1. 1 © The Delos Partnership 2004 Delos Excellence Project Implementation Process Design

2. 2 © The Delos Partnership 2004 Delos Change Journey MobiliseDesignCommunicateReviewUnderstand Identify quick Benefits Develop Change Vision InternalSell-in ReviewSystems Establish Resources Resources Gain quick Benefits Detailed Process Design Public/PrivateWorkshops DevelopSystems Develop Task Teams Gain early Benefits Document Policies etc InternalEducation CreateSystems EstablishOrganisation SecureBenefits Refine ASSESSContinueEducation RefineSystems GainTeamwork ASSESS Cost/Benefit Develop Bus Strategy InitialEducation AppointSponsor PILOTPILOTPILOT

3. 3 © The Delos Partnership 2004 Task Teams 1.Integrated Enterprise Planning 2.Innovation and Project Management 3.Customer Relationship Management 4.Supply Management – Internal and External 5.Support Activities 6.Performance Measures 7.Data Accuracy 8.Continuous Improvement 9.People and Culture

4. 4 © The Delos Partnership 2004 Task Force IntegratedEnterprisePlanningIntegratedEnterprisePlanning

5. 5 © The Delos Partnership 2004 Integrated Enterprise Planning Composition CEO [chair] Finance Director Operations Director Sales and Marketing Director HR Director IT Director Project Leader

6. 6 © The Delos Partnership 2004 Integrated Enterprise Planning External Education –Integrated Enterprise Planning Workshop –Detailed Process based workshops Internal Education –Process –Software –Behaviour Change requirements ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

7. 7 © The Delos Partnership 2004 Framework for Process Review Process Inputs Outputs People Behaviour/Culture Measures/Performance Indicators ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

8. 8 © The Delos Partnership 2004 Framework for Process Review Process InputsPurposeOutputs People Desired Culture Measures Link to other Processes

9. 9 © The Delos Partnership 2004 IEP Benefits 1.Visibility 2.One set of numbers 3.Long-Term not short term 4.Easier to derive budget 5.Simulation 6.Financial review 7.Ability to deliver strategy ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

10. 10 © The Delos Partnership 2004 Integrated Enterprise Planning Issues to address : Process Ownership Operation of processes –Innovation –Demand –Supply –Support –Prioritisation –Senior Team Review Timetable of meetings Agenda Meeting attendees Family Groupings Performance Measures ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

11. 11 © The Delos Partnership 2004 Integrated Enterprise Planning - Issues 1.Link to Board Meeting Capital Expenditure Sourcing of Production Acquisition Business Restructuring Policy Changes 2.Dealing with major crises Need for fast track process ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

12. 12 © The Delos Partnership 2004 Integrated Enterprise Planning 1.Need for aggregation facility by family 2.Rolling 12 month picture 3.Actual to date plus rest of year 4.Spreadsheet or specialist software 5.Integration of Demand, Supply and Inventory/backlog targets ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

13. 13 © The Delos Partnership 2004 Integrated Enterprise Planning - Stages 1.Pilot activity 2.Have first meeting 3.Concentrate on one/two families 4.Add families asap 5.All families required to make it useful 6.Financials 7.Replace the budget

14. 14 © The Delos Partnership 2004 IEP - Problems 1.Data availability 2.We don’t have the tools 3.We can’t work as a team – I can though 4.Geography 5.Diaries already full 6.MD is marketing led 7.Short-term focus 8.Crisis and event driven 9.Too many initiatives

15. 15 © The Delos Partnership 2004 IEP Solutions 1.MD and Steering Committee to lead 2.Process ownership 3.New Performance Measures 4.Plan out meetings for 2 years 5.Allow time for discussion 6.Look to see where existing meetings can be replaced 7.Delegate upwards

16. 16 © The Delos Partnership 2004 MS/Sponsor’s role 1.Call the first meeting 2.Encourage the fact that it is a different way of running the business Honesty, realism, trust Rolling budget 3.It involves more detail maybe than before 4.Attend each meeting

17. 17 © The Delos Partnership 2004 Integrated Enterprise Planning #ActivityTargetComplete 1Responsibility for implementation of Integrated Enterprise Planning assigned to MD or equivalent 2Initial Workshop on Sales and Operations Planning complete 3Product Families, Planning Horizon, and Time Fences agreed 4Performance measurements to be reported have been agreed 5Meeting cycle agreed and timetable for next 12 month published 6Process started with one Family 7All other families implemented in the process 8Financial linkage to Budget completed

18. 18 © The Delos Partnership 2004 Task Force InnovationAnd Project Management InnovationAnd

19. 19 © The Delos Partnership 2004 Task Team Innovation Process Owner [Chair] Marketing Manager Production Manager Industrial Engineering manager Purchasing Quality Research and Development

