© The Delos Partnership 2005 Process Owners and their role Application to the Delos Model.
SCT Paramters 1© The Delos Partnership 2005 Integrated Enterprise Leadership - Top Management’s...
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Transcript of SCT Paramters 1© The Delos Partnership 2005 Integrated Enterprise Leadership - Top Management’s...
SCT Paramters 1 © The Delos Partnership 2005
Integrated Enterprise LeadershipIntegrated Enterprise Leadership
- Top Management’s “handle on the business “
SCT Paramters 2 © The Delos Partnership 2005
Disintegrated Business Disintegrated Business PlanningPlanning
Long termplan
Short termPlan
Medium TermPlan
SCT Paramters 3 © The Delos Partnership 2005
Objectives of Integrated Objectives of Integrated Enterprise LeadershipEnterprise Leadership
• One set of numbers at all times• Integrated Plans• Realistic Plans• Visibility and transparency• Teamwork• Communication of goals and objectives• Decisions made in timely fashion• More planning, less fire-fighting• Consistent performance measures• Delivery of the strategy
SCT Paramters 4 © The Delos Partnership 2005
Lead Time ManagementLead Time ManagementLead time is not something that should be a resultLead time is not something that should be a result- it is something that should be managed- it is something that should be managed
Forecast of
Requirements
Actual Requirements/Sales
Actual Shipments
Planned Production/
Shipments
SCT Paramters 5 © The Delos Partnership 2005
Make to OrderMake to Order
Production = Demand Plan + (Current Order Book - Orderbook Target)
= 70 + 75 - 50)
PRODUCTIONPRODUCTION ORDER BOOKORDER BOOK
SCT Paramters 6 © The Delos Partnership 2005
Integrated Business Integrated Business PlanningPlanning
-3 -2 -1
Demand Plan 70 70 70
Actual Demand 71 75 80
Difference 1 5 10
Cum Diff 6 16
Months 1 2 3 4 5 6 7 8 9
Last Demand Plan 70 70 70 70 70 70 70 70 70
New Demand Plan
Difference
Cum Diff
Months Q4 Q1
210 210
-3 -2 -1
Supply Plan 75 75 75
Actual Supply 70 69 71
Difference -5 -6 -4
Cum Diff -11 -15
1 2 3 4 5 6 7 8 9
Last Supply Plan 75 75 70 70 70 70 70 70 70
New Supply Plan
Difference
Cum Diff
Q4 Q1
210 210
-3 -2 -1
Order Book Plan 61 56 51
Actual Orders 66 67 73 82
Difference 6 17 31
1 2 3 4 5 6 7 8 9
Last Plan 46 41 41 41 41 41 41 41 41
New Plan
Difference
Q4 Q1
41 41
Make – To- Order – Family Units
SCT Paramters 7 © The Delos Partnership 2005
Integrated Enterprise Integrated Enterprise LeadershipLeadership
AACCTTIIOONN
AACCTTIIOONN
Week 1 Week 2 Week 3 Week 4
InnovationReview
InnovationReview
CustomerDemandReview
CustomerDemandReview
SupplyPlan
Review
SupplyPlan
Review
PriorityReview
PriorityReview
Stage 1Stage 1
Stage 2Stage 2
SeniorTeam
Review
SeniorTeam
Review
Stage 5Stage 5
Stage 7Stage 7
Stage 3Stage 3
SupportReview
SupportReview
Stage 6Stage 6
Stage 4Stage 4
SCT Paramters 8 © The Delos Partnership 2005
Framework for Process Framework for Process Review - InnovationReview - Innovation
Process NameProcess NameInputsInputs
Customer enquiryCustomer enquiry
Tasking List (sales)Tasking List (sales)
Specification Specification
Purpose/AgendaPurpose/Agenda
1. Review all new bids and enquiries1. Review all new bids and enquiries
2. Agree which enquiries will form part of 2. Agree which enquiries will form part of the formal forecastthe formal forecast
3. Review resource issues relating to all 3. Review resource issues relating to all new productsnew products
4. Decide which products should be 4. Decide which products should be delayed or cancelleddelayed or cancelled
5. Approve capital expenditure proposal 5. Approve capital expenditure proposal request to go forward to Board request to go forward to Board
OutputsOutputs
