global’supply’chain’systems’&’strategy’ atplantronics’...

Simply Smarter Communica1ons™

UCSC Management of Technology Course

February 3, 2010 by Kai Hypko

Global Supply Chain Systems & Strategy at Plantronics

CONFIDENTIAL • 2011 BRAND RELAUNCH •

Agenda

Who Am I?

Plantronics

Global Supply Chain Challenges

Plantronics Supply Chain Challenges

SCORE Project

Project Methodology

The Economy and its impact

Now what?

Value-‐Driven Replenishment Time permiXng


Plantronics Secret

My Story

German, came to US in 1988

BS Degree in MIS & BUAD

18 years in Supply Chain

Hi-‐Tech, OEM, Retail experience

Professional Associa1ons •  APICS, the Associa1on for Opera1ons Management •  Board of Directors of NorCal OAUG •  Aberdeen Research Advisory Council member •  Speak frequently at Supply Chain events such as CES, ESCA and Oracle Open World.

Personal Mo^o: •  “You get what you tolerate” Joined Plantronics in Fall 2006


Plantronics Secret

What do I do?

Act as enterprise wide process improvement evangelist and change agent.

Ensure that all business transforma1on programs align with the strategic direc1on of the company’s ini1a1ves.

Interface and communicate broadly across the company to lead change management and implementa1on efforts. Inform and influence key stakeholders to gain buy in.

Collaborate with internal organiza1ons to establish priori1es, make business trade-‐offs, and sequence ini1a1ves necessary to achieve long term process goals.

Work closely with internal business process owners and support func1ons to scope program deliverables. Develop and implement a plan (roadmap) to achieve objec1ves for each of these processes.

Partner with func1ons owners, third party system integra1on partners and consultants to plan and implement process & system improvements.


Plantronics, The Company

5 2/8/11


Founded in 1961

Consumer Products & Communica1ons

Headsets & Unified Communica1on solu1ons

Revenue ~ $700 Million

3500 employees worldwide

Publically traded NYSE: PLT

Medium Vol – High Mix

Long RM LT – short customer LT

Manufacture & Distribute Global

Plantronics


Using Photography: Content + One-‐third Photo


Leading worldwide designer, manufacturer, marketer and seller of lightweight communica1ons headsets, telephone headset systems, and accessories for the business and consumer markets under the Plantronics brand.

Manufacture and sell, under our Clarity brand, specialty telephone products, such as telephones for the hearing impaired, and other related products for people with special communica1on needs.


Global Supply Chain Challenges


Compe??ve Business Environment

Accurate and 1mely commitments

Shorter lead 1mes Flexibility

Product differen1a1on Dedicated inventory Visibility into the supply chain

High quality Automa1on Lowest costs

Customers are demanding:

Inventories

Ability to promise Global suppliers

Forcing businesses to be^er manage:

Supply/Demand

Forecasts Cycle 1me

Stocking policies

VMI/SMI processes Replenishment

Too much inventory

Inventory in the wrong place Ordering the wrong inventory

Missing delivery dates Losing orders Shipping the wrong products

Increased expedi1ng costs Losing customers Increased obsolescence

Increasing business risks of :


Today’s Market Reality

Markdowns: on 30% of merchandise sold

Forecasts: only 65% accurate

Inventory: $1.2 trillion stockpiled in the supply chain

Orders: 20% filled imperfectly

New Products: 75% fail to meet forecast expectations


Excellence in Supply Chain


Supply Chain Transforma?on

*Social Network Data

*


Supply Chain Decisions


Evolving Supply Chains


Substance vs. Structure •  The next genera1on of data is not neat and pre^y and easily forma^ed •  It might not need to be retained •  It’s possibly not numeric

Connec1ng vs. Collec1ng •  It’s not about geXng the most data •  It’s not about geXng it into the sources and targets •  It’s about helping people connect the facts in a meaningful fashion

Prescribing vs. Describing •  Repor1ng is a basic competency •  Prescribing is a business differen1a1or


Tes1ng vs. Trying •  The organiza1on will become disciplined in comparing •  The science of math is embedded in the business •  The words, “we’ve tried it” won’t count

Effec1veness vs. Efficiency •  Speeding up mediocrity got us into this mess •  Precision is point in 1me, point of impact


