Supply Chain in an Evolving World: Disruptive Technologies, New Business Models, and Operation...

© 2013 Belden Inc. | belden.com | @BeldenInc

John Vu VP, Global Supply Chain Belden, Inc

Supply Chain In An Evolving World: Disruptive Technologies, New Business Models, and Operation Impact

© 2013 Belden Inc. | belden.com | @BeldenInc 2

• Belden Inc Company Profile

• Portfolio Expansion into Strategic Markets

• Regional to Platform Business Model

• Emphasis on Increased Inventory Turns and Free Cash Flow

• Increased Focus on Improving Delivery

• Governmental Regulation on Logistics Industry

Agenda


Belden Inc


Belden Brands


Belden Platforms 2015 Q2


Material Pull System Transition from Made to Stock to Made to Order


• Objective: Decrease Inventory Levels & Improve Customer Satisfaction

• Transition to Made to Order from Made to Stock • Development of Material Pull Systems (MPS) − Designed web-based MPS, with physical kanban cards, that aligned

manufacturing value streams with true customer demand. − Real-time tracking of kanban inventory levels − Electronic signals from inventory warehouses to appropriate

manufacturing plant − Lessened warehouse travel time to receive inventory as well as pick

orders − Transparent to customer delivery and quality expectations − Increased free cash flow

Focus on Increased Inventory Turns & Free Cash Flow


Before Implementation of MPS at Richmond DC


After Implementation of MPS at Richmond DC


Results of MPS

2009 JOP 2015 YTD Improvement

OTD 92.0% 96.2% 4.2%

Quick Turns Rate 4.9 9.4 4.5

FG Inventory $72.4M $31.4M $41.0M

Open Locations @ RDC

2% 15% 13%

% Production Applied to Cust.

Orders55% 90%+ 35%


Inventory Need a more dynamic, sustainable process and inventory structure that

adapts to changing demand profiles

ABC/XYZ methodology being leveraged on broader scale and tracked through LDM To date: $3.3M Kanban Inventory Reduction

Will develop best practices

LDM Daily Tracking (Materials group)

Continous Improvement in Inventory Turns

ABC/XYZ delivers a vision and an inventory strategy that can support our corporate objectives.


Emphasis on Customer On-Time Delivery


Monthly SIOP – Sales, Inventory, and Operations Planning

Historical Sales Data

Customer Forecasts

Project Pipeline

Market Intelligence

12 Month Demand forecast

Manufacturing Capacity Review

Manufacturing Cell

Production Plan

Forecast Accuracy

Sales / Marketing Supply Chain / Operations


Daily Backlog / Capacity / Lever Reviews by Plant

Low Backlog – Pull levers to flex staffing down or move work

into this area

Healthy Backlog – no action needed

High Backlog – Pull levers to increase capacity or move work out of area

The supply chain organization understands plant capacity and will move work between facilities to

balance the demand and meet customer requirements


• OTD to Customer Request Date – measures the true need of the customer. − Brought key customers to Belden to develop and refine the

measurement through Kaizen events

Measuring On Time Delivery (OTD)

25%30%35%40%45%50%55%60%65%70%75%80%85%90%95%

OTD % to Customer Request Date


Achieve 95% OTD for Top 10 Customers

• Belden receives month scorecards from our top 10 customers on how they score our monthly delivery performance

• Monthly review meetings are held with customers where we did not achieve 95% to review root cause and discuss improvement initiatives


Governmental Regulation On Logistics Industry


Compliance * Safety * Accountability (CSA) • The Federal Motor Carrier Safety Administration (FMCSA) initiative to

improve large truck safety, and ultimately reduce crashes, injuries and fatalities that are related to commercial motor vehicles

Three major components to monitor commercial carriers:

1. Measurement • Safety Measurement System (SMS) collects data through road side & crash

inspections on 7 categories of information called the BASICs 2. Evaluation

• Identifying which carriers require intervention through a policy driven process • Determining which carriers should be deemed “unfit” using a regulatory process

called Safety Fitness Determination (SFD) 3. Intervention:

• Warning letters, targeted road side inspections, on & off site investigations • Creation of safety plans, issuing violations and/or claims, Out of Service Orders

Transportation Regulations


Hours of Service (HOS) Rules • Regulations published by the FMCSA for operators of commercial

vehicles governing the number of hours they may work

Overview: • Driver is allowed 14 hours “on duty” working within a 24 hour period • May drive a maximum of 11 hours within that period • Must have a minimum of 10 hours “off duty” within that period • May only work 60 hours within a 7 day period • Must have a minimum of 34 consecutive hours of off duty time between

work weeks in order to “restart” their log



DOT – EPA fuel, greenhouse-gas standards • In June 2015, a 2nd round of standards was proposed by the

Obama Administration in follow up to its’ 2011 initiatives − Goal to have it signed in 2016 and effective in 2018

• Over the lifetime of the vehicles sold under the program, the EPA

notes these new standards will: − Lower CO2 emissions by about 1 billion metric tons − Cut fuel costs by about $170B − Reduce oil consumption by up to 1.8B barrels

• Environmental Defense Fund (EDF) estimates the new standards

will spawn the development of higher-efficiency tractor-trailers that will get 9.5 MPG. (2010 average was 5.8 MPG)


Supply Chain in an Evolving World: Disruptive Technologies, New Business Models, and Operation...

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