alcatel lucent planning optimization proposal presentation
TRANSCRIPT
Copyright © 2011 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
Accenture Proposal on ASB Supply Chain Planning Optimization(Version: 0725) July 2011
1
Preface – The Context
2
• Accenture is very pleased to have this opportunity to present our observation to the
Supply Chain Planning issue and provide optimization recommendation based on strong
NEP industrial experiences.
• Through the multiple years’ engagement with ASB in critical business solution and the
investigation on ASB’s Supply Chain area (such as ‘high inventory’ issue, FP optimization)
since last November, we deeply understood the key operational issues and respective
impacts to the business outcomes that ASB is facing.
• A systematic Optimization Solution including IT (FP) enhancement and new centralized
planning model is proposed to help ASB overcome the short-term operational issues and
establish ASB own long term efficient and reliable planning capability.
• We believe that the such a planning optimization is an achievable goal under the strong
commitment of entire ASB leadership team and outstanding execution ability of joint team
between ASB and Accenture.
Copyright © 2011 Accenture All Rights Reserved.
Copyright © 2011 Accenture All Rights Reserved.
Table of Contents
Key Findings
Solution Highlight
Delivery Approach
Appendix
3
Integrated Supply Chain Planning Framework
4Copyright © 2011 Accenture All Rights Reserved.
Customer
Telecom
Enterprise
Regional Warehouse
ASB Supplier
EE parts Suppliers
Mech. Parts Suppliers
VMI (Module Components)
Cu
stom
er Po
rtal
Su
pp
lier Po
rtal
• Proc Plan
• Committed Proc Plan
Demand Planning(Forecast
Management)
Long Term Planning
Strategic Procurement
Capacity and MaterialPlanning
Sales and Operation Planning
• Sales Order (with CRD)
• Consolidated FCST
• Annual Plan
• Consensus FCST
• Annual Plan
• Inventory
• Consensus FCST• Sales Order (with desired ETD)• B/S Supply Plan
• Proc Plan for Cell• Inventory and Transaction
(Raw Material/WIP/FG)• Capacity Profile• Sales Order (with ETD)
• Sales Order (with ETD)
• Hub/VMI Inventory
• Committed Proc Plan for Module Components
• Capacity Profile
Order Management
ERP(Transaction data: Inv, PO, SO, WO)
• Planned Order
• Sales-Out• Sales Order (Sell-In)• W/H Inv
• Proc Plan
• Committed Proc Plan• Committed Strategic
Proc. Plan
• Sales Order• Inventory• Committed Proc
Plan for Key/Critical Parts
• Capacity Profile
• Sales-Out• Sales Order (Sell-In)• W/H Inv
• Consensus FCST/AATP
• Annual Plan
• Strategic Proc. Plan
• ATPConfirmation
• ATP
• Strategic Proc. Plan• Strategic
Proc. Plan
• Consensus FCST
• Sales Order
• Inventory
• Sales Order (with desired ETD)
• PO
Master Planning
• S&OP Plan
• Master Production Schedule
• Supply Plan to Suppliers
Product Development
Corporate StrategyAccount
Management
Opportunity Management
• Account Profile/Plan• Collected
Opportunities
• Opportunity volume with win rate
• Market Trend• Tech. Roadmap• Competitor Info.
Fulfillment(ATP)
• Sales Order (with CRD)
• Pickup Date
The Accenture Integrated Supply Chain Planning Framework is adopted to assess ASB’s Supply Chain Planning, focusing on IT System Support, Operating model, Data and People.
Observation on the Key Issues (1/2)
5Copyright © 2011 Accenture All Rights Reserved.
There are several key issues identified and categorized based on the framework:A. Lack of E2E supply chain planning and control mechanismB. Complex planning logic and insufficient analytical functionalityC. Planning staff's skills are insufficientD. Low data quality and weak data governance
* The detailed issue list is provided on the next page.
Copyright © 2011 Accenture All Rights Reserved.
Observation on the Key Issue (2/2)
6
A. Lack of E2E supply chain planning and control mechanism
• Inefficient Planning Control
• Low Delivery Performance
• High Inventory
A1 - Planner lack of visibility of production execution progress
A2 - Overlapped work tasks between Supply Planner and MFG
C2 Trusting manual planning book rather than APS output
D. Low data quality and weak data governance
D1 Aging master data and transactional data result in wrong planning outputs
B. Complex planning logic and insufficient analytical functionality
A4 - Compared with short supply lead time, lower purchase price is more preferred A5 - Production plan was not executed due to lack of demand priority and capacity
C. Planning staff's skills are insufficent
B2 - Planning output has cross-feeding issue
B3 - Low performance and unpredictable system simulation results
C1 Insufficient knowledge to identify issue and trace back
A3 - MOQ (Minimal Order Qty) is not optimized for demand
D2 Lack of management process for data maintenance
B1 - RSP driven purchasing plan causes extra material inflow
B4 - Less accuracy and Issue-tracing function in Inventory Outlook tool
Root Causes List of IssuesOperation Impact
?