20. 20 © The Delos Partnership 2004 Innovation Education External Education –Project Management Workshop –PMI Accreditation –Software understanding Internal Education –Project Management course –Software understanding ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

21. 21 © The Delos Partnership 2004 Design 1.Stage Gate process 2.Business Case management 3.Prioritisation of projects 4.Project Review ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

22. 22 © The Delos Partnership 2004 Programme Management Framework Enabling Processes Tools IEP Prog. Org. Initiate Plan Execute Control Close Assessment Criteria ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

23. 23 © The Delos Partnership 2004 Integrated Business Plan Integration of Innovation InnovationSupply Chain ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

24. 24 © The Delos Partnership 2004 Management of Innovation Stage/Gate Process Formal Process for Managing Project Gate 0 Gate 0 Gate 1 Gate 1 Gate 2 Gate 2 Gate 3 Gate 3 Gate 4 Gate 4 Stage 0 Stage 1 Stage 2 Stage 3 Stage 4 Review Investigate Financial Case Financial Case Develop Test Launch ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

25. 25 © The Delos Partnership 2004 Bill of Activity – Link with Planning Ship Pack Process Validation Process Validation Develop Process Develop Process Source Packs Source Packs Develop Artwork Develop Artwork Source Equipment Source Equipment Design Layout Design Layout Lt = 2 weeks Lt = 6 weeks Raw Material Raw Material Lt = 4 weeks Lt = 10 weeks Lt = 10 weeks Lt = 6 weeks Lt = 6 weeks ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

26. 26 © The Delos Partnership 2004 Benefits 1.Control over innovation 2.Fewer expensive mistakes 3.On time product introduction 4.Management of too many initiatives 5.Faster implementation timescale Thank goodness for the last minute or nothing will get done…. ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

27. 27 © The Delos Partnership 2004 Organisation 1.Innovation Manager 2.Programme Managers 3.Responsibility for Projects 4.Resource owners linked into Programme Managers 5.Cross-functional and team based activities ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

28. 28 © The Delos Partnership 2004 Innovations Manager Strategy Innovation Manager Development Ideas Project Plans Development Plans Supply Plans Project System Prioritised Plans ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

29. 29 © The Delos Partnership 2004 Systems 1.Standard Project Management tools Phases/Activities/Tasks GANTT and PERT Charts 2.Displays capacity 3.Multiple projects aggregated 4.Provides Earned Value Measurement 5.Critical Path analysis clear ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

30. 30 © The Delos Partnership 2004 Innovation Management #ActivityTargetComplete 1Responsibility for implementation of Innovation Management assigned to an Innovation process owner 2Initial Workshop on Innovation and Programme Management 3Stage Gate and Business Filter process defined. Agreement on sign off authority levels, and prioritisation 4Performance Measures for successful completion of milestones agreed. Earned Value calculation agreed. 5Software for Programme Management tested and signed off 6Cross Functional Programme management organisation established.

31. 31 © The Delos Partnership 2004 Task Force Sales Forecasting And Customer Management Sales Forecasting And Customer Management

32. 32 © The Delos Partnership 2004 Task Force Composition Marketing Director [chair] Sales Representative Purchasing Master Scheduling IT Manager Project Team Member

33. 33 © The Delos Partnership 2004 Education External Education –Sales Forecasting and Demand Management –Customer Relationship Management Internal Education –Process –Software –Performance Measurement ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

34. 34 © The Delos Partnership 2004 Design Issues to address: –Sales Forecasting Level, Unit of Measure, Horizon and Time Buckets Forecast Consumption Abnormal Demand –Customer Relationship Management Organisation around customers Use of Software Electronic links/Planning links –One set of numbers Link to targets and actual versus budget ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

35. 35 © The Delos Partnership 2004 Design - Issues 1.Responsibility for Forecast 2.Frequency of Forecasting 3.Management of Abnormal Demand 4.Sticking to the rules ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

36. 36 © The Delos Partnership 2004 Benefits 1.Visibility 2.Forecast by product – not just value 3.One set of numbers 4.Supply Chain can use numbers 5.Forecast Accuracy measure leads to stability 6.Know the customers ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

37. 37 © The Delos Partnership 2004 Organisation 1.Need for a Demand Manager 2.Link to Customer Services 3.Responsibility for Forecast Sales and Marketing 4.Customer Facing teams 5.Demand control versus planning ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

38. 38 © The Delos Partnership 2004 Systems 1.Specialist Forecasting system Linear regression Time series Simulation 2.Should be easy to understand 3.Capability to enter in Marketing/Sales input 4.Measures Forecast accuracy 5.Allows aggregation and proration easily 6.Customer Relationship system ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

39. 39 © The Delos Partnership 2004 Issues 1.Responsibility for Forecast 2.Can’t forecast – our business is different 3.Only forecast 20 % that account for 80 % of value 4.Only forecast by value 5.Only provide a forecast for 6 months 6.Forecast accuracy – but what about beating the budget ? 7.Salesmen should sell, and not waste time forecasting

