advanced supply chain planning at usg planning at usg

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Advanced Supply Chain Planning at USG Planning at USG Amy David, Logistics Planning and Process Development Manager Ian Cole, Supply Planner

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Page 1: Advanced Supply Chain Planning at USG Planning at USG

Advanced Supply Chain Planning at USGPlanning at USG

Amy David, Logistics Planning and Process Development Manager

Ian Cole, Supply Planner

Page 2: Advanced Supply Chain Planning at USG Planning at USG

Agenda

�USG Overview

�Building the Case for ERP

�ERP Implementation

© Copyright 2008 USG

�Benefits and Lessons Learned

�Question & Answer

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Page 3: Advanced Supply Chain Planning at USG Planning at USG

USG Overview

Page 4: Advanced Supply Chain Planning at USG Planning at USG

USG Corporation

� NYSE – listed since 1931; Ticker: USG

� $4.6 billion in sales in 2008

� Leader in its 3 core businesses

� North American Gypsum

© Copyright 2008 USG

� North American Gypsum

� Worldwide Ceilings

� Building Products Distribution

� 12,800 employees

� 107 years old

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Page 5: Advanced Supply Chain Planning at USG Planning at USG

North American Gypsum

� Largest network of facilities

� Fewest miles-to-market

� Vertically integrated gypsum quarries and paper mills

© Copyright 2008 USG

paper mills

� Most comprehensive product offering

� Sheetrock

� Durock

� Fiberock

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Page 6: Advanced Supply Chain Planning at USG Planning at USG

Worldwide Ceilings

� Strong market position

� Full product line

� Focused on innovative solutions

© Copyright 2008 USG

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Page 7: Advanced Supply Chain Planning at USG Planning at USG

Building the Case for ERP

Page 8: Advanced Supply Chain Planning at USG Planning at USG

Origins of Supply Chain Management at USG

� Plant operations historically managed on a local / regional basis

� Introduction of new high-speed plants starting in 1999-2000 made cross-region shipments cost effective

� Supply Chain Management

© Copyright 2008 USG

� Supply Chain Management organization established in 2000 to coordinate plant operations and distribution across the network

� Established S&OP and forecasting processes

Rainier, OR

Bridgeport, AL

Aliquippa, PA

East Chicago, IN

Plaster City, CA

Plasterco, VA

Oakfield, NYGypsum, OH

Fort Dodge, IA

Monterrey, MX

Fremont, CA

Rainier, OR

Bridgeport, AL

Aliquippa, PA

East Chicago, IN

Plaster City, CA

Plasterco, VA

Oakfield, NYGypsum, OH

Fort Dodge, IA

Monterrey, MX

Fremont, CA

1999 - 20011999 - 2001

New facility opened

Old facility closed

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Page 9: Advanced Supply Chain Planning at USG Planning at USG

Supply Chain Complexity

Complexity increases as the supply chain model begins to reflect our real business—introducing real-world constraints

• Not all plants make or stock all products

• Some plants warehouse products made at other plants

• Plants ship across Sales Areas

• Some plants can ship into other plants’ markets

© Copyright 2008 USG

• Some plants can ship into other plants’ markets

• Some plants can service markets more cost-effectively than other plants

CSC

Sales

Sales

Sales

Plant

Sales

Sales

Sales

Plant

Increasing complexity leads to more risk and greater potential for service disruptions, higher costs

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Page 10: Advanced Supply Chain Planning at USG Planning at USG

Supply Chain Opportunities

Improve quality and consistency of plant-level forecasting activities.

Connect production scheduling processes to overall supply chain planning.

Establish consistent business rules and performance

© Copyright 2008 USG

Establish consistent business rules and performance measurements.

Reduce manual effort and errors caused by multiple IT systems.

Answer key customer question: “When will my truck arrive?”

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Page 11: Advanced Supply Chain Planning at USG Planning at USG

Expected Benefits

Build a competitive advantage by becoming the easiest company to

do business with

Drive a fundamental shift to network-focused

processes, business rules, and information

management

© Copyright 2008 USG

Connect disparate processes to create an

overall process that fully drives supply chain

operations

Provide the systems capabilities required to

link supply chain planning to production

planning and scheduling

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Page 12: Advanced Supply Chain Planning at USG Planning at USG

ERP Implementation

Page 13: Advanced Supply Chain Planning at USG Planning at USG

Oracle ERP Implementation

Implemented advanced planning in parallel with plant ERP

� Oracle Demand Planning (ODP)

� Oracle Advanced Supply Chain Planning (ASCP)

� Other modules included: Cost, Manufacturing, Inventory, MSCA, Shipping, and Financials

© Copyright 2008 USG

•2 Locations •5 Locations •6 Locations •10 Locations •13 Locations •10 Locations•12 Locations •8 Locations

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Page 14: Advanced Supply Chain Planning at USG Planning at USG

Plan Validation Process

� Goal: Validate the Manufacturing Plan for each plant before Go-Live

� Plant, Logistics, and SCM site teams work together to transition plants to the new LinX Manufacturing Planning process

� Identify and resolve data issues that would impact the ability to manage the plant using the new planning and scheduling processes

� Bring the plants up and running on the Manufacturing Plan

© Copyright 2008 USG

� Help the plant transition to running and trusting the new LinX planning philosophies and methodologies

� Establish a strong working relationship between the plants and Logistics that will continue after SCM teams move on

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Page 15: Advanced Supply Chain Planning at USG Planning at USG

Key Enablers

Highly-skilled plant rollout and training teams

Positive relationships with strategic partners

© Copyright 2008 USG

Clear, well-communicated vision

Strong PMO and QA entities

Team rewards and after-work socializing

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Page 16: Advanced Supply Chain Planning at USG Planning at USG

Benefits and Lessons Learned

Page 17: Advanced Supply Chain Planning at USG Planning at USG

Improved Information B

efo

reLimited visibility into the supplies and demands of other plants

Planning only manageable at the product category or family level

After Global plans show

dependent demand from other plants

ASCP and ODP handle millions of data points for detailed planning

© Copyright 2008 USG

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Befo

re

family level

Rough conversions from finished good forecasts to raw material requirements

Minimum quantities or fixed lot sizes known anecdotally by planners

detailed planning

Bills of Material exploded to the lowest level and summarized by material

All item data stored in central database and used in planning production

Page 18: Advanced Supply Chain Planning at USG Planning at USG

Benefits

� Cost savings

� Finished goods and raw material inventory reduction

� Execution of strategic optimization

� Fewer cross-region shipments

© Copyright 2008 USG

� Improved customer service

� Increased first-call resolution

� More accurate order promise dates

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Page 19: Advanced Supply Chain Planning at USG Planning at USG

Lessons Learned

• Pre-deployment visits

• Communication of overall vision

Change management must be a constant focus

• Optimization rules

• Limited data collection

Examine trade-offs between features and performance

© Copyright 2008 USG

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• Limited data collection

• Forecast consumption settings

• Planning Time Fence control

Large volume of configuration options allow for continuous improvement

• Custom data validation

• Copy restoration

Data integrity is critical to successful plan run

Page 20: Advanced Supply Chain Planning at USG Planning at USG

Questions?