Lack of E2E supply chain planning and control mechanism
Low data quality and weak data governance
Complex planning logic and insufficient analytical functionality
Planning staff's skills are insufficient
Improvement Opportunities
Build Up Data Validation Mechanism
Systematic Planner’s Training Plan
Recruit experienced planning staff and Strengthen Training Execution
Analytical Tools to support Planning and Execution Monitoring
Planning Logic Optimization for RSP, Capacity Plan
Empowered (Planning) Team with required broader responsibilities for centrally planning and control
Daily System Operation Discipline and Audit
7Copyright © 2011 Accenture All Rights Reserved.
Factory Planning System Assessment and Simplification
Identified Improvement Opportunity
Root Causes
H
H
H
H
H
M
H
H
Executed by Joint Team Executed By ASBLegend
Considering the execution sequence of the improvement opportunities and the executor of each opportunity, the opportunities are grouped as ‘High’ and ‘Medium’ Priority.
Copyright © 2011 Accenture All Rights Reserved.
Table of Contents
Key Findings
Solution Highlight
Delivery Approach
Appendix
8
Solution Map for Supply Chain Planning Optimization
9Copyright © 2011 Accenture All Rights Reserved.
Biz Requirements
are firmed
10Copyright © 2011 Accenture All Rights Reserved.
From To RSP drives Purchasing Plan ASP drives Purchasing Plan
Optimize Planning Logics – ASP drives Material Planning and Purchasing Execution (1/2)
Benefits of having Purchasing Plan based on ASP include1) Better synchronized material purchasing with semi-FG /FG production 2) Reduced risk for high inventory of material due to delay or shortage of some material (To-be-Reserved/To-be-
Available)
Corresponding change will be needed in the planning calendar: Procurement planning will be based on the ASP from DSB meeting.
11Copyright © 2011 Accenture All Rights Reserved.
Leading Practice
S&OP team Factories Sales Procurement
Optimize Planning Logics – ASP drives Material Planning and Purchasing Execution (2/2)
12Copyright © 2011 Accenture All Rights Reserved.
Cross-Feeds issues in FP were caused mainly by the conflict between priority and due date of demand orders. FP default function only can mitigate the conflict, unless by simplifying the priority or assigning material by due date only.
Optimize Planning Logics – Material Supply Logic Assessment: Cross-Feeds Issues
Planning Function Enhancement - Capacity Planning: A Complete FP Planning Cycle
13Copyright © 2011 Accenture All Rights Reserved.
2. Infinite Capacity, Finite Material Plan
3. Material Resolution:− add/delete receipts− expedite material arrival
4. Finite Capacity Balancing:− automated algorithms− manual procedures:
schedule over time, offload to alternates move work in time
6. Save Finite Material & Capacity Plan
5. Finite Scheduling− Automated algorithms− manual scheduling
1. Data Download
7. Preserve Plan and Upload Data
Planner Solve Planning Issues
SAP
A complete planning cycle includes finite material plan and capacity balancing. The most important is for Planner to Solve the Planning Issues in each stage with sufficient planning knowledge and familiarity with FP planning logic and UI.
14Copyright © 2011 Accenture All Rights Reserved.
Key work center planning method compares requirements to the available capacity at key work centers. It attempts to balance workloads broadly. In ASB, Accenture suggests that ASB only considers the constraints of critical equipment1.
Work Center 1 Work Center 2 Work Center 3 Work Center N…Routing Model for Detailed Capacity Model
Constraint of Critical EquipmentRouting Model for Key Work Center
1. One of the definition of critical equipment could be the capacity difficult to increase in 1-2 month.
Model Pros Cons
Key Work Center
1. Provide a feasible plan with capacity constraint2. Balance workloads broadly and prepare material in
consumption level3. Maintain routing data with limited efforts4. Easy to understand the planning results
1. Didn’t consider over all work centers’ situation in factory
FP Capacity Model
1. Capacity plan is detail to each work center2. Arrange over time by each work center
1. Huge efforts to maintain planning parameter for each work center
2. Difficult to explain planning result s
Planning Function Enhancement - Capacity Planning: Using Key Work Center Instead of FP Detailed Capacity Model
To Solve the Data Quality Issue, ASB need to reinforce Business Discipline and Set up Data Validation Mechanism including Process and Cross Function Team. Project team will identify Data Owners, Data Validation Process for planning related data objects .