40. 40 © The Delos Partnership 2004 Solutions 1.Sales and Marketing Director to lead 2.Employ good system to deal with 20 % by value, and manage through Demand Manager 3.Recognise Value forecast of no use 4.Adopt new Measures of Performance 5.Sales can save time through forecasting 6.Accurate data for CRM system

41. 41 © The Delos Partnership 2004 Customer Relationship Management #ActivityTargetComplete 1Responsibility for implementation of Customer Relationship Management assigned to an Demand process owner 2Initial Workshop on Sales Forecasting and Demand management and CRM 3Forecast process agreed around Level, Horizon, Units and Buckets, and frequency of update 4Responsibility for Sales Forecasting established with Sales and Marketing 5Policies on Forecast Consumption, abnormal demand, and use of Available to promise defined, and approved by Steering committee 6Software for Sales Forecasting and Demand management and Customer Relationship Management tested and signed off 7Demand Planning and Demand Management organisation set up under Sales and Marketing

42. 42 © The Delos Partnership 2004 Task Force MasterProductionSchedulingMasterProductionScheduling

43. 43 © The Delos Partnership 2004 Master Scheduling Task Force Composition Marketing Director [chair] Sales Purchasing Finance Master Scheduling IT Manager Project Team Member

44. 44 © The Delos Partnership 2004 Master Scheduling External Education –Supply Chain Techniques –Supplier Relationship management Internal Education –Process –Software –Performance Measurement –Behaviour Change ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

45. 45 © The Delos Partnership 2004 Master Scheduling Issues to address: –Make To stock/Make to Order/Assemble to Order –Level at which to MPS –Use of Rough Cut and Detailed Capacity Planning –Use of Demonstrated Capacity –Available to Promise –Time Fences –How to handle Abnormal Demand –Link to Integrate Enterprise Planning –Creation of Work To Lists –Responsibility to Plan the Work –Use of Action Messages ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

46. 46 © The Delos Partnership 2004 Master Scheduling Design is crucial Make to Order/Assemble to Order/Make to Stock Bill of Material structure to support this OE/Spares; Finished Goods/Bulk Forecast Consumption Available to Promise ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

47. 47 © The Delos Partnership 2004 Master Scheduling Policy Forecasting Process Management of Abnormal Demand Time Fences Responsibility for change Target Service Levels Safety Stock policies ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

48. 48 © The Delos Partnership 2004 Master Scheduling - benefits 1.Improved Delivery to Promise and request 2.Achievable Plan 3.No backlogs 4.Stability in the supply chain 5.Manufacturing know that they can make it 6.Suppliers have achievable due dates ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

49. 49 © The Delos Partnership 2004 MPS Organisation Number of Planners Vertical vs Horizontal Timing of new planners Training in new ways of working Independence Role of Sales and Marketing Role of Master Scheduler ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

50. 50 © The Delos Partnership 2004 MPS Software needs 1.Firm Planned Order 2.Forecast Consumption 3.Abnormal Demand Filters 4.Available to Promise [2 level ?] 5.Aggregation 6.Rough Cut Capacity Planning 7.Time Fences 8.Forecast Interface 9.Order Entry Interface 10.Final Assembly Scheduling ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

51. 51 © The Delos Partnership 2004 Master Production Scheduling #ActivityTargetComplete 1Responsibility for implementation of Supply Management assigned to Supply Process Owner 2Initial Workshop on Sales Forecasting and Demand management and CRM 3Model for Master Scheduling established which specifies how Make To stock, Assemble To order and Engineer to Order will operated 4Software checked for ability to support the Master Scheduling model. 5Policies on Time Fences and Changes to Master Schedule agrees and approved by Steering committee 6Performance measures and target service levels agreed 7Master Scheduling Organisation established which follows Vertical Planning concept.

52. 52 © The Delos Partnership 2004 Task Force SupplierRelationshipManagementSupplierRelationshipManagement

53. 53 © The Delos Partnership 2004 Task Force Supply Chain process owner Purchasing Planning Finance Development Stores Systems Project Team member

54. 54 © The Delos Partnership 2004 Education External Education –Procurement Master Class –Supplier Relationship Management Internal Education [to suppliers] –New ways of working –Use of e-procurement Internal Education [to employees] –Effective Procurement ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

55. 55 © The Delos Partnership 2004 Design Procurement separate from Supplier Management Measurement of suppliers –Right First Time –Quality Focus on Total Value –Total Cost Reduction –Total Cost avoidance ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

56. 56 © The Delos Partnership 2004 Supplier Relationship Management Clear Vendor agreements Vendor contracts and agreements Measurement –Delivery –Price –Quality –Lead Times Use of e-procurement ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

