FISCHER & Partner Executive SolutionsRicky L. Stewart

„We are closing your business gaps“

SCM It´s not a back office story

Key Facts - about FISCHER & Partner

Enterprise for Consulting, Project & Interim Management

Founded 2009 in Hamburg

Offices in Hamburg und Munich

Powerful network with about 40 professionals and industry experts

Independency by bounding freelancer experts

More than 500 years of operational expertise from leading blue chip companies

Know-how in process optimization-, restructuring- and M&A, SCM, S&M

strategic – operational excellence – performance focused

Spectrum of Services

Marketing &Sales

Strategy & Management

Restructuring & Realignment

M&AOutsourcing

InterimManagement

Finance & Controlling

Processes & Organization

Supply Chain & Logistics

IT

Functional Competence

Industry Competence

Partnerships & Cooperations

Consumergoods& Trade

Pharma& Healthcare

CE, IT, Media& Telecommunication

Chemical Industry, Energy& Engineering

Interim Management

Providers

Strategic Investors

Private Equity-Fonds

Interim Management Partnerships

HR & Business Consultancies

Financial Auditors & Tax Consultancies

Private EquityBusiness Unit Leader

Unique combination of functional- and industry competences

ToolsIntegrated Process Optimization & Enterprise Mobility for Sales

Integrated Process Optimization

FISCHER & Partner

Enterprise Mobility Solutions,

Coop-Partner Heidelberg Mobil

Sustainable implementation of DDEM-method

Transparency, Efficiency, Flexibility Competetiveness

ToolsIntegrated Process Optimization & Enterprise Mobility for Sales

Implementation-LevelsIPO ensures the implementation on different levels

1. Process-LevelExposition of sales processes on mobile devices

2. Functional-LevelProviding Sales- & Marketing data, where they arise and being required

3. User-LevelConsolidation of IT-Applications by superior process layer and deduction of process-stages to pre-defined user groups.

Fusion of Customer Relationship Management, Enterprise RessourcePlanning and Intranet applications

4. Value-ChainEnsuring information exchanges on all functional departments, e.g.

automatic turnover- and production forecasts on order-, stock- and sales basis

No Consultant talking…

English – ConsultantConsultant - English

FISCHER & PartnerDictionary

What´s wrong in the CE market?

You ALL have high quality products with stunning features

You ALL have great product design and wonderful marketing programs

You ALL have the best sales force in all possible worlds

You ALL have customer service which is the benchmark for others

Yes, there is always room for improvement

Why do companies making a loss while others do record profit?

What makes a Lean Champion?

High Low

Low

High

Lean Champion

Service (OSA)

Efficiency in SCM &

Logistics processes

Effective planning

and control

Goal-oriented

cooperation

Control over key

figures

Organizational

alignment of the

integrated value

chain logistics costs

Ranges

process costs

Loss of revenue by OoS

Inventory and capital costs

ProfitLoss

We found a difference in the SCM process…

SCM is not a back office story

It is THE key process

Supply Chain Management is a key process

Lean Champions have one thing in common:

The entire organization is driven by the SCM process and it is also used as aManagement cockpit

Value Chain Optimization (VCO)

= costs-, turnover- and customer-orientated optimization of the value-chain

Definition of SCM….

Cu

stom

er/C

onsu

merSupply Chain Management Customer Management

optimization of supply-chainOptimization of

sales chain

Su

pp

lier

1. Target: Increaseavailability of goods

2. Target: Decrease

of logistic-costs

Integrated optimization of the value-chain

sustainable cost reduction process improvement and costumer loyalty

Demand&

SupplyPlanning

Operations

Inbound&

OutboundLogistics

CustomerService

Marketing& Sales

+

On Basis of Information Structure

SCM Basic Concept Provide the end consumer with the highest quality at best price, at the right time with the

shortest lead time- By partnering with channels, suppliers, 3PLs, and internally between Sales, Marketing, R&D, Procurement, Manufacturing, Distribution, Service, and Business Management - By continuing to innovate process, systems and organization, to improve long term profitability

Product PersonellProcess

Business

Produkt

Technology

People

Organization

Policy

Deve

lopm

ent

Pro

cure

ment

Pro

ductio

n

Mark

etin

g

Sale

s

Service

Logistics

Busin

ess

Managem

ent

Development

Management

Supply

ManagementCustomer

ManagementBusiness

Management

Decision Making Process

Supply Chain Process

Action Fields in Supply Chain Management ….require integrated and modular solutions

t 2 Our project-module SCM & Logistics for optimization of value-chains

Support & Interfaces

Operations

Structure

Strategy

Ac

tio

n F

ield

s f

or

Op

tim

iza

tio

n-P

roje

cts

SCM Vision

SCM Strategies

SCM Management/Organization

SCMProcesses

4

Sales

12

Marketing

13

Fi/Co

14

HR

15

SCM Planning

SCM Logistic / Network

SCM Controlling/KPI

6 7

Purchasing

8

IT

9

Customer Service

10

CRM

11

5

1 2 3

Yes….You all have SCM

But…

If your C-level Management is not pushing for improvement

If you SCM manager is complaining that no one is talking to him (sales)

If your SCM Manger is in a comfort zone of jargon and technical issues

If sales & marketing is not involved- no KPI

If you have monthly business reviews

If there is quite a gap between FC and result and everybody got used to it

YES? SCM is a back office story in your organization

Learn from other industries

Companies learn often from direct competitors

Non performers learn from non performers?