Tender document – risks and assumptionsTender document – risks and assumptions
Go/No go decisionGo/No go decision
Capital requirements and resources Capital requirements and resources
PeoplePeople
Sales Director (lead), Bid Manager, Sales Director (lead), Bid Manager, Commercial, KAM, Demand Manager, Commercial, KAM, Demand Manager, Estimating Estimating
Materials, Supply, FinanceMaterials, Supply, Finance
Desired CultureDesired Culture
HonestyHonesty
RealismRealism
All bids to go through this processAll bids to go through this process
MeasuresMeasures
OTIF for new projectsOTIF for new projects
Cost, value, marginCost, value, margin
Capacity and ResourcesCapacity and Resources
Systems to support this stepSystems to support this step
ACT!, TABS, Corporate Planning Model, Time & Attendance, CODA, Excel, Word, Visio. Project planning tool?ACT!, TABS, Corporate Planning Model, Time & Attendance, CODA, Excel, Word, Visio. Project planning tool?
Link to other ProcessesLink to other Processes
Demand, Supply, Support and Prioritisation reviewsDemand, Supply, Support and Prioritisation reviews
SCT Paramters 9 © The Delos Partnership 2005
Framework for Process Framework for Process Review – Customer Demand Review – Customer Demand
Process NameProcess NameInputsInputs
Business strategy Business strategy
Order book salesOrder book sales
Assumptions Assumptions
Major forecast changesMajor forecast changes
Innovation Innovation
Purpose/AgendaPurpose/Agenda
1. Review new product forecasts1. Review new product forecasts
2. Review changes to previous 2. Review changes to previous forecastsforecasts
3. Agree and sign off assumptions3. Agree and sign off assumptions
4. Agree actions to close gaps4. Agree actions to close gaps
5. Review performance measures5. Review performance measures
OutputsOutputs
Sales Forecast/Demand PlanSales Forecast/Demand Plan
Unconstrained demandUnconstrained demand
Uncertainties Uncertainties
Financial projectionFinancial projection
PeoplePeople
Sales Director (lead), KAM, Bid Sales Director (lead), KAM, Bid Support Manager, Demand Support Manager, Demand Manager, Commercial Manager, Commercial
Desired CultureDesired Culture
Cohesive and agreed sales planCohesive and agreed sales plan
MeasuresMeasures
Business planBusiness plan
Forecast accuracy Forecast accuracy
Order book valueOrder book value
Customer service –on time in full to Customer service –on time in full to customer promise datecustomer promise date
Systems to support this stepSystems to support this step
ACT!, TABS, Excel, Corporate Planning modelACT!, TABS, Excel, Corporate Planning model
Link to other ProcessesLink to other Processes
Supply, Prioritisation and Senior Team ReviewSupply, Prioritisation and Senior Team Review
SCT Paramters 10 © The Delos Partnership 2005
Framework for Process Framework for Process Review – Supply Plan (Group)Review – Supply Plan (Group)
Process NameProcess NameInputsInputs
Sales forecast (not Demand Plan Sales forecast (not Demand Plan at this stage)at this stage)
Demonstrated capacityDemonstrated capacity
What ifsWhat ifs
New product plansNew product plans
Planned shut downs etcPlanned shut downs etc
Purpose/AgendaPurpose/Agenda
1. Review demand 1. Review demand
2. Determine if capacity available2. Determine if capacity available
3. Determine issues and possible 3. Determine issues and possible actions for outcomeactions for outcome
OutputsOutputs
Company plan, site plans Company plan, site plans
PeoplePeople
Operations Director (lead), A/D Operations Director (lead), A/D Materials, A/D Supply, Company Materials, A/D Supply, Company Planning Manager, Site Planning Planning Manager, Site Planning Managers?Managers?