57. 57 © The Delos Partnership 2004 Procurement Analyse products and suppliers –Major/Minor –Critical/non-critical Analyse total spend Look for opportunities Set targets for cost reduction ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

58. 58 © The Delos Partnership 2004 Benefits Total cost reduction Effective negotiation Lead time reduction Quality improvement Inventory reduction On time deliveries Co-development programmes Integration Long-term co-operation ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

59. 59 © The Delos Partnership 2004 Organisation Procurement Management –Buyers who understand supplier processes –Buyers who can make deals Supplier Relationship Management –Manages schedules –Deals with day to day issues –Encourages early warning –Keeps system up to date ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

60. 60 © The Delos Partnership 2004 System Vendor Schedule Total spend analysis by : –Category of spend –Value Performance Measures –On time –Quality Make vs buy options ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

61. 61 © The Delos Partnership 2004 Purchasing Task Force #ActivityTargetComplete 1Task Force established with Purchasing as the Task Force Leader 2Establish Vendor Scheduling reporting process, and use. 3Determine Purchasing Strategy based on current spend map 4Determine measurement criteria for suppliers, and establish SMART goals to be shared with suppliers 5Carry out Education programme with suppliers focussing on the key elements of the Purchasing strategy. 6Set up Qualified Vendor group 7Set up organisation that differentiated between Procurement and schedulers.

62. 62 © The Delos Partnership 2004 Task Force LeanAnd Agile Business LeanAnd

63. 63 © The Delos Partnership 2004 Lean And Agile Task Force Composition Operations Director [chair] Marketing Sales Purchasing Finance Master Scheduling Project Team Member

64. 64 © The Delos Partnership 2004 Lean and Agile External Education –Lean Techniques Internal Education –Business simulation on lean –5 S and Housekeeping –SMED exercises –Performance Measurement –Process Value Stream mapping ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

65. 65 © The Delos Partnership 2004 Design 1.Review product strategy 2.Determine right strategy for Runners Repeaters Strangers 3.Review all processes Manufacturing, Office, External Suppliers 4.Take out all non-value adding activities 5.Set up Drum Beat production 6.Apply kanban ideas – visual systems ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

66. 66 © The Delos Partnership 2004 Velocity Measure STORESTORE STORESTORE INSPECTINSPECT INSPECTINSPECT RECEIVERECEIVE RECEIVERECEIVE PICKPICK PICKPICK RUNRUN RUNRUN INSPECTINSPECT INSPECTINSPECT STORESTORE STORESTORE RUNRUN RUNRUN INSPECTINSPECT INSPECTINSPECT STORESTORE STORESTORE Elapsed Time VA Velocity % = sum of Value Added Time [VA] ------------------------------------- Total Elapsed Time

67. 67 © The Delos Partnership 2004 Continuous Improvement A rich man, fond of felines, asked a famous Zen ink painter to draw him a cat. The master agreed and asked the man to come back in three months. When the man returned, he was put off, again and again, until a year had passed. Finally, at the man's request, the master drew out a brush, and, with grace and ease, in a single fluid motion, drew a picture of a cat - the most marvellous image the man had ever seen. He was astonished; then he grew angry. "That drawing took you only thirty seconds! Why did you make me wait a year?" he demanded. Without a word, the master opened up a cabinet, and out fell thousands of drawings - of cats. - Zen story

68. 68 © The Delos Partnership 2004 Benefits 1.Faster response 2.Lower Inventory and Work-in-Process 3.Additional capacity for flexibility 4.Small batches – better response 5.Reduction in all unnecessary activities Lower costs Lower overheads 6.Visual ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

69. 69 © The Delos Partnership 2004 Organisation 1.Fewer levels in organisation 2.Empowerment of workforce 3.Coaches, Team Leaders and Partners 4.Eliminate inspection group 5.Group in cells rather than job-shop 6.Motivate through improvements in agility 7.If schedule achieved, then stop ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

70. 70 © The Delos Partnership 2004 Systems/Tools 1.Six Sigma Process Analysis Design for robustness 2.5 “S” 3.SMED 4.Kanbans 5.Andon ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

71. 71 © The Delos Partnership 2004 Issues Elimination of inspection Experts are on the shop floor Traditional Performance Measures Implemented as an initiative Only seen as a manufacturing project Productivity means fewer people

72. 72 © The Delos Partnership 2004 Solutions 1.Supply Process owner to lead through company 2.Measure Velocity and Lead Time reduction 3.Eliminate traditional performance measures Output Efficiency 4.Recognise expertise from “Shop Floor” 5.Apply ideas throughout company 6.Do not fire in middle of Lean project

73. 73 © The Delos Partnership 2004 Task Force Accuracy Of all Business Data Accuracy Of all Business Data