Best in Class


Plantronics Supply Chain Challenges

18 2/8/11


Plantronics Secret

“Recent” Key Changes at PLT

Acquisi1on of Altec Lansing

Entering of Consumer Retail Market

New factory in China

4 addi1onal Distribu1on Centers


Plantronics Secret

Plantronics Challenges

  Customer service issues

  Constant reschedules   Too much of the wrong inventory

  Manual disconnected planning processes (Excel)

  Too much obsolete inventory

  No formal S&OP Process

  Disparate Planning Systems

  Mul1ple source systems

  Compe11ve issues

  Inflexible planning tools   Fragmented planning data

  Poor forecas1ng capability   Global supply chain requirements

  Changing business condi1ons


PLT Supply Chain

Where is it?

Manufacturing w/o Oracle Distribution Warehouse

Mexico

United States

Netherlands

China

UK

Manufacturing

Flow of Goods

Brazil

Japan

Australia


Plantronics Secret

PLT Supply Chain 2006

We manufacture 75% of our own products

2 factories (Mexico, China)

8 global distribu1on centers

Buy raw material to forecast

Pack to order

Assemble to min-‐max seXngs

Fulfill orders through our DC’s

Decentralized purchasing & planning

~3000 Finished Goods items


Plantronics Secret

PLT Supply Chain Status 2006

Inventories have increased drama1cally

Customer OTD has dropped

Supplier OTD is unknown

Ability to make accurate commits has dropped

Lead 1me has increased

Forecast accuracy is low

Lack of ability to analyze poten1al opportuni1es quickly

Global environment; localized system u1liza1on


Supply Chain Op1miza1on & Reengineering

24 2/8/11


Plantronics Secret

SCORE Project

Launched the SCORE Project in 2007 •  Supply Chain Op1miza1on and Re-‐Engineering

Establish a world-‐class Supply Chain by: •  Crea1ng a global, integrated, collabora1ve system and processes which are scalable, without legacy knowledge and added manpower

Single Source of Truth


Plantronics Secret

Project Objec?ves

Improve Forecas1ng Process & Accuracy

Increase Inventory Turns

Reduce Excess & Obsolete (E&O) Inventory

Provide More Accurate Ship Dates to Customers at point of Order Entry

Enable a faster, more effec1ve Sales & Opera1ons Planning process

Accurate, Global Inventory Visibility

Issue correct PO prices and receive acknowledgements and commits from suppliers

Automate Manual Transac1ons


Plantronics Secret

SCORE Project

“ Supply Chain Superiority is not achieved with a single project, but is an evolu1on of relentless focus and con1nuous improvement ”

Author unknown


Plantronics Secret

Customer Collaboration (Portal / CMI)

Global Order Promising (GOP)

Product Life Cycle Mgt

?Upgrade R12.X?

Warehouse Optimization & Mobile / Sensing Services (WHMS)

Demand Forecasting & Demand Management (Demantra)

Promotions Management (Demantra)

Trade Management & POS

Promotion Optimization (Demantra)

Supplier Collaboration (i-Supplier)

Advanced Planning

Supplier Collaboration (Consignment/VMI)

Data Clean-up

Advanced Planning (Constrained Plan)

Supply Chain “Quick Wins” Supply Chain

Business Intelligence (DBI)

Inv Optimization (Proof of Concept)

Transportation Planning (G Log) (Review / Proof of concept)

Jan-07 Jan-08 Jan-09 Jan-10 Mar-10

Overall PLT Project Plan 2007

Altec iSupplier ASCP roll out Stop Ox

S&OP (Demantra)

Strategic Network Optimization (SNO)

Production Scheduling


Plantronics Secret


Global Order Promising, EMEA

Agile


Demantra Demand Planning Demantra Promotions Management & Optimization


Advanced Planning & Scheduling


Data Clean-up

Advanced Planning, Phase II

Supply Chain Business Intelligence (DBI)

Inventory Optimization

Transportation Planning (G Log)

Jan-07 Jan-08 Jan-09 Jan-10

Overall PLT Project Plan July 2008

Altec iSupplier ASCP GOP

Demantra S&OP



Demantra 7.2 upgrade

Global Order Promising, ROW


Plantronics Secret



Agile






Data Clean-up






Overall PLT Project Plan Jan 2009


Demantra S&OP





Jan-11

APS & Demantra enhancements


Plantronics Secret



Agile PC and PG&C


Demantra Demand Planning

Demantra Promotions Management & Optimization




Data Clean-up





Demantra S&OP




Jan-11



Altec; iSupplier ASCP, GOP

GOP ROW


iSupplier ASN

Jan-12 Jan-13

APS 2 Plans & R12 upgrade

Rapid Planning

Agile Quality?