Desired CultureDesired Culture
Balanced realistic planBalanced realistic plan
MeasuresMeasures
Schedule adherence (actual Schedule adherence (actual production versus planned production versus planned production)production)
Load versus capacity Load versus capacity
Planned shipments versus actual Planned shipments versus actual shipmentsshipments
Earned value budgetEarned value budget
Systems to support this stepSystems to support this step
TABS, Time & Attendance, CODA, Corporate Planning model(?)TABS, Time & Attendance, CODA, Corporate Planning model(?)
Link to other ProcessesLink to other Processes
Innovation, Supply, Site Supply Plans, Prioritisation and Senior Team reviewsInnovation, Supply, Site Supply Plans, Prioritisation and Senior Team reviews
SCT Paramters 11 © The Delos Partnership 2005
Framework for Process Framework for Process Review – Supply Plan (Site)Review – Supply Plan (Site)
Process NameProcess NameInputsInputs
Capacity required by work centre,Capacity required by work centre,
Demonstrated capacity by work Demonstrated capacity by work centre, Site demand forecasts,centre, Site demand forecasts,
Planned maintenance, New Planned maintenance, New product plans product plans
Purpose/AgendaPurpose/Agenda
1. Review requirements by site1. Review requirements by site
2. Agree any issues and actions 2. Agree any issues and actions designed to resolve issuesdesigned to resolve issues
3. Review performance measures3. Review performance measures
OutputsOutputs
Agreed site production plan Agreed site production plan
Issues associated with the plan Issues associated with the plan and proposed alternativesand proposed alternatives
Proposals on how to constrain Proposals on how to constrain demanddemand
PeoplePeople
Site general manager (lead), Site Site general manager (lead), Site planning manager,planning manager,
Planner/buyers,Planner/buyers,
Programme/production managers Programme/production managers (PAMs)(PAMs)
Desired CultureDesired Culture
HonestyHonesty
Openness Openness
Solution culture Solution culture
MeasuresMeasures
Schedule adherence, Variances to Schedule adherence, Variances to plan, Demonstrated capacity plan, Demonstrated capacity versus planned capacity, Earned versus planned capacity, Earned value budget, Lead time reductionvalue budget, Lead time reduction
Late starts into production, Number Late starts into production, Number of past due orders on TABSof past due orders on TABS
Systems to support this stepSystems to support this step
TABS, Time & Attendance, TABS, Time & Attendance,
Link to other ProcessesLink to other Processes
Supply Plan (Group) reviewSupply Plan (Group) review
SCT Paramters 12 © The Delos Partnership 2005
Framework for Process Framework for Process Review – Priority Review – Priority
Process NameProcess NameInputsInputs
Inputs from all previous stagesInputs from all previous stages
Purpose/AgendaPurpose/Agenda
1. Financial statement of all 1. Financial statement of all demands demands
2. Alternatives for evaluation 2. Alternatives for evaluation (external events and internal (external events and internal events)events)
3. One set of realistic plans 3. One set of realistic plans
OutputsOutputs
Decisions on short term capacity Decisions on short term capacity etc where they can be madeetc where they can be made
Options for Senior Team reviewOptions for Senior Team review
Review of financial pictureReview of financial picture
Options for closing the gapOptions for closing the gap
Numbers to form the basis of next Numbers to form the basis of next year’s budgetyear’s budget
PeoplePeople
Finance Director (lead),Finance Director (lead),
Demand Manager, Company Demand Manager, Company Planning Manager, A/D Planning Manager, A/D Materials/Supply(?)Materials/Supply(?)
Desired CultureDesired Culture
Issue resolution or costed Issue resolution or costed recommendations for Senior Team recommendations for Senior Team review.review.
