1. 1 © The Delos Partnership 2003 Integrated Planning Process One set of numbers at all times

2. 2 © The Delos Partnership 2003 Global Strategic Operations Planning Objectives –Get one set of numbers –Resolve imbalances in Demand and Supply of all resources Manufacturing Supply Design Cash –Establish Teamwork –Implement Strategic direction

3. 3 © The Delos Partnership 2003 Customer Relationship Strategy 1.First Decide if you are Make to Stock or Make To Order 2.Then work out the production plans Inventory Production Make To Stock Sales/ Shipments Order Book Sales Orders Production/ Shipments Make To Order

4. 4 © The Delos Partnership 2003 Customer Relationship Strategy Design Purchase Intermediate Manufacture Sub-assemble Finish Distribute Where Do you meet The Customer ? StockTo Order

5. 5 © The Delos Partnership 2003 Make to Order Production = Demand Plan + (Current Order Book - Order Book Target) = 70 + 75 - 50) PRODUCTION ORDER BOOK

6. 6 © The Delos Partnership 2003 GSOP -3-2 Demand Plan20 Actual Demand212224 Difference124 Cum Diff37 Months 123456789 Last Demand Plan20 New Demand Plan Difference Cum Diff Months Q4Q1 60 -3-2 Supply Plan25 Actual Supply201921 Difference-5-6-4 Cum Diff-11-15 123456789 Last Supply Plan25 20 New Supply Plan Difference Cum Diff Q4Q1 60 -3-2 Order Book Plan777267 Actual 82838689 Difference61422 123456789 Last Plan6257 New Plan Difference Q4Q1 57 A500xx Family : Units

7. 7 © The Delos Partnership 2003 Family Summary Major Changes New Product included in Forecast Tender for XYZ market included Major Assumptions New product rates We Win XYZ Tender Maintenance programme completes on time Major Threats Competitor ABC brings in new product sooner Decisions Required Third shift in Quarter 4 Investment of Eur 0.5 m in Additional capacity for New Product

8. 8 © The Delos Partnership 2003 Workshop Review the information in the case study and come up with a revised plan

9. 9 © The Delos Partnership 2003 Rough Cut Capacity Planning Objective –Translate SOP Family Volumes into Capacity Requirement –Test validity of plan against demonstrated capacity How –Use Planning profiles –Use Critical Resources –Use Demonstrated Capacity Result –Possible problem areas

10. 10 © The Delos Partnership 2003 Rough Cut Capacity Planning Required Capacity Demonstrated Capacity Family Volumes x Rate per hour Family Volumes x Rate per hour Actual Production Per month Actual Production Per month Critical Resources

11. 11 © The Delos Partnership 2003 Rough Cut Profile Key Resources UnitsFamilies ABCDEF Forging Supplier Units2442 Machining Hrs121420510 Quality Assurance Hrs3531072 Plating Hrs2516 Assembly Hrs4725 Test Hrs37925 Hours per 000 units

12. 12 © The Delos Partnership 2003 RCCP Planning Result Month 5 Key Resources Required Production VolumesCapacity A 22 B 20 C 35 D 10 E 15 F 15 ReqDemMax Forging Supplier Machining Quality Assurance Plating Assembly Test

13. 13 © The Delos Partnership 2003 RCCP Planning Result Month 5 Key Resources Required Production VolumesCapacity A 22 B 20 C 35 D 10 E 15 F 15 ReqDemMax Forging Supplier 44804030194200300 Machining26449020075150117910001200 Quality Assurance 6610010510010530506500750 Plating401751090315280320 Assembly881407050348500550 Test661403152075616580696

14. 14 © The Delos Partnership 2003 Workshop A Family is the highest level of aggregation that can reasonably give a capacity picture There may be a need to have marketing families and manufacturing families Classify your families

15. 15 © The Delos Partnership 2003 Aggregation Stock Keeping Unit Sub-Family Family £’s

16. 16 © The Delos Partnership 2003 Global SOP Process To gather information an GSOP needs –Formal process for inclusion of data –Time for analysis of information –Discussions to get to conclusions –Timely acquisition of information

17. 17 © The Delos Partnership 2003 Delos Business Model Strategy Prioritisation Changes Vision DemandSupply Support

18. 18 © The Delos Partnership 2003 Integrated Business Planning Week 1Week 2Week 3Week 4 Strategy Prioritisation Changes Vision DemandSupply Support

19. 19 © The Delos Partnership 2003 Strategic Operations Planning ACTIONACTION Week 1Week 2Week 3Week 4 Innovation Review Innovation Review Customer Demand Review Customer Demand Review Supply Plan Review Supply Plan Review Priority Review Priority Review STAGE 1 STAGE 2 Senior Team Review Senior Team Review STAGE 5 STAGE 6 STAGE 4 STAGE 3

20. 20 © The Delos Partnership 2003 Need for Strategic Operations Planning LOCAL/COUNTRY Customer’s Expectations REGIONAL/ SECTOR GLOBAL Manufacturing Economics Research Costs Financing Competition LEVEL 1 LEVEL 2 LEVEL 3 National Government Requirements

21. 21 © The Delos Partnership 2003 Multi-site SOP In a multi-national organisation Each site needs common processes All sites need aggregation –At right level Requirement for common performance measures

22. 22 © The Delos Partnership 2003 Where do the main processes occur ? Innovation Customer Relationships Supply Management Financial Priorities Strategic Review LEVEL 1 Customer/Country/ Market LEVEL 2 Region/Country Grouping/Business Sector LEVEL 3 Region/Global

23. 23 © The Delos Partnership 2003 Multi-Level Strategic Operations Planning Week 1Week 2Week 3Week 4 Demand Planning Demand Planning Demand Planning Demand Planning Demand Planning Customer New Activity Review Innovation Supply Review Supply Review Supply Review Supply Review Financial Priorities Consolidated Recocniliation Financial Priorities Corporate Review Senior Team Review GLOBALLOCALGLOBALLOCAL LEVEL 1 Country/ Market LEVEL 2 Region/ Business Unit LEVEL 3 Europe/ Global HQ

24. 24 © The Delos Partnership 2003 Strategic Operations Planning Summary –One set of numbers –Teamwork –Manages the constant change –Rolling Business Plan –Replaces Budget –Sound basis for decision making