Copyright © 2011 Accenture All Rights Reserved. 15
Business Data Generation/Updates
Business Discipline
Data Validation Process
Master data: • Purchase lead time,• Production lead timeTransactional data• Purchase order, • Sales order, • Production order
Data Quality and Competence Enhancement - Data Validation Process
16Copyright © 2011 Accenture All Rights Reserved.
A holistic user training Plan will be tailored and applied with focus on Planning team experience and skill, especially the system related skills and Planning Issue troubleshooting skills.
Time
Skill
sD
egre
e of
Spe
cific
trai
ning
con
tent
PlanningIntroduction
Process
System
Basic Supply Chain, planning knowledge training
Process level training specific to a planning function or planning cycle
Complex Scenario based training,/workshop, Leading Practice and soft skill trainings.
Tier 1 Tier 2 Tier 4
Concept focus Issue Solving FocusProcess focus
Main Responsibilities:- Create and evolve planning models- Analyse root cause for SC
performance issuesRequired skills:- Statistics- Planning- Data analysis- Coordination
Planning
Illustration
AdvancedTraining/Workshop
Transactional training of system, including master data setup, system calculation logic, data analysis and operation
System focus
Tier 3
Data Quality and Competence Enhancement - Training Plan for Planners
Solution Map for Supply Chain Planning Optimization
17Copyright © 2011 Accenture All Rights Reserved.
Preliminary Thoughts Based on Best Practice and ASB’s Issue
A. Lack of E2E supply chain planning and control mechanism
• Inefficient Planning Control
• Low Delivery Performance
• High Inventory
A1 - Planner lack of visibility of production execution progress
A2 - Overlapped work tasks between Supply Planner and MFG
C2 Trust manual planning book rather than APS output
D. Low data quality and weak data governance
D1 Aging master data and transactional data result in wrong planning outputs.
B. Complex planning logic and insufficient analytical functionality
A4 - Compared with short supply lead time, Lower purchase price is more preferred A5 - Production plan was not executed due to lack of demand priority and capacity
C. Planning staff's skills are insufficient
B2 - Planning output has cross-feeding issue
B3 - Low performance and unpredictable system simulation results
C1 Insufficient knowledge to identify issue and trace back
A3 - MOQ (Minimal Order Qty) is not optimized for demand
D2 Lack of Management Process for Data Maintenance
B1 - RSP driven Purchasing plan cause extra material inflow
B4 - Less Accuracy and Issue-tracing function in Inventory Outlook tool
Copyright © 2011 Accenture All Rights Reserved.
Issue to Address by “Control Tower”
Root Causes The List of IssuesOperation Impact
18
19Copyright © 2011 Accenture All Rights Reserved.
• SPD currently has no control on Production: Launch Plan is not followed
• SPD doesn’t have visibility of Production Order status
Control Tower is introduced to build in the right control on production!
A Reflection of the Issue- Weak Interlock between Supply Planning and Production
20
Establish a “Control Tower” - Framework
20
Focus on Production Execution based on certain SLA (e.g., production lead-time vs. actual load) Accept/commit MOs according to agreed production lead-timeConduct detailed production scheduling to fulfill MOs as
committed, considering priority set by Control Tower
• Convert PR into PO, approve the PO and place to supplier ASAP
• Monitor PO status and push for delivery on time
Aimed to deliver the goods when it is needed (to reduce inventory) and faster
Centrally coordinate supply planning and execution processes for all products, mainly by…• Having accurate and real time visibility for supply chain data/information• Driving for one feasible supply plan via effective DSB, with both material/capacity availability• Coordinating purchasing and production to realize the supply plan and managing inventory
20
Coordination Mechanism to strengthen Interlock, which is enabled by…• Process steps and communication structure• Key Check Point, regular/event-driven review and decision-making cycle• R&R, KPIs, Regulation and escalation rule• Visibility of info and analytics required (e.g., capacity availability and load status)
Establish a “Control Tower” - Coordination Mechanism
21
Illustration
Copyright © 2011 Accenture All Rights Reserved.
22Copyright © 2011 Accenture All Rights Reserved.
Deliverables for Process/Business Rule related to “Control Tower” will consist of follows:• Process Overview/Walk through (detail
activity/timing/business rule)• Process Swimlane and Activity Description
Process Swimlane and Activity Description
Key Activities, Inputs/Outputs of “Control Tower”
Process Overview/Walk through
Illustration
Illustration
Key Activities:• Generate one supply plan, aligned across BDs (DP/SPD/MML/IPL) and
modify the plan based on the latest supply/demand picture• Coordinate Material Purchasing and Semi-FG/FG Manufacturing activities
by controlling POs/MOs, and monitor status of PO/MO/Inventory, and make adjustment
• Organize regular meeting to review Inventory , demand vs. supply situation and delivery performance, and define/execute improvement actions
Inputs• Supply: Stock of raw material and Semi-FG, PO status and WIP of Semi-
FG/FG, capacity• Demand: SOs, Demand Forecast, other indication regarding customer
demand/ordering behavior, buffer stock target, customer change requestOutputs• Supply plan, Material Requirement Plan, Call-off (POs/MOs), modification
to POs/MOs/Supply Plan, improvement actions regarding excess/aging stock
Leading Practice
Establish a “Control Tower” - Process & Business Rule
23Copyright © 2011 Accenture All Rights Reserved.
