collaborative planning with key customer - eyeon · collaborative planning with key customer...

Schneider Electric – EyeOn Planning Inspiration Day 2017

Confidential Property of Schneider Electric

Claude De Paoli

Oct 5th 2017

Collaborative Planning with Key Customerleverage for growth

Our technologies ensure that

everywhere, for everyone and at every moment.

Confidential Property of Schneider Electric |

ENERGIZED•+50% energy consumption by 2050 due to

urbanization, Industrialization , digitization.

• Electricity to grow twice faster than energy

consumption

•2.3 bn people do not have

either access or reliable access to electricity

EFFICIENT

•3X efficiency needed to solve climate change

•82% of untapped energy efficiency in buildings

•>50% of untapped energy efficiency in industry

CONNECTED

• 10X more incremental connected devices

than incremental connected people by 2020

• 30bn connected things by 2020

• Software runs everything

when life is…

Sources : Industry Reports

Schneider makes life Safe, Reliable, Efficient, Sustainable and Connected



Megatrends are provoking a rise in Energy Demand

URBANIZATION+2.5B people in cities

by 2050Source: United Nations, DESA

DIGITIZATION

Source: Cisco

50B connected things

by 2020

INDUSTRIALIZATION+50% Energy consumption

by 2050Source: IEA


Resources in the next 40 years

Energy consumption will grow by 50%

CO2 emissionsneed to be halved

×1 ÷2We have to become

3 times more efficient

3×.5

Note: Forecast for 2050 compared to 2009 levels


At Schneider Electric,

we combine Energy Management,

Automation and Software

serving 4 markets, i.e. 70% of the

world energy consumption

Energy Automation

Softwareand

Analytics

% are calculated on final energy

Industry & Infrastructure

> 30%

~2%Data Centres &

Networks

Residential Buildings

> 30%

Source: IEA Explore 2015


Schneider Electric, the Global Specialist in

Energy Management and Automation

Balanced geographies – FY 2016 revenues

28%North America

18%Rest of World

27%Western Europe

27%Asia Pacific

€24.7 billionFY 2016 revenues

160,000+people in 100+ countries

5%of FY revenues devoted to R&D

Four integrated and synergetic businesses FY 2016 revenues

43% 22% 20% 15%

IndustryBuildings & Partner Infrastructure IT


Schneider Electric Global Business in Over 100 Countries

1: Published figures in billion € restated to reflect country-market view;

2: Billion € pro-forma basis including LTM Sep 2014 revenue for Invensys

3: Including Invensys, excluding Delixi and Fuji

North America

33,700 Employees3

38 Factories

Western Europe

47,600 Employees3

92 Factories

Asia Pacific

61,500 Employees3

Including JV

77 FactoriesIncluding JV

Rest of the World

34,100 Employees3

38 Factories

7

20031 20142

6.32.3 6.74.1

20031 20142

1.2

20031 20142

1.2 4.8

20031 20142

Schneider Electric, a global Supply Chain in


90,000 employees (Total industrial headcount incl. Purchasing, Manufacturing and Logistics)

Purchasing

• 45,000 suppliers

• €12B purchases

Manufacturing

• 218 factories

• 44 countries

Logistics

• 100 distribution

centers

• 130,000 order lines / day

• 500,000 references

Customer

Orders

December 2015(including Delixi and Invensys, w/o CST)

A vast worldwide set up

Country Sales &MKTDistribution Network FactoryFactory / Suppliers Customers

Schneider-Electric

Plant

Schneider-Electric

Distribution centerCustomerTier 1

Supplier

DemandDemand Demand Demand

Tier 2

Supplier

Demand

Schneider-Electric

Distribution center

Sales, Inventory & Operations Planning

Distribution

Requirements

Planning

Master Production

Planning

Product lines

Collaborative

Sales

Forecasts

Collaborative Planning

with critical suppliers &

Vendor Forecast

Collaborative

Planning with

key customers

Aligning Demand, Supply, Inventory & Financial

SIOP

A full End to End global Supply Chain supported by


C

U

S

T

O

M

E

R

S

Schneider’s SIOP and Planning Processes


Distribution

Requirements

Planning

Master Production

Planning &

Capacity Plng

S

U

P

P

L

I

E

R

S

CountryDistribution Network Factory

End-to-end Supply

Chain

Collaborative Sales

Forecasts

Vendor Forecast &

Collaborative Plng

with suppliersFactory

Project Management Process PMP

Product Evolution Process PEP

Product Withdraw Process PWPIndustrial Transfer Projects

Demand

Management

Offer

management

Supply

ManagementInteraction &

Reconciliation

SIOP Reviews

Step 1

Step 2

Step 3Step 4

Step 5

Collaborative

Planning with

key customers

SELL IN

CoPlanning with key Customer; A breakthrough initiative

CoPlanning; a shared inventory & end-market demand visibility

through Ritualized collaboration,

supported by a joint Sales & Marketing strategic vision

and materialized through a Synchronized supply chain.

