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The Case for A Comprehensive Supply Chain Solution Spring 1999.

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Presentation on theme: "The Case for A Comprehensive Supply Chain Solution Spring 1999."— Presentation transcript:

1 The Case for A Comprehensive Supply Chain Solution Spring 1999

2 2 Agenda General Cable Corporation Overview Supply Chain Case Study Telecom Business Recent Acquisition Career Planning

3 3 General Cable Company Profile Size =~ $1.2 Billion Sales ~ $128 Million Operating Income Products = Copper, Aluminum & Optical Fiber Wire & Cable Markets = Communications & Electrical Facilities=18 Manufacturing Plants 5 Regional Distribution Centers Employees=4,600 Associates An Industry Leader

4 4 General Cable Product Mix Electrical: 59% Communications: 41% Everything Our Customers Need - Power of One

5 5 Results of Operations 1995 -1999 Est. Net Sales ($MM) Operating Earnings ($MM)

6 6 Agenda General Cable Corporation Overview Supply Chain Case Study Telecom Business Recent Acquisition Career Planning

7 7 GCC Supply Chain Management - 1995 Industry Characteristics-1995 Warehouses:80 Inventory Turns:4.2 Typical Cycle:15 - 45 days Metrics:None Technology:Outdated Processes:Manual and Unresponsive Fill Rates:80 - 85% High operating costs Poor asset utilization Large inventory investments Long cycle times Poor customer service Unresponsive planning systems ResultsDomino Approach Purchasing Manufacturing Warehousing Distribution Transportation Customer Satisfaction Fragmented and Functional Management SCM Professionals:1

8 8 Supply Chain Management - 1998 GCC GCC Characteristics-1998 Anaheim, CA Dallas, TX Atlanta, GA Tampa, FL Low operating costs Outstanding asset utilization Reduced inventory investments Short cycle times Legendary customer service Responsive planning systems RESULTS Horizontal and Integrated Management Customer Requirements Purchasing Forecasting & Scheduling Manufacturing Replenishment & Distribution Transportation Customer Satisfaction Processes Systems and Information Flows Financial Management Product & Service Flows 1998 Network Toronto Vineland, NJ Lebanon, IN Seattle, WA SCM Professionals: 20 Warehouses: 9 Inventory Turns: Up to 5.5 Typical Cycle: 1 - 3 Days Metrics: Comprehensive Technology: State of the Art (Downstream) Processes: Fast and Improving Fill Rates: 95+% Clifton, NJ

9 9 The team had driven substantial change: Three year strategic plans and annual business plans are a part of our culture 70 warehouse locations have been closed Five new distribution centers are fully operational These five facilities, with a total of 1.1 million square feet, shipped $700 million in 1998 sales We hired more than 200 Associates and re-located approximately $100 million of finished goods inventory to enable this network Metrics are comprehensive and timely, enabling all organizations to understand and react to key challenges Inventory accuracy now exceeds 98% Inventory planning and deployment is now driven by full-time professional supply chain managers 7 to 40 day cycle time reductions have been driven through our scheduling and deployment processes Several thousand SKUs have been eliminated More than 40 enhancements have been made in redesigning our legacy systems, enabling basic upstream capabilities such as planning and deployment State of the art systems have been installed downstream: Modern, paperless warehouse and transportation management systems support our new infrastructure Every bar code in the company has been re-designed Approximately 500,000 data elements were corrected to enable the systems to operate properly Partnerships have been developed with key carriers, driving several progressive programs: 60% of our carriers have been eliminated EDI relationships now represent 65% of all transactions, up from zero less than one year ago Dynamic consolidation programs are driving bottom-line savings Metrics are timely and actionable Internal costing is now activity-based

10 10 Key Customer Benefits Our customers are rewarding our results. For example: Our top 20 customers, representing 60% of company sales, are growing at 30% annually The Home Depot will exceed $150 million in 1999 sales. We are shipping at 98% fill rates through our new network. Products are sold on behalf of 5 product teams, manufactured in 12 plants. Volume is up from less than $10 million three years ago US West views our capabilities as so progressive that they asked us to re-design their supply chain capabilities, and at one point asked us to provide the logistics services Together with Sales Systems, weve brought a number of value-add services to our customer base: Comprehensive EDI capabilities VMI Direct Store Delivery Consolidated, cross-dock DSD Advance Ship Notifications Custom bar coding Inventory turns are up 25%, supporting a RACE near 30%

11 11 Key Customer Benefits GE Supply

12 12 Lessons Learned Dallas RDC Unionization Poor Atlanta WMS Start-up Poor fill rates Leadership and union avoidance training Negotiated a contract which produced $180,000 in savings over 3 years Building the foundation for decertification NERDC Results: Transparent to our customers, went live with WMS, constructed a new facility, staffed up by 50%, launched The Home Depot, increased line volume throughput by 300%, and moved $10 million of inventory out of 3 buildings into new facility Comprehensive root cause analysis Compensation system alignment Resource deployment To be sure, we had some set backs, but weve learned from the disappointments to build an even stronger capability: Set BackReaction