R12 Upgrade


Marketing

R&D – Product Lifecycle Mgmt

Sales & Channel, Operations and Management

3

Supply Chain Planning, Order Management, and Execution

4

Manufacturing and Planning Management

5

Aftermarket Sales, Service and Support

7 1

2

3

4 5

6

7 Brand & Loyalty

Market requests

Demand information

Order status

Delivery information

Demand sensing/ shaping/

POS

Warehouse, Transportation and Logistics Management

6

Integration & Analytics

Human Resources

Finance

8

9

10

Oracle High Technology Industry Solu?ons Map

Concept to

Market

Campaign to Cash

Demand to Delivery

Corporate Services, Governance

Aftermarket & Customer Support, Services, & Sales

Enterprise Planning and Performance Management

Consumers

Customers

1

2

3

4

5

6

7

8

9

10 Build a responsive Supply Chain on INFORMATION

not inventory

Zero latency, real-time collaboration


Plantronics Value Chain Pla[orm

ASCP

iSUPPLIER


Project Methodology


Design Globally – Implement Locally

80/20 rule; Implement quickly, evolve quickly

No Customiza1ons – Work within the sowware

Sowware based re-‐engineering

Get to decisions quickly; avoid decision paralysis

PLT Resources available per required alloca1on to drive and par1cipate in project

Project par1cipants have real ownership to make decisions

“Self Service” project informa1on warehousing

Team environment – Win as a team, Lose as a team

Key Methodologies & Assump?ons


Keys to Success

"  Super users are critical "  Core team involvement and support is paramount "  Executive support is critical "  Change Mgt, Communication & Training are always underestimated

Process

People

Technology

People

Process

Technology

"  Process is the glue "  A bad process is even worse with the right technology.


Plantronics Secret

Example of a detailed Milestone plan


Plantronics Secret

Typical Project Members

Core Team Sponsor •  Director Supply & Demand

Project Leads •  Sr Manager Supply & Demand

Site Leads •  Director Materials Mexico Plant •  Planning Manager AEG Division •  Sr. Supply Chain Manager EMEA •  Director Sales North America •  Director Materials Clarity Division

Super Users •  Planning Manager EMEA •  Supply/Demand Analyst EMEA •  Sales Manager •  Sales Manager •  Forecast Analyst Clarity

Team Members •  Finance •  Finance

Team Members •  Finance •  Finance

IT Business Analyst •  Applica1ons •  Data Base (Technical)

Consul1ng Lead: •  Supply Chain Fusion

Oracle PMO Office


Plantronics Secret

Project Risks to Manage

Resistance to Change (not embracing new business processes/System)

“Jump Ship” mentality at the first sign of struggle

Compe1ng Departmental Interests (projects, etc.)

Scope Creep

Discipline to new processes

Availability of resources


Plantronics Secret

Key to Success – Knowing What's Ahead

Time

Efficiency

Growth & Competitive Advantage

Minimize adoption curve

“Weathering the Storm”

We must “weather the storm” and make it through the adoption phase.

Go-Live


Selec1on of the right “Project Owner”

Pick the right Partner

Eight quarters are less than 2!

Change Management • Communicate, Educate, Communicate

Go-‐live IS the beginning….resolve, stabilize, EVOLVE. • Set expecta1ons appropriately

Give yourself some buffer for the unexpected

Implementa?on Lessons Learned


Know Your Corporate Culture

Plantronics Secret

Systems

Business Process

Change Management

“When it comes to change management…if you get to the finish line first but you’re alone, you lose.”

John P. Kotter Harvard Business School Professor

“Solution Buy In” Infusion into the culture &

Education

“Analysis Paralysis” Complete Consensus driven

without trust & leadership


How do you drive change?

Vitamin versus An1-‐dote

Driving Change


By late 2008 / early 2009 we had fully deployed •  Mul1 Org ASCP •  Demantra Demand Planning •  GOP •  iSupplier •  Collabora1ve Planning •  Inventory Op1miza1on •  DBI

Began to see promising supply chain changes •  OTD improvements •  Less excess & obsolete •  Fewer air freight •  Inventory stabilized

Where are we?


