’s Rewards
• Managing Director gets bonus if budget profit exceeded
• Marketing Director gets promoted if he beats profit target and budget
• Manufacturing Director gets paid if overheads recovered
• Technical Director gets delighted if complexity achieved
• Finance Director becomes Group FD if inventory reduced
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Tomorrow’s RewardsTomorrow’s Rewards
• Based on targets and milestones
• Based on forward looking objectives
• Based on constant appraisal
• Based on throughput not output
• Need to recognise value of teams
• Recognises inventory as a liability
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Appraisal ProcessAppraisal Process
• Continual through the S & OP process• Should involve 180˚ appraisal and appraisal
of peers through honest feedback• Requires enhanced people and team skills• Give and receive constructive review• Requires removal of blame culture• Reduced need for the cult of the hero
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Link the Appraisal Process Link the Appraisal Process to the Strategyto the Strategy
StrategyStrategy Grow BusinessGrow Business Increase Market ShareIncrease Market Share
MeasuresMeasures
StrategyStrategy Grow BusinessGrow Business Increase Market ShareIncrease Market Share
MeasuresMeasures
Sales ManagerSales Manager … ….. … ….... … …......
Sales ManagerSales Manager … ….. … ….... … …......
Planning ManagerPlanning Manager … ….. … ….... … …......
Planning ManagerPlanning Manager … ….. … ….... … …......
R & D ManagerR & D Manager … ….. … ….... … …......
R & D ManagerR & D Manager … ….. … ….... … …......
New Product DirectorNew Product Director … ….. … ….... … …......
New Product DirectorNew Product Director … ….. … ….... … …......
Customer DirectorCustomer Director … ….. … ….... … …......
Customer DirectorCustomer Director … ….. … ….... … …......
Supply DirectorSupply Director … ….. … ….... … …......
Supply DirectorSupply Director … ….. … ….... … …......
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Goal DeploymentGoal Deployment
EmployeesOwner
Supply ChainOwner
InnovationOwner
CommunityOwner
CustomerOwner
ShareholderOwner
TARGETSSenior Management
Business Support
Supply Management
Demand Management
New Activity Management
PERSPECTIVE
Process Owners
GOALS
Objectives
PROCESS
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Performance MeasuresPerformance Measures
# Activity Target Complete1 Task Force established with Finance manager as the
Task Force Leader
2 Establish Vision, Goal and Objectives together with Targets for achieving the objectives
3 Establish how the system will provide Performance measures, and data for problem solving
4 Carry out Benchmarking exercise to establish best in class performance for targets
5 Layout Process ownership, and responsibility for cascaded sets of measures
6 Review current reward structures, and establish new performance measures contained within Personal Development Plans
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Key activitiesKey activitiesMONTHS
Activity 0-3 4 4-7 8 9-11 11-14 15
Education Project Team Pilot Managers Pilot Users Internal Pilot Live
IEP Define Process Pilot Pilot process Pilot Add all families Pilot Live
Innovation Define Process Pilot Define policies Pilot Establish organisation Pilot Live
Demand Plan Define Process Pilot Define Policies Pilot Establish organisation Pilot Live
MPS MTS v ATO Pilot Define Policies Pilot Establish organisation Pilot Live
IRA Accuracy Control Group Init Cycle Counting Pilot Live
BOM Accuracy Find Errors Fix Errors Upload Live
BOM Structure Define Restructure and set up all Bills of Materials Live
Routings Find errors Fix Errors Live
Planning Data Define Set up Live
Purchasing Develop Purchasing Tools Pilot Educate all vendors Live
Manufacturing Develop Lean Manufacturing Pilot Establish across business Live
Finance Develop costing and IEP/Budget Link Pilot Develop costs, Inv and WIP values Live
Measures Develop Vision, objectives and measures Pilot Establish across business Live
Software PT debug Pilot Carry out Software modifications and interfaces Pilot Live