MeasuresMeasures
Financial forecast to budget as well Financial forecast to budget as well as OTIF for new projects and as OTIF for new projects and customer orders, forecast customer orders, forecast accuracy, schedule adherence, accuracy, schedule adherence, demonstrated capacity versus demonstrated capacity versus planned capacityplanned capacity
Systems to support this stepSystems to support this step
TABS, CODATABS, CODA
Link to other ProcessesLink to other Processes
Innovation, Demand, Supply and Support reviewsInnovation, Demand, Supply and Support reviews
SCT Paramters 13 © The Delos Partnership 2005
Framework for Process Framework for Process Review – Senior TeamReview – Senior Team
Process NameProcess NameInputsInputs
Financial planFinancial plan
Issue resolution or costed Issue resolution or costed alternative alternative
Purpose/AgendaPurpose/Agenda
1. Agreed plan1. Agreed plan
2. Agreed actions2. Agreed actions
3. Reviewed and agreed Financial 3. Reviewed and agreed Financial Plan.Plan.
OutputsOutputs
Agreed one set of numbersAgreed one set of numbers
PeoplePeople
CEO (lead), Sales Director, CEO (lead), Sales Director, Operations Director, Finance Operations Director, Finance Director, Deputy CEODirector, Deputy CEO
Desired CultureDesired Culture
Agreed one set of numbersAgreed one set of numbers
MeasuresMeasures
Demand forecast accuracy, Demand forecast accuracy, Customer order delivery, lead time Customer order delivery, lead time reduction, velocity – all activities reduction, velocity – all activities and functions, quality right first and functions, quality right first time, schedule achievement, on time, schedule achievement, on time new product introductiontime new product introduction
Systems to support this stepSystems to support this step
TABS, Corporate Planning modelTABS, Corporate Planning model
Link to other ProcessesLink to other Processes
Innovation, Demand, Supply, Support Priority reviewsInnovation, Demand, Supply, Support Priority reviews
SCT Paramters 14 © The Delos Partnership 2005
Planned Calendar …….Planned Calendar …….
•Dates set in advance (annually)•Everyone knows when it is•Agenda pre-set•Preparation happens•If nothing to discuss, then no meeting•Almost non-voluntary
SCT Paramters 15 © The Delos Partnership 2005
Two Leadership StagesTwo Leadership Stages
Prioritisation•Family Summary
– Major Changes– Main Assumptions– Threats & Opportunities– Decisions Taken– Decisions to Take– Recommendations,
Implications, Costs•Alignment to Business Plan•Innovation Status
Senior Team Review
SUMMARY BY FAMILY
MAJOR ASSUMPTIONS________________________________________________
DECISIONS OUTSTANDING________________________________________________
RECOMMENDATIONS________________AND COSTS ________________
________________________________
MAJOR CHANGES ________________________________________________________________
DECISIONS MADE ________________________________________________________________
VULNERABILITIES ________________________________________________________________
MAJOR ASSUMPTIONS________________________________________________
DECISIONS OUTSTANDING________________________________________________
RECOMMENDATIONS________________AND COSTS ________________
________________________________
MAJOR CHANGES ________________________________________________________________
DECISIONS MADE ________________________________________________________________
VULNERABILITIES ________________________________________________________________
Demand Supply InventoryBudget Current Plan Previous Plan Prior Year
SUMMARY BY FAMILY
MAJOR ASSUMPTIONS________________________________________________
DECISIONS OUTSTANDING________________________________________________
RECOMMENDATIONS________________AND COSTS ________________