The Great Recession


Plantronics Secret

The RECESSION

Global economic downturn

Worldwide recession

Goal is to maintain profitability

Plantronics taking ac1on •  18% layoff worldwide •  Execu1ve pay cuts •  Suspension of travel • Hiring freeze •  Close China factory •  Sell Altec Lansing •  Project cut backs


Plantronics Secret



Agile






Data Clean-up








Demantra S&OP





Jan-11



Plantronics Secret



Agile







Data Clean-up








Demantra S&OP





Jan-11



Plantronics Secret



Agile PC and PG&C







Data Clean-up





Demantra S&OP




Jan-11




GOP ROW


iSupplier ASN

Jan-12 Jan-13


Rapid Planning

Agile Quality?

R12 Upgrade


Recession impacted the posi1ve results we were expec1ng at this 1me of the project

The installed Oracle applica1ons allowed us to react to the changes quicker and beêr

Beêr informa1on – beêr decisions – beêr results

What did we do?

Supply Chain Ac?ons


Orders dropped 40%

Orders got cancelled

Some suppliers went bankrupt

Inventories of certain items increased

Some regions more troubled than others

Fewer people to do the work

U?lizing Oracle to Forge Ac?ons


Ability to review globally forecast vs. actual

Ability to drill down into problem products

Ability to drill down into problem regions

Quickly re-‐forecast and push back into Oracle

Single global view for all to see and understand

Single source of Truth

Demand Planning (Demantra)


High Level S&OP


Demantra

Forecast Entry


Demantra

Sales Analysis


Demantra

Drill Down into Excep?ons


Ability to understand global supply/demand picture

Ability to predict poten1al quarter ending inventory

Ability to monitor inventory daily

Ability to quickly shiw from make vs. buy

Take ac1on on oversupply situa1ons

Iden1fy future shortages and prepare

Understand factory u1liza1on make vs. buy

Global Supply Planning (ASCP)


Plantronics Secret

Planning Messages


Plantronics Secret

Horizontal Plan


Ability to communicate with suppliers in near real 1me

Ability to re-‐forecast new requirements

Ability to make changes quickly on exis1ng PO’s

Pushed VMI to reduce buyer work load

Expanded CVMI to reduce our inventory

Portals (iSupplier/Collabora?ve Planning)


Collabora?ve Planning

Order Forecast

Supplier can view the published order forecast details in the Ver1cal or Horizontal View

Order forecast

VMI Replenishment


Collabora?ve Planning

Supply Commit

Is the response given by the CM against the order forecast

Supply Commit


Ability to quote actual deliveries based on near real 1me planned supply informa1on

Ability to view global finished goods supply for maximum u1liza1on at 1me of order

More efficiency in our commit process

Order Management (GOP)


In spite of revenues dropping 40%, we are on track to remain profitable by reducing our cost structure 30%

In spite of an 18% lay off we are able to maintain customer service levels AND reduce inventories because we have the right tools

In spite of supplier turmoil we are able to ensure supply by quickly iden1fying trouble spots in our system

Result


Now What?


Focus on what you can influence

•  Demand sensing •  Inventory levels • Material cost

Build speed & flexibility into your Supply Chain •  Near real 1me planning; scenario planning •  Sourcing adjustments Make vs Buy •  Send the right signals quickly

U1lize the informa1on and make decisions…. Quickly •  Plan, execute, measure, adapt •  Prepare NOW for the future •  You get what you tolerate

What to Do In Tough Economic Times?


Plantronics Secret



Agile PC and PG&C







Data Clean-up





Demantra S&OP




Jan-11




GOP ROW


iSupplier ASN

Jan-12 Jan-13


Rapid Planning

Agile Quality?

R12 Upgrade


Plantronics Secret

Conclusion

Supply Chain Management is a very exci1ng profession

Ever changing

Essen1al to a companies success

Everybody needs it

Innova1on & Leadership

Those that do it best are among the most successful and profitable companies in the world •  Apple, Nokia, Wal-‐Mart, Procter & Gamble, Toyota, Cisco, Samsung, Best Buy, Coca Cola, Nike, HP, IBM


Thank You

Simply Smarter Communica1ons™

global’supply’chain’systems’&’strategy’ atplantronics’...

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