13 13 Cross-functional teamwork will be more important than ever Service and turns will be heavily dependent on manufacturing execution Forecasting and demand management will contribute to service success State of the art supply chain systems (planning, scheduling, manufacturing and deployment tools) will drive step change performance in service, output, and working capital Turns and service will drive all priorities The foundation has been built for success in 1999 and beyond: 1999 AND BEYOND

14 14 What Is It? An integrated system solution consisting of a suite of tools. The suite is connected to instantly view results of activities up and down the supply chain. Demand Management –Forecast accuracy and integrity –Data based insights –Consensus planning –Uncertainty reduction –Impact modeling –Planning by customer Inventory & Replenishment Planning Planning –Simulation modeling –Inventory optimization –Planning by targets –Continuously reconcile demand with supply –Constraint balancing –Available to promise capability Manufacturing Planning –Optimizing resources –Balancing demand priorities with objectives –Finite capacity planning –Cross enterprise utilization –Activity based costing models –ADC/paperless shop floor On Line, Enterprise Wide, Real Time Sales and Operations Planning

15 15 Benefits Summary Cycle Time Reductions Significant (40%) Data Entry Reductions Significant (75%) WIP Reductions Significant (25%) Lead Time Reductions Significant (30%) Product Quality Input Significant (15%) Sounds Like a Silver Bullet - Too Good to Be True?

16 16 Risks and Concerns This is only software - it doesnt actually manufacture or distribute products It does not keep equipment up and running It is fully dependent on high quality data - many parts of our company do not have it Significant culture and behavioral changes are required Top grading will be required System is LAN/WAN based We Must Not Be Lured Into Thinking $2 Million and 6 - 12 Month Systems Integration Project Will Take Us to a Significantly New Level of Performance

17 17 Agenda General Cable Corporation Overview Supply Chain Case Study Telecom Business Recent Acquisition Career Planning

18 18 Outside Voice & Data Products GCC markets telecommunications wire & cable products to RBOCs, independent telephone companies and communications distributors General Cable, CSI and Superior deliver 90% of the U.S. demand GCC operates a customer-driven team focused on outstanding service and value creation Business Overview Competitors BellSouthGraybar AmeritechUSWEST GTE Supply SBC Power & Telephone Supply Key Customers

19 19 Business Strategy Perfect quality Low cost producer Competitive pricing Relentless productivity Strong brand recognition Reputation as service leader Capital investment for future quality and growth Reduce fixed costs in customer operations (facility closures) Drive non-price approaches to customer productivity (Copper forward purchase, Copper tolling programs…) Drive working capital and operating cost reductions through process re- design Provide VMI to drive outstanding turns and service for our customers Responsiveness through on-site integration managers Our assets, expertise and creativity are focused on providing outstanding quality and service at competitive pricing, while simultaneously driving value on behalf of our customers. Customer Value Creation Business Foundation Proven Results - Demonstrated Value

20 20 Value-Add Services We continue to provide an increasing array of services to our customers. We Seek to Differentiate GCC and Our Customers With Creative Value-Add Services

21 21 Result: Poor service and long lead times Foundation For Service Excellence We have departed from industry norm and taken a radically different approach to planning, scheduling, manufacturing and finished goods strategies. Industry Standard Feb 1 Schedule March Production Time (Weeks) General Cable Approach Result: Outstanding service and short lead times Jan 28 Schedule Feb 8-19 Production Time (Weeks) Demand driven sequencing Make to stock strategy Ship on demand performance Manufacturing driven sequencing Make to order preference Ship when ready performance This Capability Provides the Foundation For Sustained High Levels of Service

22 22 1999 Plan Copper Adjusted Sales - Up 21% Operating Income - Up 29% Working Capital Turns - Up 1% 93% 95%+ Service - Steady at 95% or Better $ Millions Turns On-time Fill Rate

23 23 Agenda General Cable Corporation Overview Supply Chain Case Study Telecom Business Recent Acquisition Career Planning

24 24 General Cable / BICC Company Profile Size~$3.0 Billion Sales ~$170 Million Operating Income ProductsCopper, Aluminum & Optical Fiber Wire & Cable MarketsCommunications, Electrical, Industrial & Utilities Facilities58 Manufacturing Plants in 19 Countries Employees Over 13,000 Associates Strengths People Customers Technology & Materials Knowledge Manufacturing Capabilities Product Offering Innovation & Marketing Skills A Worldwide Leader

25 25 Integration Plan Focus: Why?:

26 26 Agenda General Cable Corporation Overview Supply Chain Case Study Telecom Business Recent Acquisition Career Planning

27 27 Selecting A Direction What do you want? What are the implications of your ambition? Profession? Lifestyle? Pressure? Responsibility? Lifestyle? Personal Time? Hobbies? Spouse? Children? Friendships?

28 28 A Path To Success Aggressiveness Intelligence Analyses Communication skills Verbal Written Broad business insight Common sense Strategic thinking What capabilities are required?... A Balanced Portfolio Is a Likely Path to Success

29 29 Think Strategically Shareholder and Wall Street values Executive Suite Management Team The people who make you successful Increasing shareholder value Increase EPS, ROI, cash flow, sales growth, income growth, working capital progress Strong value proposition Reducing operating costs Improving customer service Winning new business Turning inventories faster Attract, retain, teach, develop, train, educate, promote Value Proposition Roll In Organization

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