@

SELL TROUGH SELL TROUGH SELL OUT

=S= DISTRIBUTORPARTNER

&

INTERMEDIATE

END

CUSTOMERDistribution Center Distribution Center

Point Of Sales

E-Business

Co-Planning scope

Factories

Evolving our business model, from a B2B2B model focused on Sell-In relationship to a B2B2B2C

model also focused on Sell-Through relationship.


1 2 3 @

An approach to better envision efficiency & growth opportunities


Competitive weapon to boost growth

• Joint, structured, targeted collaboration on new

product introduction, promotions, campaigns

• Increased on-shelf availability through shared visibility

of forecasted market demand and joint stocking policy

Collaborative optimization of the extended supply chain

• « Healthy Stock » approach to clean excess and

obsolete and avoid missing inventories

• Increased efficiency and performance through better

demand forecast and bullwhip reduction

CoP Value Proposition« A la carte » toolkit to address specific customer’s objectives in a structured way

Price

Increase

Healthy

Inventory

Planning &

Projection

Sales

campaigns

Quarterly &

End of Year

Bonus

Joint

Stocking

Policy

Promotions

New

Product

introduction

Sell

thro

ugh

to

Se

ll In

Sig

n O

ff


Business collaboration proposal Step Up

Price

Increase

Healthy

Inventory

Planning &

Projection

Sales

campaigns

Quarterly &

End of Year

Bonus

Joint

Stocking

Policy

Promotions

New

Product

introduction

Se

ll th

rou

gh

to

Se

ll In

Sig

n O

ff

1 2 3

4.2

4.1

4.3

4.44.5

4.6

4.7

4.7 Joint Stocking Policy

4.6 Sales & Commercial Event

4.5 Price Increase

4.4 Promotions

4.3 Phase In – Phase Out

4.2 Quarterly & End of Year Bonus

4.1 Inventory Planning & projection

3.Forecast Sign Off

2.Sell-In Sales Forecast (DRP)

1.Sell-Through Sales Forecast (CSF) Mu

st

ha

ve

Growth

levers to

select


•Commit on agreedSell-Through Sales Forecast & GenerateSell In

•Define a joint Sales &Marketing Rolling Roadmap

• Generate Sell-Through Sales Forecast

•Jointly Review&Agree

on 1 Market Demand

Plan (Sell-Through Sale

Forecast)

• Propagate Demand Signal

in Supply Chain Processes

• Ensure Execution of

Business Strategy

• Sales Events

• Loyalty Program

• Catalog & Web Info

• Promo & e-Promo

• Phase In - Phase Out

• Customer Classifications

• Offer Coordination w/ BU

• Project Pipeline

• Price Increase

• Market Trends

• Extract Historical Sales

• Clean History

• Aggregate Data

• Calculate Statistical Forecast

• Integrate/Translate Sales & Mkting

Rolling Roadmap Inputs

•Sales Growth&Performance (cash,…)

•Service level

•Healthy stock

CoPlanning

Business process

Benefits


CoPlanning in a 7 steps monthly cycle (Day In A Life – DIAL)

Generate Sell

Through

CoP discussion

and override ST

ST

Simulated

vs

Ambition

Adjust inventory

parameters &

generate Sell In

Sign Off

committed

ST

SI

Simulated

vs

Ambition

Sign Off

committed

SI

Accepted

Refused

Accepted

Refused

=S= SIOP Integration

CoP Sell Through review

CoP Review

Step 2

Step 3

Step 4

Step 5

Step 6

Sales &

Marketing

Roadmap

omodo

Process &

Perf KPI’s omodo

Acquire and

Validate Master

Data

Step 1

Supply

Commit

Step 7

Define action plan (Adjust sell in or sell out

commitment for the current or

next cycle)

* Adjustment of Sell Through to be done on the next cycleConfidential Property of Schneider Electric |

https://schneider-electric.box.com/s/0st9o4tqyqei54n6i8lzqkh16vxg0d0b

• Log assumptions• Promotion

• Campaign

• Project

• Phase In/Phase Out

• Price increase / price decrease

• …

Collaborative Sales Forecasting in Kinaxis

decision making support

• Check master data consistency

• Create Forecasts Items

• Correct history

• Generate and review statistical forecasts

• Consensus meeting

• Consensus meeting


• Prepare data in scenarios

• Launch DRP initialization

• DRP analysis

• Create Sell-In forecasts

• Review Sell-In Forecasts

Distribution Requirement Planning in Kinaxis

Stock optimization and SELL In creation


WeaknessesStrengths

• Joint governance relies on people willingness

• Joint Business Planning activities pretty new

for some of historical transactional Partners

• Perceived complex & resource intensive effort vs. tangible, traceable benefits

Lessons learned for Collaborative Planning with Customer

• Perceived as a “nice-to-have” Supply Chain"

initiative and not business potentials

• Variable Customer digital maturity

• Change Management Culture apprehension. Between companies and inside each of them on a multi disciplinary level (Sales/Mkt/SC…)

• Concurrent forecasting & collaborative tools available on the market for

customer choice

Opportunities

• VIP customer treatment analysis with CS&Q*

• Multidisciplinary efficiency Supply Chain,

Sales & Marketing

• Full benefits from SIOP Integration

*Customer Satisfaction & Quality

• Bring Voice of customer into Supply Chain

• Switch from Sell-In to Sell-Through visibility

• Align growth and Supply Chain added value

• Co-design capabilities = new process creation (Supply Commit) -Customer centricity

