Improving IBM’s Optimal Inventory / Hub / Safety Stock / Forecast … · 2013-05-24 ·...

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© 2005 IBM Corporation

Improving IBM’s Optimal Inventory / Hub / Safety Stock / Forecast Process

04/24/13


© 2011 IBM Corporation2 04/24/13

• Suppliers will receive an invitation letter on 4/25 to attend 1 of 3 meetings to be held on 5/2. This invitation letter is being sent via the Supplier Collaboration Tool (SCT). SCT will track supplier responses. • Suppliers will be asked to acknowledge the invitation , their attendance , and understanding of the material . SCT will send a reminder letter on 4/30 if IBM has not received an acknowledgment of the invitation.

• SCT will send reminder notifications to anyone that has not completed the survey by 5/8, The survey asks for confirmation of attending the education session or watching the pre-recorded video and if there is a good understanding of the material covered.

• SCT will send a confirmation note prior to the 5.1 forecast send on 5/23, confirming readiness of the process change.

• Suppliers are asked to contact their IBM OCM/GCM or one of the following Brand reps should they need further clarity.

Jim Blackorby - Procurement Brand Manager [email protected] Geary - Power and Mainframe [email protected] Lee Purser - System-x [email protected] Brooke Bauer - Storage [email protected]

Supplier notification and acknowledgment of Education



Agenda

Inventory Optimization focused on Hub DOS and Quantity targets

Rollout Plan and Next Steps

Mechanics of pulling data from Collaboration tools– SCPM - IBM – VMI – Foxconn External Fulfillment for System-x– Spreadsheet - Kingston External Fulfillment for System-x



Supply Chain Transformation CLIENT SATISFACTIONService Level Performance

starting point

objective

We are making progress;Still have a long way to go –

~50% improvement

Today

Our vision is to delight our clients every day by creating the most transparent global supply chain in the world - one that delivers real-time information to all its partners globally, enabling actionable alerts on all critical parameters to ensure a resilient self healing supply chain.

Forecast AccuracyClear-to-Build Visibility

Internal cycle timeDemand ConditioningABCD Segmentation

Inventory Optimization

TRANSPARENTSUPPLYCHAIN

Collaborate continuously and in

real time across business units, with

suppliers and partners

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IBM StakeholdersStakeholder Area Stakeholder

RepresentativeRon Clarke, VP Global Procurement Jim Blackorby

Duane Ruff

Dan Carrell, VP

Howard Katowitz, Director

Joel Owens

Ken Fischler

Fiona Livingstone

Global Mtls & Supply Assurance

Global Supply Assurance & Ops

Main Frame & Power

Storage

X Series

Darla Geary / IBM OCM

Hugo Sierra / IBM OCM

Lee Purser / IBM OCM



IBM Inventory Optimization: Hub Optimal DOS and QTY Overview

IBM is deploying an analytical tool called ILOG/IPFA which will provide a more clear communication of our demand statement and allow improved responsiveness to changes in our demand.

This is an important change to our forecast process and we want to ensure it is successful. The initial forecast for the 5.1 cycle on May 23rd, will use the current DOS targets set by each brand. IBM will be transitioning to using the ILOG/IPFA recommendations throughout 2013. Any significant changes in DOS targets will be communicated to you through your IBM OCM/GCM.

IBM will analyze the target DOS each month to assure that it is appropriate to cover the expected demand deviation.

DOS targets will vary by part number based on ILOG analytics/recommendations. IBM does not expected the DOS targets to change very often for a particular part, however target safety stock quantities associated with the DOS target will vary cycle to cycle based on demand. This safety stock quantity will be visible in the collaboration tool(s) (SCPM/VMI) and added to the first week of the supplier forecast.

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IBM is expecting suppliers to execute to the forecast and maintain this target safety stock quantity in the hub at all times. IBM is using a hub health report to monitor hub levels against the target safety stock quantity to ensure supplier serviceability metrics are achieved.

There is no longer any need for suppliers to pull-ahead or uplift forecast to cover Hub/ Safety Stock requirements. Suppliers will still need to maintain the normal MRP offsets for shipping the material to the hub and for getting the components through their own factories.