________________________________
MAJOR CHANGES ________________________________________________________________
DECISIONS MADE ________________________________________________________________
VULNERABILITIES ________________________________________________________________
MAJOR ASSUMPTIONS________________________________________________
DECISIONS OUTSTANDING________________________________________________
RECOMMENDATIONS________________AND COSTS ________________
________________________________
MAJOR CHANGES ________________________________________________________________
DECISIONS MADE ________________________________________________________________
VULNERABILITIES ________________________________________________________________
Demand Supply InventoryBudget Current Plan Previous Plan Prior Year
SUMMARY BY FAMILY
MAJOR ASSUMPTIONS________________________________________________
DECISIONS OUTSTANDING________________________________________________
RECOMMENDATIONS________________AND COSTS ________________
________________________________
MAJOR CHANGES ________________________________________________________________
DECISIONS MADE ________________________________________________________________
VULNERABILITIES ________________________________________________________________
MAJOR ASSUMPTIONS________________________________________________
DECISIONS OUTSTANDING________________________________________________
RECOMMENDATIONS________________AND COSTS ________________
________________________________
MAJOR CHANGES ________________________________________________________________
DECISIONS MADE ________________________________________________________________
VULNERABILITIES ________________________________________________________________
Demand Supply InventoryBudget Current Plan Previous Plan Prior Year
Total Number of Changes
Current Last Project
1020
30 4050
6070
Engineering
20
2530
35
40
Other
Current Last Project
20
2530
35
40
Business Review
-8 -4 0 +4 +8
Current Last Project
1020
30 4050
6070
20
2530
35
40
20
2530
35
40
-8 -4 0 +4 +8-8 -4 0 +4 +8
Current Goal
Current Plan FY9x
Plan Actual
0
2550
75
100
10
1520
25
30
100
125150
175
200
100
125150
175
200
Current
Margins
Revenue
Project Cost to Date
0
2550
75
100
10
1520
25
30
100
125150
175
200
100
125150
175
200
1st Pass Test Percent
-3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
INVENTORY
ACTUAL
BUDGET
DEMAND PLANSUPPLY
ACTUAL
ACTUAL
VOLUME
TIME/MONTHS TIME/MONTHS-3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
BUSINESS PLAN
ACTUAL
£ M'sREVENUE
BUSINESS PLAN
PROFITABILITY
ACTUAL
Weeks0
20
40
60
80
100
O/T Delivery Performance
3 1 3 2 0 0 0
7 7 12 6 8 6 11
#No. of Late Deliveries #No. of On-Time Deliveries
A
B
CMonths
Customer's Rating
A
B
C
STDHRSOR
UNITS
WEEKS
REQUIRED CAPACITY
PLANNED CAPACITY(DEMONSTRATED OUTPUT)
RESOURCE A
Total Number of Changes
Current Last Project
1020
30 4050
6070
Engineering
20
2530
35
40
Other
Current Last Project
20
2530
35
40
Business Review
-8 -4 0 +4 +8-8 -4 0 +4 +8
Current Last Project
1020
30 4050
6070
20
2530
35
40
20
2530
35
40
-8 -4 0 +4 +8-8 -4 0 +4 +8
Current Goal
Current Plan FY9x
Plan Actual
0
2550
75
100
10
1520
25
30
100
125150
175
200
100
125150
175
200
Current
Margins
Revenue
Project Cost to Date
0
2550
75
100
10
1520
25
30
100
125150
175
200
100
125150
175
200
1st Pass Test Percent
-3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
INVENTORY
ACTUAL
BUDGET
DEMAND PLANSUPPLY
ACTUAL
ACTUAL
VOLUME
TIME/MONTHS TIME/MONTHS-3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
BUSINESS PLAN
ACTUAL
£ M'sREVENUE
BUSINESS PLAN
PROFITABILITY
ACTUAL
Weeks0
20
40
60
80
100
O/T Delivery Performance
3 1 3 2 0 0 0
7 7 12 6 8 6 11
#No. of Late Deliveries #No. of On-Time DeliveriesWeeks0
20
40
60
80
100
O/T Delivery Performance
3 1 3 2 0 0 0
7 7 12 6 8 6 11
#No. of Late Deliveries #No. of On-Time DeliveriesWeeks0
20
40
60
80
100
