Outside in from the Inside Out: The Real Work of Becoming Demand Driven

Spinnaker Proprietary & Confidential 2015

All Rights Reserved 1

Outside In from the

The Real Work Of Becoming ‘Demand Driven’

A Conversation With:



We will try to keep it real as we:

– Look at the demand driven journey that is typical for many companies

– Observe the built-in obstacles that usually exist in organizational and

personal misalignment

– Most importantly, we will look at essential, practical steps you can take

to expose and knock down the barriers

Join us—as we sort through the “skeletons in the closets”

Introduction

Why is it that even the

companies that

understand it still

encounter slow progress

& frustration?



Spinnaker is a leader in supply

chain solutions and services. We

helps clients grow, manage risk,

reduce costs, and improve

customer service by developing

world-class supply chain

capabilities.

SanDisk Corporation designs,

develops, markets and

manufactures data storage

solutions for the Data Center,

Computing, Mobile, and

Consumer Electronics markets.

Supply Chain Insights is a

research firm focused on

delivering independent, actionable

and objective advice for supply

chain leaders.

John La Bouff is the Vice

President of Spinnaker’s Supply

Chain Management Consulting

practice and an avid fan of

Demand Driven.

Shiva Esturi is the Director of

Supply Chain Optimization and

experienced Demand Driven

enabler.

Lora Cecere is a supply chain

visionary who brings the rare

combination of hands-on-

experience in running operations

and building software. Lora is

author of the book Metrics that

Matter (2014) and the recently

published paperback series the

Shaman's Journal. She is also the

co-author of Bricks Matter.

Spinnaker, SanDisk, &

Supply Chain Insights



What is Demand?

DemandSignal

Accurate Weekly Forecasting is ...

Delay from Purchase to

Signal

* Represents emerging markets



• Consumer-driven Supply Networks: Defined by P&G in the 1990s

as a shelf-driven, outside-in process defined by successful execution of the two

moments of truth.

• Demand-driven Supply Networks: As defined by AMR Research in

2004: a supply chain that senses and translates market signals in real time.

• Demand-driven Value Networks: As defined by AMR Research in

2007: A network that senses demand with minimal latency to drive a near-real

time response to shape and translate demand.

• Market-driven Value Networks: As defined by Supply Chain Insights

in 2010: an adaptive network focused on a value-based outcomes that senses,

translates, and orchestrates market changes (buy and sell-side markets) bi-

directionally with near-real time data to align sell, deliver, make and sourcing

organizations outside-in.

Evolution of Demand Driven Concepts



What are the implications for a company on this

demand driven journey?

What’s really different about demand driven for

most companies?

What Does It Really Mean?



Trying To Get “There” From “Here”…

Individual & Organizational

Capability

Change may be unwelcome to those who

prefer the familiarity of the present

Demand Driven needs new talents and

skills that may be out of reach for some

Readiness & Buy-in

Rewards and recognition tend to

remain linked to legacy metrics

Departmental prerogatives often

conflict with the new emphasis on

orchestration—”You’re in MY kitchen!”

Vision

Executives can’t always paint a clear

picture of what’s truly going to change

For some, the Demand Driven mantra

seems like surrender or capitulation to

forces they think they control

…The Journey Is

The Challenge



About SanDisk

Mobile and Connected Devices

Enterprise and HyperscaleData Centers

Client Computing

Laptop & Desktop SSDs Embedded & Removable Storage

Consumer

Enterprise Flash Solutions

• Global leader in flash memory cards

• We enable innovation in four mega markets



• Scalable and vertical integrated manufacturing

• We ship ~2 million units daily

• Key Considerations:– Wafer Fabrication must occur to forecast – fab lead time is several months

– Small number of wafer types become thousands of finished goods

– Retail and OEM customers need short order fulfillment times

– Inventory that sits around loses value quickly

– Revenue not recognized until sell-through in retail/OEM channel

SanDisk’s Adaptive Supply Chain:

