Integrated Business Leadership“It’s not just about the numbers . .

Roger Ablett - Partner

Delos Partnership

18th March 2015

© The Delos Partnership 2015SCL Event 1

Delos - What do we do

Education of clients in “Integrated Business Planning/Leadership” to help clients’ employees’ bring about transformational change in ways of working – culture, organisation, processes and systems.

Facilitation of Task Teams to provide technical support and practical project advice to Steering committee to ensure fast effective implementation of the concepts behind Integrated Business Leadership

Design Workshops with Task Teams to develop the detailed ways of working for New Product Introduction, Sales Forecasting, Operations Management, Financial Management, Performance Measures and Senior Team decision-making

© The Delos Partnership 2015SCL Event 2

Agenda

• Corporate Overview • Identification of Needs• Approach & Achievement• Progress Made• Lessons Learned

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Corporate Overview

Part of Aalberts Industries Pegler Yorkshire

• Sales £150m+• Sales to over 100 countries • > 1250 employees

manufacturing sites & 1 DC• 14,000+ SKU’s• Recycle 6kT of brass per yr

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2005+ Finance+ Warehouse capacity

2007• Merger PY

• S&OP2010

• IBL Relaunched as BPP• NPD Senior Review• 6 Sources of Supply

2002

2010

2007

2005

2011

2011• Planning Review

2002• S&OP in place at Pegler

• NPD; Demand; Supply• 2 Sources of Supply

Pegler Yorkshire Timeline

© The Delos Partnership 2015SCL Event 5

Why did PY need IBL ?

Strategic• Delivery• Control• Roadmaps• Communication

Cultural• Integration

Harmonisation• Empowered

Decision Making• Silo Mentality

Financial• Focus on the

future• P&L + Balance

Sheet• What If

Performance• Service Levels• Activity delivery• Repair S&OP

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The informal company

• Multiple sets of numbers• Multiple spreadsheets• Multiple ways of working• Confusion over real objectives• Defensive functional behaviour• Rumours around the corridor• Ad hoc communication• Short-term focus• Heroes are favourites

Silo Management

Sales Operations Finance R&D

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Integrated Business Leadership gives..

1. Formal process leading to effective decisions

2. Decisions based on facts rather than opinions

3. Long-term rather than short-termist view : less firefighting and panic

4. Process performance measurement rather than “making it” against the

budget

5. Ownership and responsibility for the numbers

6. A Rolling financial plan – giving time to adjust rather than panic at year end

7. Team-based decision making based on common goals and objectives

8. Strategy set and communicated and delivered

It requires democracy for the planning phase and autocracy for the execution

It is organised common-sense…but that is not so common

© The Delos Partnership 2015SCL Event 8

Approach

Create the Vision Get Buy In Educate &

Consult

Prepare & Train

Implement & Try it

Review and Improve

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We designed our own process

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Educate : -Why is Stock so high & OTIF so low ?

Forecast Accuracy

Adherence to Plan

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Why are we Forecasting ?

Understanding Seasonality

Projecting Sales Volumes &

ValuesMeasure Forecast Accuracy

Product Launch & Promotional

Volumes

Requirement Plan

Financial Plan

Define Safety Stocks from

Forecast Accuracy

© The Delos Partnership 2015SCL Event 12

What did we do

• Regular summarised Measurement–with analysis• Focus on A Class; but keep tabs on B,C & D items• Competitive pressure by source of Supply

Service OTIF

• Regular summarised Measurement • Harsh and Simple rules• Action list by Person

SLOBZ

• Agree rules for segmentation• Identify ABCD / RRSA service level target• Consult; Implement; Load

Safety Stock Matrix

• MTO;MTS;MTF – agree, communicate and Load• Measure – forecast accuracy; adherence to plan• Use ERP

Stocking Policy

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What did PY achieve

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Where is PY now

• Referenced & Known• Induction Process• Documented

Maturity

• MD• @ Implementation = clear• Ongoing - by Section re-affirmed

Ownership

• Feedback loop• Preparation• Service Matrix

Levers

• Based on IBL process• One set of numbersBudget

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Learning Points

• Cultural complications Focus on what you can change – the future How to win over Resolute Blockers Deal with the problem Re-brand if necessary

• Implementation Use what you already have Choose the right people Change Management over time

• Output Keep it Simple but make it look professional Document the process with a Std Op

“If you can’t write it down you haven’t defined a right way of doing it yet”

• It really is Organised Common Sense© The Delos Partnership 2015SCL Event 16

Key Benefits

• Tangible Stock reduction of 10% in 2 years; 20% in 4 years Customer Service OTIF improved to 95% (A=98%) Room for improvement . . . ie more stock reduction !!!

• Intangible Decision making made at appropriate level Key Performances and Issues – Summarised Co-ordinated activity within the business - prioritised Better quality of information that is forward looking and not “what I did

last month”• In Summary – “It’s not just about numbers – so tell me . . . . ”

“What has changed since last month” “What decisions have been taken” “What decisions do I need to make” “What I need to know – so I don’t have to spend my time looking”© The Delos Partnership 2015

SCL Event 17