Kick off

Introductions <Your name, role and position> <Your story>

Introduction round Who are you? Your background, company and role? What is your experience with The Fresh Connection?

The program The Train-the-Trainer program covers: How the simulation software works Learning points of the simulation Coaching tips for struggling teams Available support material How to use The Fresh Connection as a building block in training programs

Program example Day 1 09.00 - Introductions & Kick off 10.45 - Round 1 of The Fresh Connection 12.00 - Evaluation Round 1 and introduction SC Strategy 12.30 - Round 2 of The Fresh Connection 13.30 - Lunch 14.00 - Evaluation Round 2 and introduction S&OP 14.30 - Round 3 of The Fresh Connection 15.30 - Break (movie clips) 15.45 - More about TFC 16.00 - Evaluation of Round 3 and introduction Sustainability 16.15 - Round 4 of TFC 17.00 - End

Program example Day 2 09.00 - Kick off 09.15 - Introduction Collaboration and round 5 of TFC 10.30 - Evaluation Round 5 10.45 - All role settings/decisions in TFC 11.15 - Introduction of Risk Mment and round 6 of TFC 12.30 - Lunch 13.00 - Evaluation of Round 6 13.15 - Back office: calculate, scores, edit users, reports 13.45 - Intro Interaction (R&D) and round 7 of TFC 14.45 - Evaluation of Round 7 and Intro Interaction (CPA) 15.15 - Round 8 of TFC 16:00 - Evaluation of Round 8 16.15 - Wrap up 17.00 - End

The Challenge The Fresh Connection is a producer of fruit juices In NW Europe suffering severe losses in the last year because of poor performance A new management team has been appointed The assignment is to make the company profitable again By making strategic and tactical choices Simultaneously with the simulation, My Company screen, finance, kpis etc Poor performance: 1. Unhappy customers because we do not meet promised service levels 2. Inventories either too low or too high 3. Obsolescence 4. Production costs are too high 5. Questionable supplier selection

The Roles Simultaneously with the simulation, role screens VP Supply Chain Components Finished product Supply Production Distribution VP Purchasing VP Operations VP Sales Simultaneously with the simulation, role screens

Assortment Two packaging types Three flavors 1L carton 0.3L PET bottle Three flavors Orange Orange C-Power Orange/Mango Shelf life of finished products is 20 weeks In Sales

The Fresh Connection’s Supply Chain Components pallets Finished product pallets SRM Mixing Bottling CRM tankyard Three warehouses and overflow warehouses when needed Two stage production: mixing and bottling Bottling line(s) and mixer(s) for all products MtS, leadtime customers of 1 day (delivery next day) In Operations

Shelf life agreement= 75% If the shelf life agreement is 75%, the internal shelf life becomes 25% In other words, if the customer is promised a remainder of shelf life of 15 weeks at the moment of delivery, inventory of finished products may not rise higher than 5 weeks Finished products are NOT distributed to a customer if the shelf life agreement is violated Shelf life agreement= 75% Internal shelflife Shelf life is 20 weeks In Sales

Market Three customers Retailer Food & Groceries Retailer Land market 500 stores Supply chain leader Retailer Land market 300 stores Discounter Chain of gas stations Dominick’s 50 stores Only PET bottles In Sales

Contract index Price setting You cannot negotiate directly on sales/purchasing prices Negotiate on supply chain performance (SLA’s) This leads to a ‘contract index’ Contract index determines the sales/purchasing price Example (sales) Promise Contract index Basic price Sales price Much 1.1 € 1.5 € 1.65 Little 0.9 € 1.35 In Purchasing

Production reliability Important elements Leadtime Intake time Frozen period Order deadline Delivery window Components Finished product SRM Production CRM Delivery reliability Availability comps Production reliability Service level

Important elements (cont) Trade unit Lot size Production frequency Trade unit Components Finished product SRM Production CRM Contract index Contract index Bonus and penalty Shelf life %

Performance evaluation Costs Operational costs Improvement projects highest ROI Revenue Price: Customer satisfaction Volume: Portfolio Investments Working capital Equipment Buildings My Company screen and Finance 1. Revenue = price x volume. Actual sales price can go up and down influenced by contract index (note, that if you do not deliver on your promises, you get penalties) 2. Sales promotions have an effect on volume, the more promotion pressure you accept, the more your volume will grow

The Performance (cont) The winning score can be the average score of the ROIs from round 1 thru n (or 2 to n etc) It can also be the weighted average score Or the high score of any round Round 1 2 3 … n Weight What does our customer want?

Individual scores Role Based on Purchasing Purchasing costs Operations Operational costs Supply chain Stock value Sales Revenue

Quick Tour testgig3 1. Cockpit: negative ROI, all other kpis 2. Finance: revenues, penalties (solve them!), direct costs (purchasing and production), stock (overflow warehouse inbound), handling (flex manpower), investments 3. Information tab: basic pricing, unit 4. Roles on high level testgig3

Additional remarks Every round pictures half a year of TFC in a steady state. You don’t have to worry about fade in or fade out effects from one round to the next. Out of stock is not missed sales. The Fresh Connection works with backorders to their customers. So they are delivered at a later day. The teams are competing, but they have their own marketspace

The challenge Make this company profitable again You can take x years to do so (dependent on number of rounds) The sooner the better The best team will get the job 6 years = 12 rounds

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Get Started

Strategy into action Levels in version 2013 Theme Sales SCM Operations Purchasing Level 1 Reliability Service level Order deadline Shortage rule Safety stocks # Shifts # Pallet locations # FTE Delivery window Delivery reliability Level 2 Batches and frequencies Shelf life Trade unit Lotsizing in production and purchasing SMED Increase speed Level 3 Speed and quality Payment terms Frozen period Intake time Preventive maintenance Solve breakdowns training Raw materials inspection Supplier selection Quality Transport mode

Extensions in version 2013 Theme Sales SCM Operations Purchasing Extension a S&OP Promotional pressure Category management Forecasting Production interval tool Resource selection Dual sourcing Extension b External collaboration Promotion horizon VMI Outsourcing warehouse (MCC) Inflate PET Supplier development Extension c CO2 footprint Sustainabilty CO2 sla Decrease of water usage Decrease of energy usage Decrease of start up productivity loss Extension d KPIs and targets KPI selection Extension e Supply chain risk management Risk events Relaunch (horizon) Scenarioplanner Tracking & tracing Quarantine Pooling warehouse FTE Contract duration

Getting started Divide roles within your team Go to http://game.thefreshconnection.eu/2012 and log in with username/password, usernames and passwords are case-sensitive During game save new settings (deal in Purchasing and Sales) Calculating results is done centrally by your trainer

Good luck!