Supply Chain Structure & Key Dynamics

SanDisk

joint

venture

w/ Toshiba

External

Silicon

Suppliers

SanDisk Storage Shanghai Factory

SanDisk Storage Malaysia Factory

Vertically Integrated Contract Manufacturers

CM CM

SanDisk

Retail

Fulfillment

Regional

Retail

Fulfillment

VMI Hubs

300,000+

Store

Fronts

OEMs /

System

Integrators

Wafer

Fabrication

Memory Packaging &

Test

Card and Solid State Drive

Assembly & Test

Packaging&

FulfillmentChannel

CM CM

Key SanDisk & JV’s

Supply Chain Partners



SanDisk Adaptive Supply Chain Journey

Shipments in PB

Postponement

Strategy

Customer and

Product

Segmentation

Allocation to

maximize $/GBS

S DS D

S D

Multi Echelon

Inventory

Optimization

Delay product

differentiation

S D

P

• Achieve right balance

between inv and service level

• BU, Ops, Sales interlock

• Customer Ops Mgmnt team

• Structured process for

managing supply chain policy

• Analytics COE

• Phase 0 of PLCT review

• CPFR team

• Value chain integration

• Sell through based

forecasting

• Reduce Mfg frozen fence

• Multi stage inventory

• Push – pull process

• Break to supply replenishment

• Separate demand signal for

supply planning

• Supply Chain COE

• Cost Optimization

Advanced

Planning

Systems - 2006

S – Supply D – Demand P -Product



SanDisk’s Adaptive Supply Chain:

Change Management

Topic Retail / OEM

Partners

BU, Sales &

Marketing

Supply Chain,

Manufacturing

Engineering

Leadership

Shared Vision

Incentives

Skilled

Resources

Mandate, Active Participation, and Governance

by President/COO + Functional VPs

Shared

Scorecards, Gain

Sharing

Cross-Functional Communication Meetings and Workshops

Roadshow with

Leadership

Support to Sell

Vision & Benefits

Sell-Through &

Inventory Metrics

Cycle Time Reduction Goals

Small Core Team including IT & consultant

Extended Team including Key Functional Advisors

Added Support

for Collab

Process

Focus on

Responsiveness

Listen to and Address Concerns



Balancing Act: The Supply Chain Effective

Frontier



Fallacy #1: Functional Excellence



Fallacy #2: A Project-based Focus



So, What Kinds Of Things Go Wrong?

• Some Of The Important Differences Are Hard To Dislodge

– Metrics & Incentives To Do It “The Old Way”

• Top-to-Bottom Understanding Of The Vision

– Who Is Providing Adult Supervision When Working The Details?

• Tools Will Save Us From Ourselves

– …Or Not

• There’s No Home Run

– The Dismal In-Between



Channels & Customers Inside the Enterprise Suppliers & Service Providers

• Reluctance To Share Data

• Immature & Inadequate Systems

• Slow Internal Processes

• Many Battlefronts

• Win-Lose Mentality

• Lack Of Trust

• Metrics Split, Conflicting

• Rewards Based On Legacy Drivers

• Petty Kingdoms & Perks

• Slow/No Information Sharing

• Attitudes Stuck In The Past

• Silos Of Optimization

• Stale & Obsolete Skill Sets

• Reluctance To Share Data

• Immature & Inadequate Systems

• Slow Internal Processes

• Many Battlefronts

• Win-Lose Mentality

• Lack Of Trust

Many Barriers To Adoption

In The End To End Supply Chain

Channels &

Customers

Product

Marketing

Supply Chain

Planning

Finance

Sales

R&D

Logistics

Manufacturing

& Operations

Suppliers &

Service Providers

Sourcing &

Procurement



What Can Be Done To Tackle

Challenges: Top-Down & Bottoms-Up?

People

“Heat Map” The

Key Players And

Plan Individual

Opt-In

Strategies

Process

All Key DD Sub

Processes

Mapped In

Enterprise RACI

Technology

Litmus Test DD

Requirements

For All Systems

Policies

Document The

Rules Of

Engagement

Metrics

Local Metrics

Tie To ALL Of

The Enterprise

Set

Mantra Not

Mission

Impose DD

Process

Architecture

End To End

Application

“Floor Plan”

Revamp Reward

Systems

KPIs As A Set

Shared By All

Top Down (Macro Organization)

Bottoms Up (Person At A Time)



Collaboration: The Right Stuff

SHARED

VISION

+ SKILLS + INCENTIVE + RESOURCES + PLAN + LEADERSHIP = CHANGE

SKILLS + INCENTIVE + RESOURCES + PLAN = CONFUSION

SHARED

VISION

+ INCENTIVE + RESOURCES + PLAN + LEADERSHIP = ANXIETY

SHARED

VISION

+ SKILLS + INCENTIVE + RESOURCES + LEADERSHIP = FALSE

STARTS

SHARED

VISION

+ SKILLS + INCENTIVE + PLAN + LEADERSHIP = FRUSTRATION

SHARED

VISION

+ SKILLS + RESOURCES + PLAN + LEADERSHIP = GRADUAL

CHANGE



What Ends Up Being Different?



Contact Information

Lora CecereFounder & CEO

617.816.9137

[email protected]

John La BouffVice President

650.450.6056

[email protected]

Shiva EsturiDirector, Supply Chain Optimization

408.801.1558

[email protected]

Outside in from the Inside Out: The Real Work of Becoming Demand Driven

Business

Transcript of Outside in from the Inside Out: The Real Work of Becoming Demand Driven