Profitably Addressing Complexity in ManufacturingJDA Manufacturing Planning
Increasing Complexity Proves Problematic for ManufacturersChallenges and Opportunities
Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
New Levels of Complexity Further Threaten Profit / Satisfaction
Customer Empowerment
Globalization
External FactorsExpanding Network
• Choice / Option• Expectation• Service Level• Now
• Shift from Regional• Disparate Views• Varying Local
Parameters• Emerging Markets
• Outsourcing• External Partners• Shifting Reliance
• Geopolitical / Natural Disaster
• Economic Uncertainty
• Cost Volatility
Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
Product Proliferation:Consumers Drive Choice
100%Number of derivatives of a new car
model has increased
20%Source: McKinsey
Average product cycle for a new model has fallen
From 2002 to 2011
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Manufacturers Turn to Choice:SKU Counts are Increasing
Number of SKUs in Grocery grew
50%between 2003 and
2010.
Source: Food Marketing Institute
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Shifts in Supply and Delivery Factors
Skilled Labor Shortage40 million by 2020
Source: McKinsey
Commodity Price IncreasesRaw Materials by 50%
Source: McKinsey
Transportation & Energy Costs“Changing the Math”
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Going Global:Accelerating Quickly
Global trade has accelerated twice as fast as US GDP for the past 20 years
Source: McKinsey
2/3 of surveyed high tech companies have presence in emerging markets.
Source: IDC
Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
Symptoms of Failing to Manage Complexity
“I’m not meeting service levels targets, and I don’t see how they can improve.”
“Our plans are so inflexible that it’s always a major disruption and margin hit to take
advantage of a new opportunity or react to problems.”
“My operating and expediting costs are increasing, and it’s not as simple as passing the cost on to customers.”
“Achieving my production goal isn’t helping me achieve my sales goal.”
“My inventory is growing.”“My topline revenue isn’t growing.”
“I’m drowning in spreadsheets.” “My stakeholders are demanding more.”“I think these are my problems, but I’m not
sure.”
“I’m not meeting service levels targets, and I don’t see how they can improve.”
“Our plans are so inflexible that it’s always a major disruption and margin hit to take
advantage of a new opportunity or react to problems.”
“My operating and expediting costs are increasing, and it’s not as simple as passing the cost on to customers.”
“Achieving my production goal isn’t helping me achieve my sales goal.”
“My inventory is growing.”“My topline revenue isn’t growing.”
“I’m drowning in spreadsheets.” “My stakeholders are demanding more.”“I think these are my problems, but I’m not
sure.”
Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
Symptoms of Failing to Manage Complexity
Results of Failing to Manage Complexity
Customer dissatisfactionMissed opportunities
Competing goals / incentivesStagnant growth / margin decline
Excess inventory and carrying costsMisallocated resources and assetsProductivity drain / data challengesUnhappy stockholders / leadership Compromised enterprise visibilityCompromised decision-making
Compromised timelinesCompromised accuracy
Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
Manufacturing Must Shift
Inward-Focused
One-Size-Fits-All Structure
Lacked Flexibility
Misaligned Functions
Locally Optimized
Customer-Centric
Segmented to Serve Different Markets
Business Agility
Internal and ExternalSynchronization
Globally Optimized for Performance
Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
JDA Manufacturing Planning Suite
Profitably Addressing Complexity
EXECUTION
Inventory Planning
Factory Planning
Master Planning
Demand Planning
JDAManufacturing
Planning
Sales & Operations Planning
STRATEGY
Process & PeopleStrategy and ProcessOrganizational DesignChange Leadership
Continuous Improvement
Access & DeliveryJDA Cloud
Business AgilitySustainable ROI
Upgrade & Optimization
Orchestratingmanufacturing and distribution operations …
by aligning universal and segmented demand …
with resources, materials, and
assets …
to optimize buy-make-move-store-deliver decisions …
across the enterprise.
Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
Problem Solved:Customer-Centric Supply Chain
Scrambling to Adapt to Forecast MisfiresLow Ability to Detect Market Changes
Lack of Forecasting DepthCompromised Service Levels
BEFORE JDAManufacturing Planning
Earlier Identification of Market ChangesImproved Forecast Accuracy
Ability to Plan at Lower LevelsBetter Service Level
AFTER JDA Manufacturing Planning
Underperforming Forecasts | Low Loyalty Improved Customer Understanding | Higher Loyalty
Increased customer service rating to 99.5% while reducing inventory 17%
Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
Problem Solved:Segmented Supply Chain
One-Size-Fits-All Approach to CustomersLack of Ability to Align Business Goals
Compromised ProfitabilityBoilerplate Offerings
BEFORE JDAManufacturing Planning
Differentiated Service by CustomerImproved Business Goal Alignment
Improved Order PrioritizationSegmented Demand View
Improved Profitability
AFTER JDA Manufacturing Planning
Standard Offerings | One-Size-Fits-All Customer View Customized Approaches | Improved Profitability
Grew stronger connections to customers, reduced cost / complexity, improved internal collaboration and forecasting..
Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
Problem Solved:Profitable & Agile Supply Chain
Limited View into Global EnterpriseSluggish Planning Integration
Long Response CyclesInflexible Processes
BEFORE JDAManufacturing Planning
Comprehensive Enterprise InformationAbility to Reconfigure Supply Chain
Agility and Quick ResponsesSupply / Demand Cohesion
Improved Profitability
AFTER JDA Manufacturing Planning
Siloed Functions | Sluggish Turnarounds Improved Responsiveness | New Opportunities
Doubled inventory turns; Enabled rapid response to dynamic market conditions
Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
Problem Solved:Synchronized Supply Chain
Alignment of Supply, Demand, Finance, Etc.Greater Flexibility and Response TimeImproved Asset/Resource UtilizationScenario-Based Decision Support
Improved Agility
AFTER JDAManufacturing Planning
Failure to Bridge Strategy and ExecutionInaccurate Order Promising
Compromised Service LevelsLack of Decision Support
Waste of Assets
BEFORE JDA Manufacturing Planning
Guesswork | Failure to Adapt and Execute Supply Chain Responsiveness | Profitability
Centralized planning into one process; Cut forecast lead time from 4 weeks to 2 weeks, reducing planning effort by 30%, errors by 90%
Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
Problem Solved:Optimized Supply Chain
Improved Utilization of Assets, Inventory, etc.Improved ROI / Time-to-Value
Reduced Excess InventoryImproved Service Levels
AFTER JDAManufacturing Planning
Hidden Opportunities for ImprovementCompromised Service Levels
Expensive MiscalculationsFlat Metrics
BEFORE JDAManufacturing Planning
Missed Opportunity for Higher Investment Return Maximized Margin | Improved Customer Satisfaction
Decreased inventory by 50%Increased on-time deliveries 90%
Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
JDA Manufacturing Planning: End-to-End
“JDA has enabled us to actually take market share by being able to
deliver product on time.”
Fujitsu Network Communications
ONLY
High Value Functionality • High Adoption • Greater Productivity
Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
20-25% Forecast Accuracy55-94% Order Promising Accuracy
5-8% Inventory Turns11% Production Line Efficiency
.5-5% Service Level Improvement42% Planning Effort Reduction 4-15% Safety Stock Reduction
4-8% Overall Inventory Reduction5-12% Lost Sales Reduction
JDA Manufacturing Planning:Agile, Aligned, Optimized
Optimizing Opportunities for Growth
Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL
Putting an End to anImpossible Choice
PROFIT SATISFACTION
• Tighter integration of strategy to plan to execution• Improved alignment of investments with returns• Increased efficiencies and cost savings• Decisions supported with dynamic scenarios• Decreased inventory
• Tighter integration of strategy to plan to execution• Improved alignment of investments with returns• Increased efficiencies and cost savings• Decisions supported with dynamic scenarios• Decreased inventory
• Improved OTIF• Greater agility in responding to changes• Priorities based on segmentation• Global and expanded network resources
available to meet customer expectations
• Improved OTIF• Greater agility in responding to changes• Priorities based on segmentation• Global and expanded network resources
available to meet customer expectations
ONLY
+
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Guiding the Industry’s Leading Supply Chains
500+38+
Manufacturers
Countries
Image courtesy: alpha
20 of Gartner Top 25 Supply Chains
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Optimizing Manufacturing Across the Enterprise
Demand Planning
Sales & Operations Planning
Master Planning
Factory Planning
Inventory Planning
ONLY
Profitability • Customer Satisfaction • Alignment • Agility
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http://www.jda.com/solutions/manufacturing-planning/
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