A KPI “Tree” will be developed as below illustration to ensure that Performance expectations be in sync, and related functions (i.e. SPD, IPL Manufacturing, MML) share accountability to meet those goals.
• Collection of KPI as-is definitions incl. calculation Logics, reference period, legacy system, data availability
• Review as-is KPIs and define to-be KPIs in a form of KPI tree, either by reassigning as-is, or introducing new ones. Description of KPI to-be definitions incl. calculation logics, reference period, and setup the KPI Tree → First draft
• Discussion and review of to-be definitions with business responsible persons → Second draft
• Verification of discrepancies and review with responsible persons and experts in the business areas
Illustration
Approach Key Deliverables• KPIs
– DR/DP/CLIP/RLIP– Order Lead-time– Production Throughput Time– Production adherence to Schedule– Inventory Turnover/Stock Reach– Aging Stock/Blocked Stock
• KPI “Tree”
• KPI calculation logic
Illustration
StartPOD
available ?Yes
No
No
WithinDelivery
window ?
PGI + ETZ =KTU
Pull in fromKTU ? 0 %
100 %
Yes LTE2=1 LTE3=0
WithinDelivery
window ?
Yes LTE2=1 LTE3=0
Pull in fromKTU ?
Yes LTE2=0 LTE3=1
IsPGI >=WT
?
NoNo0 %
End
No
POD = KTU?
100 %Yes
LTE2=1LTE3=0
Yes LTE2=1 LTE3=0
End
End
WithinDelivery
Window ?
Yes LTE2=0 LTE3=1
Incoterms =DDU/DDP ?
No
Yes
PGI = ATU?
Yes LTE2=1 LTE3=0
No
No
No
LTE2=0LTE3=0
No
LTE2=0LTE3=0
Credit LimitReleased
Date Check
Yes
NoWithin
Deliverywindow ?
Yes LTE2=1 LTE3=0
No
IsPGI >= WT
?
Yes LTE2=0 LTE3=1
Yes
No
Illustration
Establish a “Control Tower” - KPIs
Based on the business process solution design, IT requirements can be defined, which may include the following aspects:• Real time access to information needed for “Control Tower” to fulfill the coordination
responsibility (SAP R3/APS-FP)– PO/MO status, and delay report– Material shortage list– Inventory status and outlook– Purchasing Lead-time and Manufacturing Lead-time
• Timely analytical report or dashboard which may provide…– Insight about supply planning and execution key performance– Monitor mechanism with alert functionality, e.g., report indicating where there is or would
have an issue if nothing be done
Below deliverable will be carried out after the IT functional requirements are defined:• To-be IT requirement list• Fit & Gap analysis versus As-is IT capability• Business Requirement for IT system
24Copyright © 2011 Accenture All Rights Reserved.
Establish a “Control Tower” - IT Requirement Analysis
A1 - Planner lack of visibility of production execution progress
A2 - Overlapped work tasks between Supply Planner and MFG
C2 Trust manual planning book rather than APS output
D1 Aging master data and transactional data result in wrong planning outputs.
A4 - Compared with short supply lead time, Lower purchase price is more preferred
A5 - Production plan was not executed due to lack of demand priority and capacity
B2 - Planning output has cross-feeding issue
B3 - Low performance and unpredictable system simulation results
C1 Insufficient knowledge to identify issue and trace back
A3 - MOQ (minimal order qty) is not optimized for demand
D2 Lack of Management Process for Data Maintenance
B1 - RSP driven Purchasing plan cause extra material inflow
B4 - Less Accuracy and Issue-tracing function in Inventory Outlook tool
A. Lack of E2E supply chain planning and control mechanism
D. Low data quality and weak data governance
B. Complex planning logic and insufficient analytical functionality
C. Planning staff's skills are inadequate
Copyright © 2011 Accenture All Rights Reserved.
Solution Coverage Summary
Y
Y
Y
P
P
Y
Y
P
P
P
Y
Y
Y
Y N PFully Covered Not covered Partially covered
25
Copyright © 2011 Accenture All Rights Reserved.