74. 74 © The Delos Partnership 2004 Manufacturing Task Force #ActivityTargetComplete 1Task Force established with responsibility set up under Manufacturing Director 2Decide on where to use Work to Lists, and where to use Kanban process 3Determine opportunities for re-layout of factory to provide improved flow and ways of working 4Determine Work centre definitions and agree parameters for each work centre for routings 5Establish Demonstrated capacity at each work centre. 6Establish Feedback process for planning, and culture of “No news is good news” 7Establish programme for getting Work-in-Process accuracy

75. 75 © The Delos Partnership 2004 Data Accuracy All data needs to be accurate Bills of Materials Routings Inventory Work Centre Planning Data Customer/Vendor data Project Team Member

76. 76 © The Delos Partnership 2004 Data Accuracy Sub-Teams ? Inventory Bills of Materials Routings Planning Data Customer Data Vendor Data Financial Data

77. 77 © The Delos Partnership 2004 Data Accuracy External Education –Data Accuracy Course –Bill of Material Course –Inventory Accuracy Course Internal Education –Bills of Materials [Quality, Structure and Change Control] –Routings –Inventory –Planning Data –Customer and Vendor Data ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

78. 78 © The Delos Partnership 2004 Task Force Bills of Materials Materials

79. 79 © The Delos Partnership 2004 BOM Task Force Composition Technical Director [chair] Planning Marketing Purchasing Manufacturing Project Team Member

80. 80 © The Delos Partnership 2004 Steps to getting BOM Accuracy 1.Identify how to get to one single Database 2.Assign responsibility for accuracy 3.Check accuracy of sample group 4.Get over emotional issues of part numbers 5.Create BOM policies 6.Get Control group to 100 % 7.Fix Database 8.Implement Change control process 9.Continuously Monitor accuracy ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

81. 81 © The Delos Partnership 2004 BOM Task Force Issues to address Part numbers – non significant Planning Bill and Configuration What goes on the BOM Backflush or not Structure [simplify] Engineering/Product Change Control Link to Design/Development systems Phase in/Phase Out Responsibility ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

82. 82 © The Delos Partnership 2004 BOM Structuring 1.Planning/ Stocking levels 2.Implications on Costing 3.Forecasting issues 4.How to enter orders 5.Master Schedule vs Final Assembly Schedule 6.Product Specifications/Quality Documentation ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

83. 83 © The Delos Partnership 2004 BOM Change Control 1.Establish Formal process for controlling changes to Part Numbers, BOM’s and routes 2.Request for Change 3.Documentation to support changes Engineering change request Engineering change Notice Audit trail of changes 4.Techniques for phasing in/phasing out of materials 5.BOM Change control group to monitor changes ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

84. 84 © The Delos Partnership 2004 Benefits 1.Accurate Costs 2.No duplication 3.Ordering of right product in right quantity 4.Managed introduction of products – less obsolescence 5.Suppliers deliver right product at right time ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

85. 85 © The Delos Partnership 2004 Organisation 1.Responsibility for Add,Amend Delete 2.BOM Administrator 3.BOM Approval Group ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

86. 86 © The Delos Partnership 2004 Systems 1.Can accommodate design/development 2.Phantoms/Pseudos 3.Configuration ability 4.Where used facility 5.Single Level/Multiple level 6.Two level Planning Bill ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

87. 87 © The Delos Partnership 2004 Process for getting Data Right Sample Group Audit Fix Data Base Sample Group

88. 88 © The Delos Partnership 2004 Task Force RoutingsAnd Work Centres RoutingsAnd

89. 89 © The Delos Partnership 2004 Data Quality – Bills of Material #ActivityTargetComplete 1Task Force established with responsibility set up under Development department 2Bill of Material objectives agreed, with Target accuracy of 100 % of all BOM’s 3Sample of current Bills of Material used to verify current level of accuracy of BOM’s 4Bill of Material Policy Established on Accuracy of BOM’s and agreed 5Correction of Database undertaken for the whole database. 6Procedure for reporting of BOM inaccuracy completed and established. 7Process for prompt correction of Bills of Materials within Development department agreed and established. 8Bill of material Administrator role defined and filled within the Planning Deparment

90. 90 © The Delos Partnership 2004 Data Quality – Structure of Bills of Material #ActivityTargetComplete 1Task Force established with responsibility set up under Planning Function 2Structure of BOM’s agreed with reference to the MPS task force and decision on MTS/ATO/MTO 3Software checked to ensure that configuration ability is supported 4Resource identified for restructuring of Bills of Materials. 5Bill of Material Database populated with restructured Bills of materials. 6Restructured Bills of Materials verified for accuracy as part of Bill of Material Quality audit.

