Unilever case study v1 - wide
8
Context
Transcript of Unilever case study v1 - wide
Context
DemandDrivenUnilever(DDU)
Supply is unreliableand complain of plan changes
Lead-timesare increasing
Service targetsare harder to hit
MOQ’s are increasing
Capacity isconstrained
Planners arefirefighting
• Increasingportfoliocomplexity
• Globalmanufacturing&distribution
• Increasingdemandvolatility
• Globalmaterialsourcing
• Shorteningcustomertolerancetime
• Morecompetitivemarketplace
NorthAmericaNetwork
Canada
East
Canada
Mid
USMid
USEast
West
• NorthAmericanetworkconsistedofsameSKUinmultipleDC’ssuppliedfrommultiplefactories
• DespiteinvestmentinDemandsensingandinventoryoptimisation tools,resultshadstagnated
• S&OPismanagedinSAPAPOwhereoptimisers canbeutilised tomanagesupplyconstraints
DDMRPInitialScope
Canada
East
Canada
Mid
USMid
USEast
West
• FinishedgoodsinventorybuffersplacedatDC’s
• Component(rawandPackaging)placedatfactory
• DuetosupplynetworkcomplexityasolutionwhichenabledDDMRP&MRPtoco-existwasrequired
Results
NorthAmerica
70%
74%
78%
82%
86%
90%
94%
98%
$5,000
$7,000
$9,000
$11,000
$13,000
$15,000
$17,000
$19,000
$21,000
$23,000
$25,000
Inventory Service
DDMRPGoLive
NoChangetoMOQ
MaintainedFGInventory
ImprovedService–
RedtoGreen
38daysLTReduction
NoImpacttochangeover
NoImpacttoNFG
Frozenperiodfrom42to7days
Canada
DDMRPGoLive
50%MOQReduction
50%FGINVReduction
41dayLTReduction
NoImpactto
changeoverNoImpacttoNFG
MaintainedHighService
Frozenperiodfrom42to7days
40%45%50%55%60%65%70%75%80%85%90%95%100%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
FGInventory Service
Factory(parts)buffers
-1,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,0009,000,00010,000,000
JAN FEB MARAPRMAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MARAPRMAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MARAPRMAY JUN JUL AUG
2012 2013 2014
PACK ROH TotalValueUSD Linear(TotalValueUSD)
-
5.0
10.0
15.0
20.0
25.0
30.0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG
2012 2013 2014
PACK ROH TotalDI Linear(TotalDI)
• Manyassumethatbufferingoncomponentswillalwaysincreaseinventory
• Thisisnottrue,typicallyinventoryisheldoncomponentsassafetystockand/orexcessstock
• DDMRPprovidedacontrolledstockingmethodologyeliminatingexcessinventories
