Presentation on theme: "Lou Ann Liebman Project General Manager, Demand Supply Planning December 2001 Improving Enterprise Profitability through Optimized Supply Chains."— Presentation transcript:
Lou Ann Liebman Project General Manager, Demand Supply Planning December 2001 Improving Enterprise Profitability through Optimized Supply Chains
BP ConfidentialDecember, Topics Overview of BP Chemicals DSP Efforts –Scope –Benefits Lessons Learned to Date –Identifying the Value and Selling the Project –Choosing the Technology and Partners –A Successful Implementation –Sustaining the Benefits Summary
BP ConfidentialDecember, BP Group DownstreamUpstream AmericaEuropeAsia DSP Wave 2 DSP Wave 1 BP Chemicals Demand Supply Planning (DSP) Chemicals NitrilesFeedstocksPerformance ChemicalsPolymersOS&DPX/PTAFeedstocksPolymersAromatics/PTAAcetylsO&P AsiaS&ICEuropean JVGlobal O&P Business DevChina O&PPX/PTA/PDDG Bulk commodities, intermediates, and specialty chemicals Single-site, regional, and global businesses Internal, Downstream, Upstream, and external integration
BP ConfidentialDecember, BP Chemicals DSP Functionality Global Planning Wedge Planning Collaborative Forecasting VMI Planning Offer Allocation Policies ATP EXTENDED FUNCTIONALITY Production Planning Demand Management Materials Planning Distribution Planning Inventory Management Scheduling Procurement Logistics Optimization Logistics Optimization Manufacturing Automation Manufacturing Automation Finance Customer Order Management Customer Order Management Related Project BASIC
BP ConfidentialDecember, DSP Phased Approach To Implementation Rapidly provide quick-win benefits Promote standardization across the businesses Provide common infrastructure for linking to other areas (ERP, Mfg, etc.) Reduce cost of delivery and maintenance Improve sustainability of processes Leverage lessons learned Time horizon Sophistication All Businesses Most Businesses Few Businesses DSP W3 DSP W2 DSP W1 Standardization of Core DSP Processes Standardization of Core DSP Processes Initial Implementation With Select Businesses Initial Implementation With Select Businesses Add More Robust Functionality Based on Business-Specific Requirements Add More Robust Functionality Based on Business-Specific Requirements Implement Advanced Features for Selected Businesses Implement Advanced Features for Selected Businesses Complete Implementation With Remaining Businesses Complete Implementation With Remaining Businesses Leveraging of Single ERP Platform TODAY
BP ConfidentialDecember, Technology:Aspen Supply Chain Suite (MIMI) BP Chemicals DSP Costs Partners: TECHNOLOGY Aspen Technology Supply Chain Consultants PROCESS Accenture CGEY SkillSet IT PWC DMR Logica Costs: $0.5-$2.0m/business
BP ConfidentialDecember, Benefits: –Inventory Reductions (Raw Materials, WIP, Finished Goods) –Manufacturing Costs (materials, conversion, cross-plant optimization) –Increased Revenues (demand management, customer differentiation, prime production) –Transportation and Distribution Costs (sourcing, dist. planning) –SG&A (efficiency, headcount reductions) –Swaps/Exchanges BP Chemicals DSP Project Justification Inventory Mfg Costs Revenue SG&A Swaps/Exchanges Distribution Costs Payback: Less Than One Year
BP ConfidentialDecember, Identifying the Value: Assess value -- and verify with stakeholders. Use combination of top-down and bottom-up assessments. Challenge with “best-in-class” perspective. Determine how success will be measured. Lessons Learned: Identifying the Value and Selling the Project Selling the Project: High-level sponsorship is important,… Identify a sponsor who believes in the end goal. Ensure commitment to resources -- $$ and people. … But business/site buy-in is critical. Identify and use champions. Get end-users involved as early as possible. Address alignment and interfaces with other initiatives. Set priorities.
BP ConfidentialDecember, Selecting the Technology: Don’t underestimate technical issues. Quiz vendors hard on technology capabilities. See demos. Talk to references. Expect to encounter need for some developmental work. Choose a technology that has been applied in your industry, and a vendor that has knowledge in particular areas where you expect to see high value. “Has this been done in the field with multiple, paying, petrochemical customers?” Lessons Learned: Choosing the Technology and the Partners Selecting the Technical Partners: Quantity and Quality of resources is critical. Interview key consultants for technical, people, and project management skills. Reserve the right to replace ineffective resources.
BP ConfidentialDecember, Selecting Other Partners: Consider 3rd party assistance for process design work and change management. Lessons Learned: Choosing the Technology and the Partners Recognize process issues will be at least as important as tool development. Don’t implement a faster way to get the same, wrong answer. Automating business rules means first having to agree to them. Change management must also be addressed. Stakeholder Identification Change Readiness Assessments Organization impacts (roles & responsibilities, organizational design changes) Risk Assessments Communication Plans Training Plans Metrics
BP ConfidentialDecember, Securing Internal Resources: Business/site leads should optimally: Have broad understanding of business/site across most of the supply chain field Have detailed knowledge in area where high value is expected Have project management experience Be empowered to make decisions Be able to gather additional business/site input as needed Communicate well to all areas/levels of the business/site Lead resources should be 100%. Part-time resources (such as key end-users) should be at least 25% to be effective. Commit internal resources for life of project. Lessons Learned: A Successful Implementation
BP ConfidentialDecember, Determining Project Approach: Schedule-driven or value-driven Degree of standardization desired One “central” project or a set of individual ones –Benefits come through delivery and use of the individual projects, but implementation and support will be more effective and economical if standardization and leveraging is used. –Central roles should facilitate the individual projects. –Business/site resources need to recognize the benefits of standardizing wherever possible and leveraging learnings across projects. Lessons Learned: A Successful Implementation
BP ConfidentialDecember, Following Good Project Management Basics: Start addressing data issues yesterday. Address roles and organization issues early. Define scope thoroughly up front. Review schedule. If it sounds too aggressive, it probably is. Put deliverables on individuals’ objectives and business/site scorecards. Focus on delivery of high-value pieces first. Get some quick wins. Have a project plan and use it routinely to track progress. Identify robust leading indicators of project success/failure. Replace ineffective resources quickly. Expect challenges and technical hurdles. Manage expectations. Communicate! Lessons Learned: A Successful Implementation
BP ConfidentialDecember, Sustaining the Benefits: Provide for on-going support and enhancements. Ensure all processes have owners. Recognize processes are “living.” Measure and report benefits. Reward champions. Publicize successes. Share learnings. Lessons Learned: Sustaining the Benefits
BP ConfidentialDecember, Understand the potential reward, and set a vision to achieve it. Cultivate internal ownership. Expect to make some mistakes, but learn a lot. Celebrate success! BP Chemicals DSP Summary