91. 91 © The Delos Partnership 2004 Data Quality – Bills of Material Change Control #ActivityTargetComplete 1Task Force established with responsibility set up under Planning Function 2Current change control procedures and policies reviewed for completeness 3Software review of functionality for Change Control completed, and documented 4New Procedures for BOM Change control identified, and established with policies in place for handling phase in and phase out 5New procedures reviewed and agreed through pilot process 6BOM Change control group established to review impact of proposed design and development changes

92. 92 © The Delos Partnership 2004 Routing Task Force Composition Manufacturing Director [chair] Planning Industrial Engineering Manufacturing Finance Project Team Member

93. 93 © The Delos Partnership 2004 Steps to getting Routing Accuracy 1.Identify how to get to one single Database 2.Assign responsibility for accuracy 3.Check accuracy of control group 4.Create Routing and Work Centre policies 5.Get Control group to 100 % 6.Fix Database 7.Implement Strong Change control process 8.Continuously Monitor accuracy ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

94. 94 © The Delos Partnership 2004 Routings Task Force Issues to address –Link to Bills of Materials [delevel BOM’s] –Simplify –Use of Queue –Use of Setup/Move/Run –Accuracy of Standard Times –Correct number of Work Centres –What to include as Work Centres ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

95. 95 © The Delos Partnership 2004 Benefits 1.Improved Capacity Planning 2.More accurate costs 3.Simplified BOM’s 4.Better allocation of capacity and costs ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

96. 96 © The Delos Partnership 2004 Organisation 1.Responsibility for Add,Amend, Delete 2.Routings Administrator 3.Routing and Work Centre group [Combine with BOM group] ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

97. 97 © The Delos Partnership 2004 Systems 1.Provides Q/S-U/Run/Move 2.Aggregation from Work Centres to Cost Centres 3.Work Centre allows for multiple resources per part [e.g machine and labour] ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

98. 98 © The Delos Partnership 2004 Process for getting Data Right Sample Group Audit Fix Data Base Sample Group

99. 99 © The Delos Partnership 2004 Task Force InventoryAndWork-in-ProcessInventoryAndWork-in-Process

100. 100 © The Delos Partnership 2004 Inventory Task Team Composition Warehouse Manager [chair] Stores Supervisors Production manager Purchasing Logistics Planning Project Team Member

101. 101 © The Delos Partnership 2004 Steps to Gaining Inventory Accuracy 1.Establish levels of current accuracy 2.Establish control group to identify causes of errors 3.Review material flows 4.Create Limited Access 5.Define systems and processes 6.Educate users 7.Train users 8.Cycle count 9.Eliminate annual physical 10.Never give up the challenge ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

102. 102 © The Delos Partnership 2004 Inventory Task Team Issues to address Limited access to stores Process flows Backflushing or not Accuracy of equipment Number of locations Cycle counting People in stores Getting rid of the annual physical ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

103. 103 © The Delos Partnership 2004 Cycle Counting 1.Part number cycle counting Random ABC Method 2.Location cycle counting Fixed cycle by location Count what is easy to count Skip large amounts 3.Eliminate Annual physical ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

104. 104 © The Delos Partnership 2004 Benefits 1.Less time spent looking 2.Reliable system 3.Accurate promises to customer 4.Less surprise write-offs 5.Less inventory 6.Planning system can be used ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

105. 105 © The Delos Partnership 2004 Organisation 1.Warehouse Manager responsible for accuracy 2.Stores people responsible for accuracy 3.Supervisors responsible for lineside accuracy 4.Only recognised personnel allowed in stores ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

106. 106 © The Delos Partnership 2004 Systems 1.Multiple Locations 2.Locating system by location and part number 3.System reports Stock Status by part number Stock status by location Transaction history by Part number 4.Backflushing ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

107. 107 © The Delos Partnership 2004 Process for getting Data Right Control Group Audit Fix Data Base Control Group

108. 108 © The Delos Partnership 2004 Data Quality - Inventory #ActivityTargetComplete 1Task Force established with responsibility set up under Warehouse Manager 2Inventory Data Quality objectives agreed, with Target accuracy of 98 % of all items with 0 tolerance 3Process for movement of inventory, and recording of Inventory Transactions completed 4Review of required equipment and technology completed and recommendations accepted 5Control Group cycle counting established, in order to identify errors 6Control Group achieves 100 % 7Policies and Procedures for Inventory process in Stores and Factory agreed and communicated. 8Initialisation of Balances complete 9Systematic Audit established using Process Control cycle counting.

