s&op process in practice, sky
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S&OP process in practice
19 October 2012, Supply Chain
2 S&OP a t Sky Germany 19 October 2012
Agenda
1 General information on Sky Deutschland
2 Sky Supply Chain
3 Receiver Procurement
4 S&OP Process at Sky
5 Case Study – Avoidance of stock out
6 Lessons learned
3 S&OP a t Sky Germany 19 October 2012
Agenda
1 General information on Sky Deutschland
2 Sky Supply Chain
3 Receiver Procurement
4 S&OP Process at Sky
5 Case Study – Avoidance of stock out
6 Lessons learned
4 S&OP a t Sky Germany 19 October 2012
Sky Germany is the Pay TV leader in Germany & Austria
• 3,132m subscribers (Q2 2012)
• Exclusive broadcasting rights: live football, live sports, films and the best entertainment
• More than 70 channels
• Market-leading HD offering with 58 HD channels, expanding to more than 60 in 2012
• Differentiation through innovation: Sky+, Sky Go, Sky Anytime, Sky Guide, Sky 3D
• Sky content available via satellite, cable, internet and mobile devices with access to almost every household in Germany and Austria
1
5 S&OP a t Sky Germany 19 October 2012
Sky is cons tantly growing with a 1 s t pos itive Ebitda in Q2 20121
294,0 303,6282,2
Q2 2012
299,7
Q2 2009 Q2 2011Q2 2010
-47,4
Q2 2011Q2 2010
23,0
-23,4
Q2 2009
-63,4
Q2 2012
Q2 2012
326,7
Q2 2011
276,3
Q2 2010
235,8
Q2 2009
230,6
Revenues in €m
Costs in €m
Ebitda in €m
6 S&OP a t Sky Germany 19 October 2012
Sky cus tomer base is cons tantly increas ing based on acce le ra ting Sky+ leve ls and decreas ing churn ra tes from 21 % to currently 10 %1
400
5
10
15
20600
500
400
300
200
100
0
Q2 12
584
Q2 11
116
Q2 10
5
Q2 09
19
109
16
21
0
5
10
15
20
2525
20
15
10
5
0
Q2 12
12
Q2 11
12
Q2 10
20
Q2 09
22
Sky+ Customer in kSky+ penetration in %
Churn rate in kChurn rate in %
Cus tomer base in k
Q2 12
3.132
Q2 11
2.759
Q2 10
2.476
Q2 09
2.364
7 S&OP a t Sky Germany 19 October 2012
Agenda
1 General information on Sky Deutschland
2 Sky Supply Chain
3 Receiver Procurement
4 S&OP Process at Sky
5 Case Study – Avoidance of stock out
6 Lessons learned
8 S&OP a t Sky Germany 19 October 2012
The Sky Supply Cha in respons ibilitie s a re built on the SCOR process
Text
PLAN & CONTROL
SOURCE MAKE DELIVERRETURN &
REPAIRENABLE & MONITOR
SERVICE
Process & IT unit focusing on all
hardware related processes
2
9 S&OP a t Sky Germany 19 October 2012
Supply Chain Organiza tion with s trong focus on SCOR process
Supply Cha in
Supply Cha inManagement
Supply Cha in Services
Fie ld ServiceS tra tegic Sourcing
Supply & DemandManagement
3 rd Pa rtyManagement
Pe rformanceManagement
S & OP
Budge t & Cos tManagement
Ma te ria l P lanning
Mate ria lP lanning
2
S & OP
Budge t & Cos tManagement
10 S&OP a t Sky Germany 19 October 2012
Agenda
1 General information on Sky Deutschland
2 Sky Supply Chain
3 Receiver Procurement
4 S&OP Process at Sky
5 Case Study – Avoidance of stock out
6 Lessons learned
11 S&OP a t Sky Germany 19 October 2012
Sky is currently buying three diffe rent hardware types
HD StandardZapper Box
Externa l hard drive for Premium Sky+ Product
HD Zapper Box with inte rnal hard drive for
Premium Sky+ Product
3
12 S&OP a t Sky Germany 19 October 2012
Sky provides two diffe rent product types
HD s tandard product
Premium Sky+ Product
3
13 S&OP a t Sky Germany 19 October 2012
Sky is buying s tandard rece ive r on dua l sourcing s tra tegy, but premium Sky+ product on s ingle sourcing
separa ted into exte rna l HDD &
rece iver with inte rna l
in ‘000
3
Standard Zapper 398
228
391
Total devices
Premium Sky+