• Best of breed IT tool - Leverage platform & capabilities enhancement

Threats


Business collaboration proposal Step Up

Price Increase

Healthy

Inventory

Planning &

Projection

Sales

campaigns

Quarterly &

End of Year

Bonus

Joint

Stocking

Policy

Promotions

New

Product

introduction

Se

ll th

rou

gh

to

Se

ll In

Sig

n O

ff

4.2

4.4

4.7

4.7 Joint Stocking Policy

4.6 Sales & Commercial Event

4.5 Price Increase

4.4 Promotions

4.3 Phase In – Phase Out

4.2 Quarterly & End of Year Bonus

4.1 Inventory Planning & projection

3.Forecast Sign Off

2.Sell-In Sales Forecast (DRP)

1.Sell-Through Sales Forecast (CSF) Mu

st

ha

ve

Growth

levers to

select

Confidential Property of Schneider Electric | 1 2 3

4.1

4.3

4.5

4.6

• Breakthrough statistical generation of end market demand trend

• Last 6 consistent months results show a Forecast Accuracy between 60% and 80%*

• Ability to deep dive into data analysis to better understand end market• Trend analysis of customer segment versus Schneider ranges

• Visibility on End of Quarter/Year incentive and impact on inventory and Sell In

Up to 18 months horizon of end market demand, at different aggregation level (up to reference)

SELL THROUGH PROJECTION : Co-planning

anticipation about End of Year business achievement

and comparison with previous year.

SELL THROUGH FORECAST ACCURACY :

calculated with 3 months offset

and product family aggregation

Visibility with CoPlanning Sell-Through Stat. Forecasting

* 6-months period Nov’16 to Apr’17

1 2 3


• Downward trend spotted in July after poor

H1 performance alert ! Sell-In target is

going to be missed by more than 50%

• Aug/Sep/oct Quick actions taken jointly by

SE and the Customer to secure fulfillment

of business

• SE provided the Customer with ‘resources’

(, promotion, joint sales event…) to capture

more business and offset PCP trend

• Finally, although gap could not be totally

recovered, it was greatly reduced to 25%

Case of PCP product family for which EoY Sell-In projection fell under the ambition.

OTDc* On Time Delivery Customer

Anticipation with CoPlanning Alert & Joined sales efforts

Jul’16

Oct’16

Dec’16

EoY projected

gap VS target

EoY actuals

gap reduced to 25%

1 2 3


• Proactive communication on potential deficit during CoP Sell Through review and escalation

for decision during CoP Review

• Customer prioritization in case of major deficit. Happened during the Q1/Q2 drives deficit.

Anticipation with CoPlanning Successful mgnt of supply alertIndustry Drives quantity deficit (Asia Q1/Q2 2017)

SELL THROUGH : Co-planning anticipation and impact on demand measured in

SELL Through trend Supply crisis

SELL Through

maintained to a

good level

1 2 3


• Additional Growth = +10% May 2017 (estimated end of 2017: 15%)

• Launch Forecast Accuracy = 96% End Of Life & 80% New Product Introduction

• Time to Market = 5 months substitution with 50% substituted in 2 months

• Healthy Stock = -50% of old stock in 1 month

• Availability on shelves = 100% at launching month

Speed & agile launch with CoPlanning Inventory optimizedNew Product Introduction (France 2017)

SELL THROUGH : Co-planning substitution speed measured in

SELL Through Old range

SELL Through New range

SELL Through New range - Forecast

2016

2017Launching

month+20%

Fcst FY2017 :

+15%

4.1


• Additional Growth = +3,9M€ +12% in 2017

• Competitive Advantage = +9 pts vs Competition

• Enrichment Mix Offer = +10 pts on Door Mix, +30% growth on Trunking

• Launch Forecast Accuracy = 85% at product family

• Time to Market = 4 months substitution + 100% availability on shelves

• Healthy Stock = 0 old stock (100’s of kEuros) at customer & 0 return to SE

Speed & agile launch with CoPlanning Beat the competitionNew Product Introduction (France 2016)

SELL THROUGH : Co-planning substitution speed measured in

SELL Through Old range

SELL Through New range

SELL Through New range - Forecast

4.3


• Orders placed in April, 100% availability on shelves for the launching date

• Additional Growth = +48% vs same month 2016

• Feed back from DC’s and Factory for being able to sustain

• Promotion successful : 90% forecast accuracy, ~ 100% delivered on time

Anticipation with CoPlanning Successful sales campaignsSpecial commercial event (France 2017)

SELL THROUGH Forecast : Co-planning anticipation and impact on demand measured in

SELL Through Y vs Y-1

on impacted references

2016

2017

All references scope

SELL IN, SELL THROUGH,

Stock forecast

SELL Through

SELL In

Inventory

SELL Through

Fcst

SELL Through

Actuals

Accuracy

90%

SELL Through actuals

4.6


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