Table of Contents
Key Findings
Solution Highlight
Delivery Approach
Appendix
26
Copyright © 2011 Accenture All Rights Reserved.
Tailored Work Approach
27Phase I Phase II
By considering the principle of ‘quick launch’ and dependency with overall operation direction, Accenture suggests a steady working approach to achieve the phased objectives: • Phase I, completed within 15 weeks, mainly focusing on FP enhancement and the ‘One Control Tower’ Design • Phase II, following Phase I, mainly focusing on the deployment of the ‘Control Tower’ to the operational environment. The deployment could be in multiple waves, starting from 2 Product Lines, e.g. Optics, Wireline.
28
The Accenture Management Consulting Difference
Copyright © 2010 Accenture All Rights Reserved.
For any inquiries or comments on this proposal, Please contact [email protected].
Thank you!
Copyright © 2011 Accenture All Rights Reserved.
Table of Contents
Key Findings
Solution Highlight
Delivery Approach
Appendix
29
30Copyright © 2011 Accenture All Rights Reserved.
Accenture China Introduction (1/3)Overview
Beijing
Shanghai
Taipei
Hong Kong
Dalian
Guangzhou
Chengdu
• Accenture has been a key player in the Greater China market for 20 years.
• We have about 5,000 professionals working in offices in 7 cities.
• We provide full range of services – Consulting, Technology and Outsourcing.
• Our business is growing at CAGR ~30% since beginning of 2000.
• We serve clients across all our industry segments in and from China.
• Our CEO is the sponsor of our business and is personally and actively involved.
31Copyright © 2011 Accenture All Rights Reserved.
Accenture China Introduction (2/3)Operating Model
FinancialServices
Health & Public Service
Products ResourcesCommunications & High Tech
Strategy
Customer Relationship Management
Finance & Performance Management
Supply Chain Management
Process & Innovation Performance
Marketing Science
Talent & Organization Performance
Change Management
Risk Management
Service Management
Sustainability
Service Oriented Architecture
Network Technology
Data Center Technology & Operations
Portals and Content Management
Security Solutions
Software as a Service (SAAS)
Application Renewal
Enterprise Architecture
Information Management
Infrastructure Solutions
IT Strategy and Transformation
Microsoft/SAP/Oracle Solutions
Performance Engineering
Business Process Outsourcing
Application Outsourcing
Technology Infrastructure Outsourcing
Management consulting
Technology
Outsourcing
We conduct business through five industry-focused operating groups. Our three growth platforms underpin emphasis on high-performance business.
32Copyright © 2011 Accenture All Rights Reserved.
Accenture China Introduction (3/3)Key Facts of C&HT China / APAC
• Partnering with ASB since 2006 and proven in delivering the promise on time with high quality.
- Delivery Excellence based in China serving on a global scale.- “A dedicated global network” providing a unique Business & IS integrated skills set, and
consistent delivery quality and competitive cost.- Deep Understanding of Alcatel-Lucent core business critical application.
• Selected C&HT Clients – Over 50% of our current clients have been clients for the past 3 years;– All of the telecom operators in China are clients of Accenture. Some are also ALU’s clients in
China and APAC.
33Copyright © 2011 Accenture All Rights Reserved.
Backup Slides
Supply Chain Planning Building Blocks and System Mapping
34Copyright © 2011 Accenture All Rights Reserved.
Firewall
Supply Chain Planning
Quotes and Orders
PP & MRPMES EMSPP & MRP
MESPP & MRP
MES
Requests
Promises
ProductionPlan
PrioritizedDemand
Enterprise:Allocation RulesBusiness ObjectivesModeling What-If Scenarios
Individual Site:Business ObjectivesParametersConstraints
Demand Planning
DemandCollaborationCustomer
Enterprise Planning
Site Planning
RequestedForecast
RequestedOrder
CommittedForecast
ATP/AATPQuantity
DemandFulfillment ERP
eSupply
A specify planning system only covers part of function(s) in supply planning. Most of time Kinaxis RR will play the role in the Enterprise Planning Level where is similar with i2-MP.
Supply Chain Planning Building Blocks and System Mapping
35Copyright © 2011 Accenture All Rights Reserved.
Firewall
Supply Chain Planning
Quotes and Orders
PP & MRPMES EMSPP & MRP
MESPP & MRP
MES
Requests
Promises
ProductionPlan
PrioritizedDemand
Enterprise:Allocation RulesBusiness ObjectivesModeling What-If Scenarios
Individual Site:Business ObjectivesParametersConstraints
Demand Planning
DemandCollaborationCustomer
Enterprise Planning
Site Planning
RequestedForecast
RequestedOrder
CommittedForecast
ATP/AATPQuantity
DemandFulfillment ERP
eSupply
i2-DM
i2-MP
i2-FP
i2-OP
A specify planning system only covers part of function(s) in supply planning. Most of time Kinaxis RR will play the role in the Enterprise Planning Level where is similar with i2-MP.