109. 109 © The Delos Partnership 2004 Task Force Item Master and Planning Data Item Master and Planning Data

110. 110 © The Delos Partnership 2004 Planning Data Task Team Composition Operations Director [chair] Manufacturing Purchasing Industrial Engineer Planning Project Team Member

111. 111 © The Delos Partnership 2004 Item Master Data Used in Planning Part number Description Unit of measure Make or buy Lead time Firm Planned Fence Order quantity Minimums and multiples Safety stock Scrap factor Yield factor Engineering drawing number Commodity code Family code Planner/buyer code Customer address and code number Suppliers address and code number All must be accurate And thought through correctly

112. 112 © The Delos Partnership 2004 Planning Data Task Team Issues to address Lead Time consistent with Manufacturing Lead Time Safety Stocks though through and understood Order Quantities set up in line with Manufacturing/Purchasing common- sense. ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

113. 113 © The Delos Partnership 2004 Task Force Finance and Support Task Force Finance and Support Task Force

114. 114 © The Delos Partnership 2004 Task Force Finance Director [chair] Materials Manufacturing Marketing Quality Purchasing Project Team Member

115. 115 © The Delos Partnership 2004 Support Task Force External Education –Top Management Course Internal Education –Financial Planning and Costing –New Performance Measures ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

116. 116 © The Delos Partnership 2004 Finance Design Link Annual Budget to IEP process Costing updated from system Financial planning based on IEP Eliminate unnecessary financial inspection Eliminate Annual physical stock check ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

117. 117 © The Delos Partnership 2004 Benefits Less duplication of data Eliminate wasted time on budget preparation More accurate costs Save time and money on inventory calculation Better base information ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

118. 118 © The Delos Partnership 2004 Finance systems Integration of financial planning with volume planning 36-42 months horizon Costing direct from BOM’s and routings Development of KPI’s from Data Warehouse Simulation ability for what-ifs ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

119. 119 © The Delos Partnership 2004 Finance Task Force #ActivityTargetComplete 1Task Force established with Finance manager as the Task Force Leader 2Establish Costing process based on BOM’s to reflect Standard or Average actual costs 3Determine how Accounts Payable, Accounts Receivable and General Ledger will work 4Develop process for providing Financial Planning process as linked to the IEP process 5Establish how the Budget will be prepared from the ERP system 6Develop reports from the system that will generate Cash Flow reports and simulations

120. 120 © The Delos Partnership 2004 Task Force PerformanceMeasuresPerformanceMeasures

121. 121 © The Delos Partnership 2004 Task Force HR Director [chair] Finance Quality Sales and Marketing Manufacturing Procurement Development Project Team Member

122. 122 © The Delos Partnership 2004 Performance Measures External Education –Performance Measures Internal Education –New Performance Measures ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

123. 123 © The Delos Partnership 2004 New KPI’s 1.Review Strategy 2.Determine key objectives 3.Develop the Delos Seven Measures 4.Assign responsibility 5.Establish root cause analysis 6.Develop Goal Deployment and relationship to Personal Goals ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

124. 124 © The Delos Partnership 2004 Measurement - Basics VISION AND STRATEGY OBJECTIVES TARGETS MILESTONES ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

125. 125 © The Delos Partnership 2004 Link to Organisational Hierarchy Managing Director Directors/Process Owners Managers/Team Leaders Operators/Team members LINK THEM VISION AND STRATEGY OBJECTIVES TARGETS MILESTONES ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

126. 126 © The Delos Partnership 2004 Root Cause Analysis Inaccurate Forecast Inaccurate Forecast People Processes Pessimism/Optimism Lack of Time Lack of Trust Systems Data Lack of Sales Plan NPD Process Lack of Forecasting System Customer EDI System Inaccurate Actual Demand Data Wrong Code ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

127. 127 © The Delos Partnership 2004 Benefits 1.Alignment to strategy 2.Congruent goals 3.Cascaded objectives and targets 4.Focus on operational measures and not results 5.Improved Return on Capital Employed ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

128. 128 © The Delos Partnership 2004 Organisation 1.Develop Process owners 2.Cross functional development of processes 3.Tie measures to personal goals 4.Personal Development plans 5.Teams to develop processes – not functional silos ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

129. 129 © The Delos Partnership 2004 Process Measures Ownership SalesProdTechLogMktg New Product Process NPD Owner Sourcing Process Supply Owner Customer Process Demand Owner NPD Owner Creative Process Business Support – Finance, IT, HR Senior Management Team ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

130. 130 © The Delos Partnership 2004 System 1.Data Warehouse to store Information 2.Create reports direct from system 3.Needs storage of original promise date to customers and suppliers 4.Needs Forecast accuracy reports 5.Needs collection of data on deliveries to customers 6.Visibility of results for suppliers ASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

131. 131 © The Delos Partnership 2004 Measures - Issues 1.Traditional approach 2.Silo management 3.Corporate reporting process 4.Focus on Financial reporting 5.Actual versus budget

132. 132 © The Delos Partnership 2004 Measures - solutions 1.Involve Corporate in development of measurement 2.Develop IEP in place of Annual budget 3.Eliminate many financial reports 4.Develop process ownership