789
424196
822 391 1.213
Supplier 1 Supplier 2
14 S&OP a t Sky Germany 19 October 2012
Sky is buying a ll his hardware from 2 supplie r in As ia with a 28 weeks
leadtime3
Supplier 2
Supplier 1
15 S&OP a t Sky Germany 19 October 2012
Agenda
1 General information on Sky Deutschland
2 Sky Supply Chain
3 Receiver Procurement
4 S&OP Process at Sky
5 Case Study – Avoidance of stock out
6 Lessons learned
16 S&OP a t Sky Germany 19 October 2012
Sky shipped in 2011 more than 1.2 million rece ive r to cus tomers . Nearly 50% of rece iver shipments in 2011 a re re la ted to exis ting cus tomers
2
255345
666Sales
CRM
176490
600
Total Needs 1.266835 431
Standard Zapper Sky+
‘000
17 S&OP a t Sky Germany 19 October 2012
Sky is buying more than 1.3m rece ivers . More than 10% of our needs a re provided by repa ir process (cus tomer re turns )2
131 21
Deliveries 1.225801 424
Total Inbound
OK Receiver 1.377932 445
Repair 152
Standard Zapper Sky+
‘000
18 S&OP a t Sky Germany 19 October 2012
Opera tiona l P lanning @Sky happens da ily on a weekly bas is with input of inte rna l & exte rna l pa rtne rs2
Input Sa les
•Daily adjustments•Weekly periods
Input CRM
•Daily adjustments•Weekly periods
12 month RFCReach
planning
Input Supplie r
•Delivery issues•Airfreight/ Sea freight
Input Finance
• Cash phasing• Capex/ Opex FC
Input Supply Cha in
•Swaps/ Returns•Warehouse capacity
Input Technology
• Software Updates• Defect reasons
19 S&OP a t Sky Germany 19 October 2012
Logistics Jour Fixe
Operational S&OP
Tactical S&OP
Strategic S&OP
The monthly S&OP process @ Sky includes every management leve l & planninghorizon
Planning horizon
Focus on
Org level
Timeline
1 – 10 weeks 3 – 8 months 3 – 8 months 3 – 18 months
Short-term planning Mid-term alignment
- Review of mid-term plans - Cash & STB inbound
plans- Purchasing req.
- Product roadmap- Strategic initiatives- Cash & STB inbound plans - Purchasing plans
Operational Head of / Director Director / VP SVP / Board
1st CW / monthBi-weekly 2nd CW / month 3rd CW / month
Information – Guidance – Decisions
Current Plans – Information Requests – Decision Proposals
Participants
- Sales D/AT- CRM- Technology- Controlling / Accounting- Supply Chain
- Sales D/AT- CRM- Controlling / Accounting- Supply Chain
- Sales D/AT- CRM- Controlling- Business Planning (tbd)- Supply Chain
- CFO- CEO (as needed)- Customer Group- Products & Operations- Controlling / Treasury- Technology- Supply Chain
2
20 S&OP a t Sky Germany 19 October 2012
Actua l vs . Budge t
Absolute volumes(in k STB)
Delta volumes(in k STB)
Delta pe rcentage
Year to Date as of Dec 2011
Comment:
• Reduction of HD-Share due to the change of Promotions starting Q3 (main focus on Sky+)
Actua l vs . Forecas t2
Absolute volumes(in k STB)
Delta volumes(in k STB)
Delta pe rcentage
Year to Date as of Dec 2011
Comment:
•…
40
30
20
10
34.5
19.119.7
16.711.9
15.0
29.7
18.219.2
33.6
14.6
17.117.8
16.1
7.1
12.7
9.6
14.0
21.4
17.8
20.9
18.619.7
21.1
36.1
19.7
18.911.9
10.8
29.7
19.919.2
37.2
14.6
17.2
40
30
20
10
34.5
17.817.8
7.17.19.69.6
21.421.420.920.919.719.7
226.1 +3%(+6.0)+3%
(+6.0)
Actual/ RFCBudget
220.0
-7% 13% 20% -32% -44% 10% -15% -43% 64% -21% 18% 80%
15
10
5
0
-5
-10
Dec
15.4
Nov
3.0
Oct
-3.1
11.6
Aug
-14.4
Jul
-2.5
Jun
1.7
May
-5.6
Apr
-4.5
Mar
3.5
Feb
2.3
Jan
-1.4
Sep
0% 0% 0% 0% 0% 0% -15% -48% 49% 10% 5% -4%
5
0
-5
-10
-15
Dec
-1.6
Nov
0.8
Oct
1.1
SepAug
-18.0
Jul
-2.6
Jun
0.0
May
0.0
Apr
0.0
Mar
0.0
Feb
0.0
Jan
0.0
9.8
226.1 -4%(-10.3)
Actual/ RFCFC2
236.4
Legend:
Actual shipments (Jan-Dec 2011)
Budget as of CW 01-2011Forecast 2 as of CW 26-2011