Supply Chain Planning Building Blocks and System Mapping
36Copyright © 2011 Accenture All Rights Reserved.
Firewall
Supply Chain Planning
Quotes and Orders
PP & MRPMES EMSPP & MRP
MESPP & MRP
MES
Requests
Promises
ProductionPlan
PrioritizedDemand
Enterprise:Allocation RulesBusiness ObjectivesModeling What-If Scenarios
Individual Site:Business ObjectivesParametersConstraints
Demand Planning
DemandCollaborationCustomer
Enterprise Planning
Site Planning
RequestedForecast
RequestedOrder
CommittedForecast
ATP/AATPQuantity
DemandFulfillment ERP
eSupply
i2-DM
i2-MP
i2-FP
i2-OP
A specify planning system only covers part of function(s) in supply planning. Most of time Kinaxis RR will play the role in the Enterprise Planning Level where is similar with i2-MP.
Kinaxis RR Covers
37Copyright © 2011 Accenture All Rights Reserved.
Control Tower
Production
Material Stock Semi-FG/FG Stock
Inputs to Production • Production Launch Plan
(Production Orders)• Priority• Corrective Actions
Feedback• Production Capacity
Availability• Production Order Status
Report• Delay Report/Recovery
Plan
Measure/Track/Review/Act (Escalate if needed)
Coordination Mechanism to strengthen Interlock between Planning and Production, which is enabled by…• Detailed process steps and communication structure• Key Check Point, regular/event-driven review and decision-making cycle• KPIs, R&R, Regulation and escalation rule• Visibility of info and analytics required
Establish a “Control Tower” - Detailed Rule of Coordination Mechanism
Establish a “Control Tower” - Major Changes
From… To…
Decentralized coordination and weak interlocks
Centralized coordination and strengthened interlocks
38
As-is
Supply Planning
Semi-FG/FG Manufacturing
Material Purchasing
Weak Interlock: • Production launch Plan not
followed due to…– No enough production
capacity– Missing materials
caused by double counting
– Plan not reflecting real demand priority
• Production order status in MES not linked to SAP
Weak Interlock:• Late in conversion of PR
to PO for missing vendor quota info.
• Inaccurate material availability info. in the system, due to, e.g., material double booked for production orders
• High MOQ vs. actual usage
• Focus on material availability check, which is manually done
• Create production launch plan based on FP run, but w/o– Doing capacity availability check– Knowing actual demand priority
• Schedule production according to real material and capacity availability
• Consider the actual priority of sales orders
• Sometimes do their only planning
• Handle POs w/o considering the demand priority• Convert PR to PO, but not proactively clean up
pending PR• Record PO status in the system, but no specific
actions improving quality of material availability info.
39
To-be
Control Tower
Semi-FG/FG Manufacturing
Material Purchasing
Strengthened Interlock: • Executable Production Launch
Plan (PLP), as already balanced w/ both material /capacity availability, as well as actual demand priority
• Install additional coordination mechanism to PLP release,
• Control Tower drive for corrective actions based on timely feedback of MOs status
Strengthened Interlock:Add additional coordination mechanism to ensure• Smooth and fast process
from PR, to PO approve/ issue
• Accurate/reliable material availability info. in the system
• Timely actions on delayed material and cancel/pull-in/ push-out request
Centrally coordinate supply planning and execution over E2E processes for all IPL products• Driving for one aligned and feasible supply plan via effective DSB meeting,
considering both material/capacity constraints• Synchronizing material purchasing and Semi-FG/FG production to realize
the supply plan and manage inventory at each stage, by controlling the release of PR/MO (based on actual demand priority)
• Accept/commit MOs according to agreed production lead-time
• Conduct detailed production scheduling to fulfill MOs as committed, considering priority set by Control Tower
• Convert PR into PO, approve the PO and place to supplier ASAP
• Monitor PO status and push for delivery on time
40
Credential – Demand Planning Optimization
Copyright © 2010 Accenture All Rights Reserved.
• A global design and manufacturing partner for the telecommunications and electronics industries based in Finland but acquired by Taiwan-based Liteon in 2007. Its service offering covers the whole product lifecycle from industrial design to manufacturing and logistics. The client has operation in 12 countries while the 2 manufacturing sites in China (Beijing and Guangzhou) are becoming the biggest revenue contributor.
• The client strives to win more business share from the critical customer, through increasing the global operation performance. Hence the top management sets the two major goals, to increase the service performance and to reduce the cost. The implementation of Lean Manufacturing Program identified an urgent need to standardize & improve the Demand Planning process to further cut DOS (Days of Supply) and at the same time improve customer service level.