O/T Delivery Performance
3 1 3 2 0 0 0
7 7 12 6 8 6 11
#No. of Late Deliveries #No. of On-Time Deliveries
A
B
CMonths
Customer's Rating
A
B
C
A
B
CMonths
Customer's Rating
A
B
C
STDHRSOR
UNITS
WEEKS
REQUIRED CAPACITY
PLANNED CAPACITY(DEMONSTRATED OUTPUT)
RESOURCE A
STDHRSOR
UNITS
WEEKS
REQUIRED CAPACITY
PLANNED CAPACITY(DEMONSTRATED OUTPUT)
RESOURCE A
Strategic Programme 1Strategic Programme 2 Strategic Programme 3 Strategic Programme 4 Strategic Programme 5 Strategic Programme 6 Strategic Programme 7 Strategic Programme 8 Strategic Programme 9 Strategic Programme 10 Strategic Programme 11 Strategic Programme 12 Strategic Programme 13 Strategic Programme 14
Strategic Programme 1Strategic Programme 2 Strategic Programme 3 Strategic Programme 4 Strategic Programme 5 Strategic Programme 6 Strategic Programme 7 Strategic Programme 8 Strategic Programme 9 Strategic Programme 10 Strategic Programme 11 Strategic Programme 12 Strategic Programme 13 Strategic Programme 14
SCT Paramters 16 © The Delos Partnership 2005
Priority ReviewPriority Review
Objectives– To resolve issues around demand supply
and innovation plans - timing and resources
– To provide proposed financial statement– To facilitate what-ifs and provide basis for
decisions (facts not opinions)– To provide issues for resolution by Senior
Team
SCT Paramters 17 © The Delos Partnership 2005
Objectives for Senior Team Objectives for Senior Team ReviewReview• Make decisions on major issues• Delegate issues to the right level• Review the long-term picture not short
term crises• Review process based performance
measures• Review and develop long-term strategy• Make it the meeting for the Executive
SCT Paramters 18 © The Delos Partnership 2005
Agenda for discussionAgenda for discussion
• Current Business situation– Plan versus Budget/Business Plan– Plan versus last plan (volume/value)
• Strategic Review [1/quarter]• Assumptions on which plan is based• Issues for Resolution
– Innovation development issues– Supply/Demand Allocation issues– Major Capacity changes required– Outsourcing– Capital Expenditure Plans– HR/IT support issues– Reorganisation requirements
• Performance measures• Review of IEL process against assessment criteria
SCT Paramters 19 © The Delos Partnership 2005
Family SummaryFamily Summary
0
5,000
10,000
15,000
20,000
25,000
30,000
Euros
Sales Contrib
Sales/Profit
Financial Analysis
Budget
Previous
Current
Major ChangesNew Product included in ForecastTender for Russia included
Major AssumptionsCompetition will reduce price by 5 %We Win Russian Tender
Major Threats
Decisions RequiredInvestment of Eur 0.5 m in Additional capacity for New Product
SCT Paramters 20 © The Delos Partnership 2005
Reviewing the GapReviewing the GapFinancial Strategic Forecast
0
5
10
15
20
25
1 2 3 4 5
Year
£m.
All New
New
Extend
Current
Aspiration
SCT Paramters 21 © The Delos Partnership 2005
Traditional MeasuresTraditional Measures
• Sales versus budget
• Machine Utilisation
• Purchase Price Variance
• Overhead Recovery
• Headcount
• Direct Labour Productivity
• Inventory Level
SCT Paramters 22 © The Delos Partnership 2005
The Core Measures and The Core Measures and Financial EffectFinancial Effect
SCT Paramters 23 © The Delos Partnership 2005
Integrated Enterprise Integrated Enterprise LeadershipLeadership1. Formal process leading to effective decisions2. Facts rather than opinions3. Organised common-sense4. Long-term rather than short-termist5. Performance measurement based rather than “making it”
against the budget6. Ownership and responsibility for the numbers7. A Rolling financial plan – giving time to adjust rather than
panic at year end8. Team-based decision making based on common goals and
objectives9. Strategy set and communicated and delivered10. Requires democracy for the planning phase, and adherence
to plan for the execution phase