Building a Fast and Flexible Consumer-Driven Supply Chain, Stanley Black & Decker
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Transcript of Building a Fast and Flexible Consumer-Driven Supply Chain, Stanley Black & Decker
Building a Fast and Flexible Consumer-Driven Supply Chain
Wilfred Eijpen – Director, Supply Chain
Johanne Tsui – Manager, Supply Planning
Company Overview
Strategic Roadmap
Consumer Driven Supply Chain – Benefits
Sales & Operations Planning (S&OP)
Production & Sales Inventory (PSI)
Sales & Demand Management (SDM)
Next Steps
Agenda
Division of Stanley Black & Decker formed in 1989
– Acquired Kwikset 1989
– Acquired Price Pfister 1989
– Acquired Weiser Lock 2003
– Acquired Baldwin 2003
– Merged with Stanley National Hardware 2010
HQ in Lake Forest, CA in 2001
Sales over $1B annually
Company Overview
Grow through Innovation
Denison, TX
Reading, PA
Charlotte, NC
Mira Loma, CA
Mexicali, MX
Nogales, MX
Lake Forest, CA
Burnaby, CN
Brockville, CN
Xiamen, China
Corporate headquarters
Manufacturing & Assembly
Distribution
Global Sales Force
Our Operations
Our Operations
Key Challenges:
• Lengthening supply chain
• Multi-site dependencies
• Cross Functional Communication
• Promotional Activities
• Commercial Alignment
Fast & Flexible Consumer Driven
Supply Chain
Our Objective
Our Strategic Roadmap
People
Process
Systems
2007
Revised 9/25/08
2008 2009 2010
Customer Service Integration
Channel Focused Teams
Establish CPFR presence
Supply Planning Collaboration Teams
CPFR with Retail Customers
SDM for Non-Retail
S&OP Revamp
Demand Planning for all accounts
Master Planning for Major Manufacturing Plants
Fulfillment for Supply Planning
S&OP Reporting
Production Sales & Inventory Planning
Customer Order Prioritization
Constrain demand at multiple levels in the Supply Chain
Full visibility throughout the Supply Chain (Order to Production)
Connectivity of Supply Chain Systems
Manage by Exception
Improved Productivity
Reduction in workload
Our Soft Benefits
Over x% Service Improvement to our Customers
11.42% reduction in components and finished goods inventory
19 ppt forecast accuracy for Canada & Weiser
10.4% improvement in forecast accuracy for US market
Over 60% reduction in planning cycle times
Over 80% reduction in financial estimate planning times
Our Hard Benefits
Fast & Flexible Consumer Driven
Supply Chain
Strategic
Tactical
Operational
Sales & Operations
Planning
Production Sales &
Inventory
Supply Demand
Management
Our Processes
UNAWARE
• Management review of
the past – retrospective
• Siloed meetings – data
handoffs – limited/no
integrated planning
• Mid-level management
involvement
• Balance-of-year view
AWARE
• Follows basic structure
of the S&OP process
• Medium forecast view –
12-18 months
• Supply and demand
balancing with
alternative generation
• Senior management
involvement
• Storming and “norm”ing
FUNCTIONAL
• Valuation of gaps and
alternatives – scenario
presentation
• Emergence of balanced
scorecard
• Issue-tracking and
elevation expectation
• Decisions and directions
are built into the cycle
• 18-24 month planning
horizon
• Team development
• Metrics evolve with goals
SKILLED
• Plans drive budgets
• Strong integration
of strategy with tactical
planning – guidepost
setting
• Broad project
management and
strategic tracking
• Optimization
is the message
• Exceptions are refined
• Reporting shows
granular progress to
corporate goals
• Executive ownership
TIME
Process Maturity Template
PR
OC
ESS
MAT
UR
ITY
S&OP Process Maturity Scale
– Portfolio Review
– Demand Review
– Supply Review
– Pre-S&OP Review
– Executive Review
– Continual Measurement
Our S&OP Model
Definition
• Balance Forecast versus Inventory
• Inventory versus Production
• Unconstrained versus Constrained Demand
Primary Goals
1. 98% + fill rates
2. Achieve Inventory Targets
3. Minimize Plant Variances
Gap Closure
• Service Risk Mitigation
• Customer Collaboration
Our PSI Process (Supply Review)
PSI
Customer Orders
Forecast
Safety Stock
NPI/Promos
Firm Production
Actual Production
Inventory On-Hand Leveled
Production
Resource Reqmts
Materials Reqmts
Background Reqmts
Inventory Estimate
PSI Inputs & Outputs
U
N
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O
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S
T
R
A
I
N
E
D
C
O
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S
T
R
A
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N
E
D
Consumer Driven Supply Chain
Handshake Meetings
Constrained Demand Review
Unconstrained Demand Review
PSI Process Overview
PSI Challenges & Improvements
• Special Event Management
• Weekly Tracking – Demand & PSI Trends
• Summarize by PSI CategoriesCommunication
• Service
• Working Capital
• Production SmoothingTeam Alignment
• Standardize Process
• Running Rules
• Frequent Updates
Exception Management
Supply Demand Management (SDM)
7 day LT
commitment
High Sku
Count
Long LT on
Asia
Products
Customer
Complaints
on Long LT
Long LT on
Asia
Components
No Stocking
Strategy
The Challenge: Provide high service, in short lead times, to a fragmented,
high mix market
SDM
Weekly Adjustments
7 Day Lead Time
254 SKUs
CoreSystem Generated
7 Day Lead Time
1,738 SKUs
Tier 1 No Forecast
Strategy
28 Day Lead Time
676 SKUs
Tier 2
How? Collaborated w/ Sales & Marketing – Segment Product Offering Developed Exception Management Tools – Weekly Forecast & SS Tackled Past Due Backlog – Order by Order, SKU by SKU
Frequent review & measure Smaller changes
Use visual tools
Highlight big deviations fast
Highlight trends over time
Review category assignment over time
New SKUs start in Tier 1 and earn Core status over time
SDM Principles
Track & Measure
Core Availability Report SKU Health Report
Next Steps
S&OP Revamp for Entire Business
Dedicated Product Life Cycle Management Resource
Weekly Forecasting
Weekly PSI report
Inventory Balancing (Raw/WIP versus FG)
Billing Debrief Meeting
Standardize Reporting
Thank you!
Questions?