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Inventory Optimization: Hub Optimal DOS and Qty Overview – Continued



SCPM Supplier View after Profile update:

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Note: Video on how to update SCPM user profile is available in web link provided in supplier invitation letter along with detail steps starting on page 13.



Foxconn – EF VMI Supplier Collaboration New View



Kingston Change to Supplier Forecast

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Type ForecastPartner XYZKingston ICDates Sup Hub Tgt Sup Hub DOS 11-Feb-13 18-Feb-13 25-Feb-13 4-Mar-13 11-Mar-13 18-Mar-13 25-Mar-13 1-Apr-13 8-Apr-13Demand 43XyZ12 0 0 0 0 0 0 0 0 0 0 0Commit 43XyZ12Demand 43XyZ13 0 0 99 0 0 0 0 0 0 0 0Commit 43XyZ13Demand 43XyZ14 75 10 20 54 28 73 73 42 21 56 56Commit 43XyZ14Demand 43XyZ15 500 10 460 189 96 174 174 100 50 174 174Commit 43XyZ15Demand 43XyZ16 300 10 894 719 364 0 0 0 0 0 0Commit 43XyZ16Demand 43XyZ17 350 10 324 104 53 138 138 79 40 93 93Commit 43XyZ17

New Columns



Supply Chain Transparency: ilog Implementation

SAFETY STOCK QUANTITY CLEARLY IDENTIFIED

CONSISTENT PROCESS AND CALENDAR,

CROSS-BRAND, CROSS-LOCATION

CLEAR AND OPEN COMMUNICATION

There is no longer any need for suppliers to pull-ahead or uplift forecast to cover Hub/ Safety Stock requirements. Suppliers will still need to maintain the normal MRP offsets for shipping the material to the hub and for getting the components through their own factories.

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Rollout Plan and Next Steps May - 2013

– Complete Supplier education by 5/2– Safety Stock visible in Supplier Collaboration Tools

• SCPM (5.1 Cycle) on May 23rd• Foxconn VMI and Kingston – May 24th • All Brands/ IBM Locations/ External Fulfillment Suppliers make Change at the Same

Time (Excluding System-x products built in Brazil and the Storage Products built in Singapore)

Next Steps• Need confirmation of your attendance and understanding of the process

change. • IBM Supplier Communication Tool (SCT) Survey . Links to this were provided to you

in the email invitation. • IBM will send a confirmation note prior to the 5.1 forecast send on 5/23 confirming

readiness of the process change



Process Steps to update Profile in SCPM



Supplier education for SCPM changes for Hub Optimal Dos/Qty

Instructions on how to display and export Hub Optimal Dos and Quantity

How to incorporate into the current IBM Macro for forecast download



How to view Hub Optimal DOS and Quantity1. Go to the collaboration view:



Configure:

1) To view these values in the Multi Collaboration view:Select Configure.

2) These values are being set by Hub Optimal QtyHub Optimal DOS

Select these columns and move to the Displayed columns, Select save as default

SCPM Visibility of Optimal Values (Cont)



SCPM - View of Optimal Values



Export of the Hub Optimal DOS and Quantity1. Go to the Collaborations/Search2. Provide selection criteria, either plant code or Supplier3. Deselect the Forecast (control click)4. Search

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Export of the Hub Optimal DOS and Quantity (continued)1. Select the table configurator (one time set up)2. Bring over the Hub Optimal DOS and Hub Optimal Qty using the arrows3. Select “save as Default” 1

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Note: If you want to use the Exported File with the “Claudio(IBM) SCPM Download Macro you must be sure the Displayed Columns are exactly as indicated above.



Export of the Hub Optimal DOS and Quantity (continued)Now the Hub values are visible1. Select what rows you want to down load (or select all records)2. Select Export

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Export of the Hub Optimal DOS and Quantity (continued)Exported file:



Macro for use with forecast

ESG_SCPM-Vertical_macro_V3.1_add dos.zip

The following macro can be used to show forecast and hub optimals together. Details on using this macro are on the next page. (Double click the link below)



Import forecast data as usual and when the process will be

completed, select the DOS TGT tab

Paste data from the DOS TGT file previously exported from SCPM and Run the TGT DOS

macro

COLLABS.xls

Data will be visible in the output tab

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Improving IBM’s Optimal Inventory / Hub / Safety Stock / Forecast … · 2013-05-24 ·...

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