• Following the lean manufacture program, Accenture extended the engagement to laid out and execute the demand planning optimization program :
• DP Assessment and key findings analysis
• Unplanned and/or irregular customer demands have a dramatic effect on the client’s operations and inventory
• An Excel based tool (DP Tool) has been designed and implemented for demand leveling based on volatile demand patterns with various strategies
• Encourage mutual benefits across the Supply Chain – Customer/Supplier Collaboration. Forecast performance monitoring tool has been implemented to support “fact based” discussion in the regular collaboration meeting and KPI / collaboration process defined
• Through this Demand Planning Optimization program, the client has established sustainable plant Demand Planning competence:
• Established the foundation for “Maximize revenue” through capacity optimization mechanism
• Enabled capability to level demand and reduced impact of poor quality demand data on client production and F/G inventory
• Established regular fact-based communications with customers to address mutual issues, build trust, and take corrective and preventative actions
• Improved visibility to the impact of demand change
• Financial benefit to client
• F/G Inventory level of target 3 projects ( contributed 70% of total MGZ F/G value) decreased 30% in 10 weeks supported by DP control with strong sales.
Business Situation
How Accenture Helped Key Business Benefits
41
Credential – Supply Planning Optimization
Copyright © 2010 Accenture All Rights Reserved.
• The client’s as-is supply chain planning is not integrated and is facing various challenges to balance overall demand and supply, keep lowest inventory cost and support business increase.
• GZ and SH plants get different sales forecast, also SH plant only use SH DC inventory to consume whole country’s forecast.
• Sales forecast is generated manually only at SKU level. No clear safety stock & inventory policy in Beijing & Chengdu DC
• Requirement buffer added not only sales forecast but also production plan
• No distribution plan to trigger the replenishment to DC inventory
Business Challenge
• Demand Management:
• Formalize forecast generation process
• Support Pre-S&OP and S&OP meeting to get consensus forecast
• Support finance Sales Forecast ($ value) provided to US
• Supply Planning Optimization:
• Generate MPS automatically by using MPS lite tool to leverage forecast in demand planning initiative
• Leverage MRP Functionality in MISys to automatically calculate raw material requirement
• Provide data maintenance requirement to end users
• Unify forecast source in GZ and SH plants to avoid excess demand to operation
• Use simple statistic forecast algorithm plus sales gain & loss input by forecast tool to align different requirement between sales (national view) and operation (Location view)
• Plan the transportation replenishment by locations & production source at one planning action
• Upgrade Material Manager & planner’s role from data calculation to Exception Management
How Accenture Helped Key Business Benefits
42
Credential – Inventory Optimization
Copyright © 2010 Accenture All Rights Reserved.
• A leading consumer electronics product manufacturer. Its costs were not competitively reduced due to lack of sourcing strategies for key direct materials components; procurement operation effectiveness and efficiency control/monitoring was needed.
• Fragmented supply base and lack of cross-project communications averts buyer power leveraging, sub-optimizing supplier competitive mix and cost structure.
• Lack of communications between R&D/Project Management and Procurement generates mis-alignment between product requirements and individual component specifications.
• The value of As-Is inventory level has 50B NTD in total.
Business Challenge
• Accenture is engaged to executed and managed the 7 step strategic sourcing methodology, integrating Procurement, As-Is Inventory Analysis and reduction execution, R&D and Project Management, to develop sourcing strategies for 4 direct material key commodities.
• Developed commodity design guidelines with R&D and Project Management to identify product differentiation costs and component usage by specifications
• Identified market intelligence and conducted key spend data analysis to aggregate buyer power in order to support fact-based negotiations with suppliers.
• A 10 weeks inventory assessment and quick optimization is executed.
• Achieved 10%+ in cost savings from baseline costs, discounted by calculated market adjustment for 4 direct material key commodities (LCD, Connectors, SDRAM components, and DC/DC converters). Annual savings of >$US10m
• Estimated 2004 component roadmap and volume usage by specifications for fact-based negotiations.
• Successfully conducted 15+ supplier negotiations using fact-based negotiations package, utilizing “hot buttons” to achieve Maximum Supportable Solution (MSS) for almost all of the suppliers.
• The inventory has reduced to 32B NTD and is well-maintained around this level through the optimized process design in this project.
How Accenture Helped Key Business Benefits
43
Establish a “Control Tower” - Scope Coverage
44Copyright © 2011 Accenture All Rights Reserved.
