value nets

The ART of Purchasing & Supply Chain

Value Nets© : a unique learning experience in Supply Chain


Value Nets helps to experience in a nutshellValue Networks issues and opportunities

Consumers

SuppliersManufacturers

Customers

DistributorsSuppliers

Tier 2 Suppliers

Tier 2 Suppliers

3PL

Customers

Customers

Contract Manufacturers


Supply Chain is not a science, it is a difficult art

1. It is complex, dry, highly evolving, and dependent on expensive systems and processes. But it only meets its full promises, when there is a deep cultural change in the whole company.

2. It is perceived as an executing function, and gets a hearing when its execution is irreproachable, but its full potential is achieved at the strategic level, which demands the commitment from Marketing & Sales.

3. Half of the Supply Chain projects fail, for not taking into account sufficiently, points 1 & 2.

4. Recent research on learning processes (Damasio, Goleman, Kolb,…) shows that a true “buy in” of a complex message, needs emotion and experience. Vis-à-vis these two requirements, games and simulations within a few hours, are the closest exercises to “real life”, without having the cost of its failures.

5. The Beer Game, born in the 60’s, so far the reference in Supply Chain games, is not anymore adapted to today’s and tomorrow’s issues, which are about mastering navigation on Value Networks. Value Nets© ambition is to bridge this gap.

You cannot control a complex system, you can only disturb it.Richard Pascale in « Surfing the Edge of Chaos »


Clients comments

• « It is the first game I see, which shows so clearly, how Supply Chain can create value »FMCG Russia training director

• « Thanks to Value Nets, I understand at last, what Lean is all about »FMCG Africa & Middle East supply chain director

• « Value Nets has help me to reinforce the cohesion within my team »ICI Paints France supply chain director

• « We won, because we were fully complementary with my collegue from finance, and worked in harmony during the game.

Campbell Europe supply chain director

• « An excellent game to demonstrate the importance of communication and transparency in supply chain »

FMCG Argentina general manager

• « The game gives a quite complete overview of the key operational strategies, and shows well the importance of consistency when executing a strategy“

FMCG China general manager

• “It helped me to understand the importance of all the elements of the supply chain”President of FMCG Europe & North America


Value Nets business benefits

• An effective pedagogical tool : Value Nets allows to have a powerful insight of the drivers and the dynamics of a Value Network, to acquire of global business vision of the different supply chain approaches, and to seize the interconnections between strategy, tactic and execution.

• A collaboration vector : Value Nets allows to understand the roles and responsibilities of the different actors, to recognize the benefits of cooperation between the various players, and brings to the fore the importance of communication between the different protagonists.

• A teambuilding experience : Value Nets is a smart, unforgettable and relevant teamwork exercise, which reveals talents and uncover hidden characters.


Value Nets game advantages

• Universal : relevant to all functions (experts or not) and all management levels (from junior level to general managers and executive committees)

• Stimulating : provide a competitive and positive atmosphere, favorable to pass messages or encourage creativity.

• Transparent and user-friendly : no “black box”; a board game supported by a comprehensible computer based model.

• Relevant : a perfect, yet subtle balance of the supply chain performance drivers.

• Open : no silver bullet, same players can shoot again !

• Evolving : from 8 to 24 players, and their multiples. Can be customized to different industries specificities.

• Quick and easy to plug in : 4h, ideal to introduce a seminar, wrap up a session, or conclude an event in a fun way.


Value Nets in practice

• 4, 5 or 6 companies competein a value network.

• Their objective is to maximisecash, by optimizing and managingtheir supply network.

• To achieve this goal, the teamsmust define strategies and theirrelated projects, negotiate between themselves, and the operations at the execution level, under a strong time pressure.

• The players physically move the materials to reinforce the « human » aspect of the game, but all the calculations are computer based to focus players on the game itself, and not on the administrative tasks.

ProductionProduction

Commercial

Wholesale

Production

Commercial

Wholesale

Retail

Commercial

Proximity

Retail


To win Value Nets, you need a strategy,the right tactics and perfect execution

Strategy

Tactics

Execution

-100

-50

0

50

100

150

200


Sharks & Partners

Period n°

Organic Black White Amber

3

ORDER VOUCHER

Execution : An Example during 1 period

•Example of black stones•Same logic for white stones •Stones move 1 square per period• Square jump = 100 € penalty

Flow of Goods


Product Leadership(Compete on Speed)

Customer Intimacy(Compete on Scope)

Cost Leadership(Compete on Scale)

Operational Excellence(Compete on Execution)

4 possible Operational Strategies to Win

Project


Concrete Experience

Abstract Conceptualization

Reflective

ObservationActive

Experimentation

David Kolb : Experiental Learning (1984)

Examples of experiential learnings in Value Nets

Time

DemonstratedCapacity

Ability/CostTo Flex

Vol

ume

–U

nits

/Tim

e/C

ost


End Game (1/4) If onlyI had made the

End Game…


End game is about long term anticipation…

2nd Plant realization18 Months

Q1 Q2 Q3 Q4

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

- 2005 - - 2006 - - 2007 - - 2008 - - 2009 - - 2010 -

Site 2

Outsourcing

Longchamps

Tons

Once you find you are short, you are in for 12

months of sh…


S&OP (2/4) Finance & Supply ChainMust work like Brothers

On S&OP


A joint work between Supply Chain and Finance, allows to clarify the Gap analysis in S&OP meeting

FORECAST

OBJECTIVE

GAP

What are the options to close the gap ??

FINANCIALPLANNING FOR CODI

FINANCIALVIEW &

SCENARIOS

Hit theTarget

YEAR-END0

Left to Right Thinking

Avoid toLooseSales

ForecastAccuracyPlants

control

PRE S&OP

MEETING

PRE-S&OPMEETING

S&OPMeeting

DEMANDPLANNING

SUPPLYPLANNING

PRE S&OP

MEETING

PRE-S&OPMEETING

MANAGINGDEMAND

MANAGINGSUPPLY

VOLUME

MANAGINGNEW

ACTIVITIES

It’s b

ette

r to b

e rou

ghly

right

rath

er th

an pr

ecise

ly wro

ng


Manufacturing (4/4) You must have forwardVisibility ofthe Demand

To Pacifymy Factory


OPC and S&OP should evolve towards a tool of“pacification of operations”

Make Manufacturing a competitive advantage

100

90

80

70

60

50

40

30

20

10

0

COMPARACIÓN VOL. ERCA « A » DANONINO

Sales week 1 week 5 week 10 week 15 week 20

SalesProduction

Flexibility = Nervosity

value nets

Documents

supply chain games

supply chain projects

value nets ambition

excellent game

beer game

importance of communication

teambuilding experience

importance of consistency