supply chain conference 2016€¦ · •2015 mc retails: 264,627 •us market share: 50.2% (on-road...
TRANSCRIPT
Supply Chain Conference 2016
1
Aspiring for Operational Excellence
Simon Jolliffe, Inventory Manager, H-D EMEA
Content
• About H-DMC
• Business Scenario
• Target SCM Solution
• Initiative Objectives & Deliverables
• Results
• Highlights
• Unexpected Outcomes
H-DMC
• Founded: 1903
• HQ: Milwaukee, Wisconsin
• 2015 Revenue: $5.3 B• Motorcycles $4,127 M
• Parts & Accessories (PAC) $863 M
• General Merchandise (GM) $292 M
• Employees: 5,700 approx.
• Dealer Network: 1435
• 2015 MC Retails: 264,627
• US Market Share: 50.2% (on-road 601+cc models)
Possible Opening Video
Touring by Harley-Davidson Touring by Harley-Davidson – YouTube to open up with “About H-D”
H-D EMEA
• HQ: Oxford, UK (2003)
• Subsidiaries: France, GmbH, BeNeLux, Italy, Switzerland & Spain
• Sales Offices: Czech Republic, Russia, UAE, Greece and South Africa
• Employees: 250 approx.
• Dealer Network: 378
• 2015 MC Retails: 43,287• Europe 36,894
• Others 6,393
• Europe Market Share: 10.5% data provided by ACEM, an independent agency.
• ERP: SAP since Jul-2009
• Distribution: Houthalen, Belgium
• 3PL Services: Neovia Logistics
EMEA Operations
• PAC & GM Supply Headcount = 3
• Appointed April-2013
• 98% PAC SKUs procured from H-DMC
• 50% of GM revenue is One-Time-Buy (cut to order biannually)
• ~42K active SKUs across PAC & GM Core
Operations Dir.EMEA
SAP SME (OTC)
S&OP Mgr.MC
S-CAPAC
Senior S-CAGM
S&OP LeadPAC
S&OP LeadGM
Senior S&OP Analyst
Reporting Analyst
S&OP Analyst
Administrator
Marketing Mgr.
Simon Jolliffe Inventory Mgr.
Logistics Mgr.SAP SME (OTC)
PAC & GM
Business Scenario
• Technical resources and funding focused on global rollout of SAP
• Rudimentary stock replenishment solution
• Fundamental flaws and capability gaps• Average sales data
• No seasonality
• Service levels fluctuated
• International impacting domestic business
• Independently surveyed the market for possible solution providers
• Completed feasibility study of solution locally
• Pilot pending US approval
Target Solution
• A demand-driven, inventory optimisation and supply chain management solution:• Improve forecast accuracy at SKU level
• “Reduces” inventory while maintaining service levels >99%
• Modules include:• Statistical Demand Forecasting
• Fulfilment
• Replenishment
• Functionality • Plan promotions and/or step changes in demand
• Manage exceptions
• Simulate ‘what-if’ scenarios
Objectives & Deliverables
• Improve service levels and optimise Inventory
• Hosted solution without interfaces from SAP• Cost Effective
• Low technical risk
• Defined KPIs by category• Stock Value
• Fill Rate(s)
• Backorders as % of Revenue
• *SKU Count
• Define future business’ needs
• Aggressive implementation
• Key stakeholder engagement
• Global v Local without exception
July Aug Sept Oct Nov-Mar
Define/Analyze
- Establish SA w/ToolsgGroup x
- Architecture analysis x
- Design solution x
- Build Solution x x
- Run proof-of-concept x
Recommend
- Measure results x
- Decision point on scalability x
ME80FN
MARM
MVKE
MARC
MARA
Supersessions
Demand
Outstanding Orders
On Orders
Current Stock
Item Warehouse
Item Master
MBEW
VAO5*1Demand.txt
ZHDI_CUSTOM_MARC
Monthly Load FilesWeekly Load Files
Ad hoc / screen based load
BoMCustom
AttributesMicro Areas
SupplierEINA4KNVVKNA1
ZIM04
VAO5*2OpenSales.txt
H-D EMEA File Flow Design
Development of Strategy
• Reduced stocking criteria from 8 to 4 demand hits P/A
• Revised weighed purchasing logic:
• Now stocking to service level targets by category• Initially constrained optimisation
• ABC classifications extended to D&E during Pilot• Annual reduction of 93,785 deliveries on stocked items = $750k est. savings
Critical ConsumablesTarget = 99%
Spark Plugs
Brake Pad Kits
Air Cleaner Filters
Batteries
Oil Filters
Oil & Fluids
Tires
Pilot Results
• Data cleansing alone improved integrity of SAP
• High / growing line fill rates across all portfolios• Ttl Parts = 90.9%, SKU Parts = 94.3%, Crit.Cons. = 99.6%
• Ttl Accs = 94.2%, SKU Accs = 94.6%, Key Accs = 98.5%
• High Order Proposal PlacementOf 2,214 only 10 investigated and all subsequently placed!
• Inventory modelling looked great• High inventory value but healthy
• Days of Supply was stable
• Polar Vortex
• Lowest backorders for 5 yearsrealising 5% more revenue per month than prior year
• Facilitated sales growth
Additional Highlights
• True scalability of designed solution
• Efficient operation allowing time to explore CI opportunities• Vendor Managed Inventory initiative
• Expand direct procurement portfolio
• New supplier on-boarding process
• Developing resources
• Improved engagement and boosted team moral
• Manual biannual re-stratification > automated weekly
• Expect inventory to increase initially
• Ability to proactively reduce or avoid backorders
• Assumes a perfect Supply-Chain
Unexpected Outcomes
• Reverting to SAP standard functionality
• Influence across S&OP process• Global Inventory Management Team
• Centralised KPI reporting
• Making data driven decisions• Cross functional user forum
• Greater global awareness and role appreciation
Knowledge
Specification
Source the
market
Appraise suppliers
RFQ / Tender
Analyse & short-
list
Negotiate
Award contract
Contract Manage
ment
Select & Requisition
Authorise
Order
Receive
Payment
Socialising the Purchasing Cycle
GTM / CHANNEL
SOURCING
PROCUREMENT(Purchase to Pay)
5 Rights of Procurement1. Quantity2. Place3. Time4. Quality5. Price
Value-Add Contribution:• Support Contract Management
SLA & KPI Measurement• Develop Supplier Relations
Early Buyer Involvement (EBI)• Product & Relationship Lifecycle Management Facilitation
Possible Closing Video
Meet our Custom Kings - Harley-Davidson Prestige Motorcycles - YouTubeto close session on.
THANK YOU