• S&OP vs. MPS and Material Planning• Supply Planning vs. Material Purchasing• Supply Planning vs. Manufacturing• Material Purchasing vs. Manufacturing
Interlock Between Planning/Execution Stages
•APS-FP, Including Inventory Outlook function resided in SDB
•SAP R/3
IT Applications
•SPD•DP
•DSL : Global DP•Other : Local DP
•MML•IPL
Operation Unit
•Optics•Wireless•Wireline
Product Line
Copyright © 2011 Accenture All Rights Reserved.
Review Planning Output
Planning Problem Analysis
Simulation & Corrective action
Inventory Outlook Review
Issue Trace Down & Cause Analysis
Taken Corrective action
Correction Action Follow up
Correction Action Monitoring
The preliminary direction to reform the ‘Inventory Outlook’:
•Actively present visibility of To-Be inventory and trigger proactive actions in Inventory Controlling.
•Continuously Support the Corrective actions initiated by planning and Inventory Review Meetings.
•Review and Improve the existing inventory data accuracy source, refine the functionality as needed. .
SDB
inventory roadmap-MRD
0
10
20
30
40
50
60
70
80
W752 W802 W804 W806 W808 W810 W812 W814 W816 W818 W820 W822 W824 W826 W828
ME
PR_be_Consumed
PR_be_Reserved
PR_Available
PR_Need_Cancel
PO_be_Consumed
Inventory_be_Consumed
PO_be_Reserved
Inventory_be_Reserved
PO_Need_Cancel
Inventory_Extra
PO_Available
Inventory_Available
Establish a “Control Tower” - IT Requirement Analysis (2/3)
Control Tower
Key Features to be considered: Inventory Outlook for all materials Highlight of materials ‘to be Reserved’ , ‘to be
Available’ and ‘to be Extra’ Correlation Analysis
45
We will bring an experienced team with the right skills and work collaboratively with ASB to create a strong project governance structure
Copyright © 2011 Accenture All Rights Reserved. 46
* The resumes of key project delivery team are attached in the appendix for the further evaluation.
Business Design / Pilot SupportTraining / Data Validation
/Pilot
Project Management
• Kang Yi (ACN) – Business Analyst • Kelvin Cao ACN) – Business Analyst • Ella Hu (ACN) – Business Analyst• XXX (ACN) – Business Analyst• TBD (ASB) - Members from OP SPD• TBD (ASB) - Members from CIO \ BPR
Team
• Laura Li (ACN) – Change Management• TBD (ASB) - Members from CIO
• Lin Yu (ASB) – Business PM• Li Peng (ASB) – Technical PM• Kang Yi (ACN) – Business PM
Accenture SME Team• Kevin Lin (ACN) – Supply Chain• August Lin (ACN) – Supply Chain Planning
Steering Committee• XXX (OP)• Swee-Soong Yu (ASB CIO)
FP Enhancement
• Laura Li (ACN) –Data Management• XXX (ACN) – FP Functional Consultant• Chris Liu (ACN) – FP Integration Consultant• XXX (ACN) – FP Developer #1• XXX (ACN) – FP Developer #2 • XXX (ASB) – FP Internal Consultant
ASB Core TeamThe directors from • Quality and Process (Chen Wen Jie) • CIO (Liu Xin-xin, Zhao Yi)
• Yu Hongbiao (ACN)
Accenture Resources Summary: 1 FTE BPM / Business Solution Lead 1 FTE TPM / Technical Solution Lead 3 FTEs for Business Analyst 1 FTE for FP Functional Consultant 2 FTEs for FP Integration Consultant ?? FTEs for SAP Consultant
Total of Resources – 8 FTEs
Communication & Change ManagementGather
Stakeholder Expectations
Change Planning Stakeholder Engagement / Launch Tailored-Communication
Project Management
Progress Control / Governance / Risk & Issue Resolution
Post-DeploymentDeployment ExecutionDeployment Preparation
Develop Execution
Plan
Execute Deployment PlanManage Deployment Capability
Conduct Staging Rollout
Conduct Pilots
Deployment/ Operations Support
Fine-tune Solution/Plan for Subsequent Deployment Assess and
Confirm Deployment
SolutionAssess
Readiness
Monitor/ Value
Realization
Launch Training/ Coaching
Transition DeployedSolution
Co
nfi
rm D
eplo
ymen
t R
ead
ines
s
Au
tho
rize
Dep
loym
ent
Pla
n f
or
Dep
loym
ent
Establish Capability
Business Deployment Framework
47
Establish a “Control Tower” - Major Change in Operating Model
48Copyright © 2011 Accenture All Rights Reserved.
From… To…
• Material Planning/Production Launch Plan without Capacity Constraint
• Material Planning and Production Planning (with Capacity Constraint)
• Dedicated team to provide Analytic support
• Centrally coordination • Manage Inventory
• Production Dept does their own Production Plan
• No Visibility of Production
Illustrative ONLY
Illustrative ONLY