Supply cha in provides de ta iled accuracy ana lys is to Sa les & CRM2
21 S&OP a t Sky Germany 19 October 2012
Agenda
1 General information on Sky Deutschland
2 Sky Supply Chain
3 Receiver Procurement
4 S&OP Process at Sky
5 Case Study – Avoidance of stock out
6 Lessons learned
22 S&OP a t Sky Germany 19 October 2012
The s tock forecas t of the Sky+ product mid of 2011 shows an uncritica l s itua tion with regard on the ha lf year leadtime5
200
150
100
50
0
-50
-100
65768392
106115130
160154
123134134137
Jul-12Jan-12Jul-11
SecurityBuffe r
‘000
23 S&OP a t Sky Germany 19 October 2012
The s tock forecas t of the Sky+ product beginning of 2012 shows fire fighting has to be s ta rted
200
150
100
50
0
-50
-100
65768392
106115130
160154
123134134137
5
SecurityBuffe r
106125
137
200
150
100
50
0
-50
-100-98
-52
-19-1
324351
154130
111
Jan-12 Jul-12Jul-11
SecurityBuffe r
‘000
24 S&OP a t Sky Germany 19 October 2012
S&OP provides no guarantee for a be tte r forecas t accuracy
20
25
15
10
5
0
Jul 12
Jan 12
Jul 11
Actual
Forecast July 2011
+162.000(+84%)
354.000
192.000
10
5
0
Jul 12
20
15
25
Jan 12
Jul 11
Actual
Forecast
155.000
+55.000(+35%)
Actual
210.000
Forecast
5
CRM Forecas t vs . Actua l in ‘000
Sales Forecas t vs . Actua l in ‘000
Σ+217.000
+62%
‘000
25 S&OP a t Sky Germany 19 October 2012
Production s top a t Wes te rn Digita l, the main supplie r of our supplie r5
26 S&OP a t Sky Germany 19 October 2012
Stock out could be avoided without big impacts on Sky bus iness
4131
42
73
Jun-12
0
20
40
60
80
100
120
140
160
Jan-12
5154
154
130
111106
125
Jul-11
139
5
‘000
SecurityBuffe r
27 S&OP a t Sky Germany 19 October 2012
S&OP measures covered Sky demand in 1 s t HY 20125
Inte rna l measures
Safe ty s tock end of 2011 gave us time to se t up a dedica ted team to eva lua te severa l options to act
Pos tpone CRM campaigns
No discount campaigns from sa les for 1s t HY Se t up of task force with Sky Technology &
Da ily s tock & devia tion ana lys is
Exte rna l measures
Direct contact with a ll HDD suppliers to ge t comple te overview of the current and future supply s itua tion
Da ily s ta tus upda tes from supplie rs
Continuous screening current marke t s itua tion and Tha i Flood Impact
Direct re la tionship to HDD sub suppliers made it poss ible to ge t drives ava ilable
in short te rm
Modera te Sa les & CRM adjus tments saved the bus iness plan & s tock
No s tock out
28 S&OP a t Sky Germany 19 October 2012
Agenda
1 General information on Sky Deutschland
2 Sky Supply Chain
3 Receiver Procurement
4 S&OP Process at Sky
5 Case Study – Avoidance of stock out
6 Lessons learned
29 S&OP a t Sky Germany 19 October 2012
Lessons learned
• S ta rt of dual sourcing s tra tegy for externa l hard drives end of 2011
- Awareness of dua l sourcing s tra tegy mid of 2011- Firs t 100k EHDD from 2nd Supplie r ordered
• Implementa tion of CPFR process with rece iver supplier- bi-weekly conference ca lls / meetings- Video conferences with Humax- Providing 12 month forecas ts to a ll supplie r- more de livery flexibility for confirmed orders- quarterly bus iness revues
• Further improvement of S&OP process- Providing be tte r devia tion analys is S&OP participants- Providing de liver transparency to Sa les & CRM- Stronger engagement of board members- Not only budge t, but common sense
• Better unders tanding our supplie rs Supply Chain- Tear down process- Know the subcontractors and the ir lead times
• Implementa tion S&OP Software planned
Any Questions ?
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