133. 133 © The Delos Partnership 2004 Performance Measures #ActivityTargetComplete 1Task Force established with Finance manager as the Task Force Leader 2Establish Vision, Goal and Objectives together with Targets for achieving the objectives 3Establish how the system will provide Performance measures, and data for problem solving 4Carry out Benchmarking exercise to establish best in class performance for targets 5Layout Process ownership, and responsibility for cascaded sets of measures 6Review current reward structures, and establish new performance measures contained within Personal Development Plans

134. 134 © The Delos Partnership 2004 Task Force PeopleAndCulturePeopleAndCulture

135. 135 © The Delos Partnership 2004 Establish Task Force HR Director [chair] Quality Sales and Marketing Manufacturing Procurement Development Project Team Member

136. 136 © The Delos Partnership 2004 People Values TraditionalNowFuture Process problems Not my jobOwnershipAccountability Management Style SuperviseFacilitator/ Team Leader Coach Working Style IndividualTeamEmpowered Teams Training and Education Non-existentLuxuryNecessity KnowledgeIgnorantUnderstandsExpert Attitude to People LiabilityCostAsset

137. 137 © The Delos Partnership 2004 Challenge Tradition FactorHistoricalNowFuture DeliveryPromiseRequiredNeed SuppliersAdversariesPartnersSeamless QualityAcceptable6 sigmaZero defects ScheduleForgetFollowAdhere InventoryAssetLiabilityZero MaintenanceRemedialPreventEliminated ComplexityNormalReducedEliminated TeamworkRareCIT’sConstant PeopleFollowersThinkersLeaders

138. 138 © The Delos Partnership 2004 Today’s Rewards Managing Director gets bonus if budget profit exceeded Marketing Director gets promoted if he beats profit target and budget Manufacturing Director gets paid if overheads recovered Technical Director gets delighted if complexity achieved Finance Director becomes Group FD if inventory reduced

139. 139 © The Delos Partnership 2004 Tomorrow’s Rewards Based on targets and milestones Based on forward looking objectives Based on constant appraisal Based on throughput not output Need to recognise value of teams Recognises inventory as a liability

140. 140 © The Delos Partnership 2004 Appraisal Process Continual through the S & OP process Should involve 180˚ appraisal and appraisal of peers through honest feedback Requires enhanced people and team skills Give and receive constructive review Requires removal of blame culture Reduced need for the cult of the hero

141. 141 © The Delos Partnership 2004 Link the Appraisal Process to the Strategy Strategy Grow Business Grow Business Increase Market Share Increase Market ShareMeasuresStrategy Grow Business Grow Business Increase Market Share Increase Market ShareMeasures Sales Manager …. …. ….. ….. …... …... Sales Manager …. …. ….. ….. …... …... Planning Manager …. …. ….. ….. …... …... Planning Manager …. …. ….. ….. …... …... R & D Manager …. …. ….. ….. …... …... R & D Manager …. …. ….. ….. …... …... New Product Director …. …. ….. ….. …... …... New Product Director …. …. ….. ….. …... …... Customer Director …. …. ….. ….. …... …... Customer Director …. …. ….. ….. …... …... Supply Director …. …. ….. ….. …... …... Supply Director …. …. ….. ….. …... …...

142. 142 © The Delos Partnership 2004 Goal Deployment Employees Owner Supply Chain Owner Innovation Owner Community Owner Customer Owner Shareholder Owner TARGETS Senior Management Business Support Supply Management Demand Management New Activity Management PERSPECTIVE Process Owners GOALSGOALS Objectives PROCESS

143. 143 © The Delos Partnership 2004 People and culture Have fun !

144. 144 © The Delos Partnership 2004 Key activities MONTHS Activity0-344-789-1111-1415 EducationProject TeamPilotManagersPilotUsers InternalPilotLive IEPDefine ProcessPilotPilot processPilotAdd all familiesPilotLive InnovationDefine ProcessPilotDefine policiesPilotEstablish organisationPilotLive Demand PlanDefine ProcessPilotDefine PoliciesPilotEstablish organisationPilotLive MPSMTS v ATOPilotDefine PoliciesPilotEstablish organisationPilotLive IRA AccuracyControl GroupInitCycle CountingPilotLive BOM AccuracyFind ErrorsFix ErrorsUploadLive BOM StructureDefineRestructure and set up all Bills of MaterialsLive RoutingsFind errorsFix ErrorsLive Planning DataDefineSet upLive PurchasingDevelop Purchasing ToolsPilotEducate all vendorsLive ManufacturingDevelop Lean ManufacturingPilotEstablish across businessLive FinanceDevelop costing and IEP/Budget LinkPilotDevelop costs, Inv and WIP valuesLive Cont ImpDevelop Continuous Improvement toolsPilotEstablish across businessLive SoftwarePT debugPilotCarry out Software modifications and interfacesPilotLive