Champions look for improvement in different -but comparable-

industries and markets

Fresh Food High control of Supply Chain is everyday focus - otherwise you loose!

A Food Business ExampleWhat do you think is the margin of Fresh Dough?

Consumer Sales Price (Gross) € 1,29

Consumer Sales Price (net) € 1,21

- Retail Margin (ca.35%) € 0,42

Net-Net € 0,79

- Transport & Warehousing € 0,28

- Packaging & Recycling € 0,23

- Ingredients & Manufacturing € 0,17

Delivered Margin € 0,11

- Marketing Spend

- Administration cost

Supply Chain drives Profit:

High impact of cost structure

Obsolescence is most value

destructing

Exemplary calculation:

Fresh DoughHow to crate a winning International Supply Chain for Fresh Dough?

Tough Challenges:

Short total product life (65 days)

30 days guaranteed shelf life to Trade

High variances in weekly sales

Traditional weekend-consumption

High seasonality

Demand highly influenced

- by weather

- Shopper impulses at POS

Long Supply Chain due to complexity:

- Origin of ingredients

- Unique Packaging components

Logistics Challenges:

- Temperature control a must

- more than 2500 km to transport

Key Success Factors:

Connected functions along SCM

One set of numbers

Match of Supply & Demand

Rolling forecast (weekly)

Monitor performance KPI

Align the functions in joint reviews

Benchmark

Improve Logistics efficiency

Look for maximum SC flexibility

Improve the SCM process

Integrated Business Planning

Keep the functions connected & responsible

© Oliver Wight

Weekly

Match of supply and demand rolling FC weekly

Lean Champions plan and monitor business with rolling weekly forecasts

Lean Champions do it weekly

Monitor performance and KPIAlong the added value chain

Factory

Warehouse/Distribution Center

Sales & Marketing

FC accuracy – closest to the market

stock older 60/90 days

Everybody is responsible

Champions benchmark

Benchmarking is the practice of being humble enough to admit that someone else is better at something and being wise enough to learn how to match and even surpass them at it

External

Benchmark against Champions

SCM Benchmark not only in your industry or market

Internal

By division

By country by product group

By department

Benchmarking is a process for implementing best practice

1st Level:

Figures for the entire

supply chain

2nd Level:

Key figures per

function?

(examples)

3rd Level:

Detailed functional

indicators

(examples)

Management

Business Unit

Manager

Floor Mananger

WholeSupply Chain

Supplier

Performance

Service Level

tot. logistics

cost share

Supply Chain

planningforecast accuracycaused shelf gaps

Central logistics

utilization

Costs of central logistics

Branch

Logistics

total shelf availability

Store logistics costs

Supplier

Causes shelf gaps

Efficiency EDI messages

Promotion

Shelf availability

in the course of

action

remainder

Stock

Pick-cost

Truck utilization

Branch

shelf availability

Refill productivity

Subjekt AddresseesKey hierarchy

service levelshelf availabilitySupply chain coststotal stock

SCM - Management cockpit

Supply Chain- constantly improve the processDevelopment of content and importance over last decades

Lean Champions constantly improve

Integrated Business Planning and MonitoringKeep the functions connected & responsible

Everybody is involved

Champions monitor weekly

© Oliver Wight

Weekly

Factory

Sales & Marketing -push stock or demand?

EDI in the order and

invoice

Informal exchange of

individual indicators

Joint pilot projects in

logistics, planning

Measuring supplier

performance

Standard

Don’ts

Dos

o Joint Scorecards

o Intensive Master Data and Ratio exchange

o Joint packing optimization

o Expansion of EDI use (especially shipping)

o Active management of supplier performance

(Influence of supply chain performance on the

conditions negotiations, use of financial sanctions)

Intensive substantive cooperation with calculable

short-and medium-term efficiency potential

o Joint strategic long-term planning

o High investment in intensive relationships of trust and close personal contacts

o Too extensive CPFR and VMI projects without predictable return

o High number of pilot projects without clear objectives and sufficient Controlling

Cooperation for its own sake with high resources

and the risk of lack of focus

Dos and Don'ts in the cooperation between retail

and industry.

SCM as the most important processSCM Champions

Lower out of stock rate

Lower stock

Lower costs

Are using the SCM Cockpit and meeting as a management tool

Has joint plans together with retailers

And react faster on market changes

SCM as the most important process in the company is one of the

reasons why Champions perform in a impressive way

FISCHER & Partner Executive SolutionsAnalysis, strategy, design and implementation from one source

THANK YOU

Colonnaden 46 - 20354 Hamburg

Phone: +49 (0)40 34 10 770 – 10

Mail: kontakt@executive-solutions.de

Web: www.executive-solutions.de

Ricky L. Stewart