INTERNATIONAL SUPPLY CHAIN MANAGEMENT

Transcription

1 INTERNATIONAL SUPPLY CHAIN MANAGEMENT DR. THOMAS SCHACHNER SVP Global SCM & Purchasing / Grohe AG, Düsseldorf VP BVL Österreich, Wien Member of the Advisory Board / BVL e.v., Bremen Graz, May 2014

2 Straight development path ;-) WING 1996 c

3 GROHE Group at a glance GROHE Group key statistics 2013 Sales by product category bn sales Bathroom 29% 15% 1 sales CAGR ( ) 286m norm. EBITDA 20% norm. EBITDA margin ~50% of sales from emerging markets 2 Showers & Shower Systems 22% Kitchen Faucets 10% GROHE Professional 15% ~9,300 headcount Joyou 24% Actual to 2013 Actual sales CAGR includes effect of full consolidation of Joyou from 1 July 2011 onwards 2 Defined as Eastern Europe, Latin America, Middle East & Africa and Asia excluding Japan 3

4 Large and growing market three enduring and attractive megatrends fueling long-term growth of the sanitary market Enduring global mega trends Sanitary industry - large market with expected strong growth CAGR Urbanization Urbanization ~5% p.a. ~ 19.2bn ~ 15.5bn ~30% ~8% Lifestyle multiplier Lifestyle multiplier Asia Middle East & Africa Americas ~27% ~8% ~33% ~8% ~32% ~5% ~5% Water appreciation Water appreciation Europe ~32% ~30% ~4% Source: BRG Building Solutions, Global Water Technology Markets Estimate May Water technology market defined as the Sanitary Fittings Products and Sanitary Systems segments as defined by BRG Building Solutions 4

5 Value Upscale High-end Strong brand assets with differentiated and distinctive identities addressing different customer needs GROHE Group s brand positioning Key elements GROHE SPA: High-end solutions targeting affluent customers, 4-5 star hotels and high-class residential complexes GROHE: Highest-quality high-end and upscale products covering the biggest share of the global water technology demand GROHE Professional: Product and service line particularly tailored to the needs of installers and planners Joyou: Regional upscale products in emerging markets below GROHE; young value-brand proposition in developed markets Rational Emotional 5

6 Global expertise is key. However, GROHE sets its global product quality standards in Germany Design & Innovation Research & Development Production & Precision Engineering 6

7 GROHE Group: Continuous growth since 2009 GROHE Group Sales and EBITDA in in m; % Sales ( m) EBITDA ( m) GROHE Joyou 15% p.a. 17% p.a. 1,405 1, ,165 1,020 1,082 1, % p.a. sales growth driven by first time consolidation of Joyou from 1 st Jul 2011 onwards Resilient EBITDA margin, also during the financial crisis 20% in

8 Products und Components Big Mac Allure Brilliant 150 SKUs 400 components > production sites > 150 distribution centres > 10M tons/yr BOM / Rezept (in DEnglish) Bun Big Mac Beef Patty Salzgurken Eisberg Salat getrocknete Zwiebeln Cheddarkäsescheiben Sauce Big Mac Salz- und Pfeffermischung Verpackung SKUs components 9 production sites 7 distribution centres tons/yr Global Supply Chains BOM / Stückliste (in German) Messingkörper Zinkhebel Kartusche Strahlregler Messingauslauf Anschlussschläuche Zugstange Pop-Up Dichtungen Befestigungen TPIs Rosetten Verpackung 8

9 Magic Quadrants Supply Chain Sales > X Billion OTIF > 99% Logistics cost < Y% of Sales Inventories < Z days 9

10 A hypothetical internal Board Survey Question Answer 1 Do we want low inventories or high availability? Yes, for sure 2 Do we want low cost or high service levels? Absolutely Which of the four magic quadrants would you want to rather compromise Sales? Customer service levels? Inventories? Cost? No way need to protect top line No way need to protect customer satisfaction No way need to protect liquidity No way need to protect margins and bottom line or even 7 Quality? No way need to protect the customer and the brand 10

11 4 Key Elements of Global Supply Chain Management 1. Forecasting / S&OP 2. End to End Supply Planning 3. Performance Management 4. Order Management Product Flow Demand Flow Supplier Procurement Production Distribution Customer Information Flow Currency Flow 11

12 Bottom Up / Top Down Monthly Rolling Medium-Term Planning Horizon: 8 to 10 month Planning period: week Frequency: monthly Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W Orders on hand Service level S&OP process Alignment on Sales value & volume planning on design level PoD specific plan Production plan plants Special events Inventory planning Scheduling purchase parts / master contracts Capacity load plants (staff / facilities) Plant utilization Purchase parts Plant run rate EBITDA 12

13 Truly Global Manufacturing Platform with Nine Production Plants built on German Engineering Heritage Global manufacturing footprint Headquarters Production plant Mississauga (Canada) 6 Albergaria (Portugal) 4 1 Hemer Porta 3 Westfalica Düsseldorf Lahr Nan an Klaeng (China) (Thailand) State-of-the-art technology in all plants Flexible operations to shift demand across plants Clear specialization of each plant Fully integrated value chain GROHE manufactures with in-house central furnaces for brass production Cartridge Flush Valve Thermostat In-house production of high quality faucet engines and flush valves 13

14 Added-value Chain in Seven Steps 1 Sand core production 2 Central Melting 3 Casting / Forging 4 Machining 5 Grinding / Polishing 6 Plating 7 Assembly Result, e.g.: Allure Brilliant Watch also our production movie 14

15 The Global Grohe World (Sourcing Production Sales) is steered by an Integrated S&OP Process c Americas 80% of Global Volumes are consolidated in Central Warehouses in Germany c Chicago Hemer/ Porta Europe Moscow Asia Tokyo Shenzhen Middle East Mumbai Thailand Hemer (Germany) Lahr ( Germany) Porta Westfalica (Germany) Albergaria (Portugal) Klaeng (Thailand) Mississauga (Canada) Major GROHE internal distribution Distribution to customers GROHE DCs/inventory consolidation points 15

16 Finished Goods Inventory Reach Clusters Slow moving inventory X Excess group 4 Excess group 3 Excess group 2 Y c Excess group 1 Excess groups Stock reach < x days Product group M Product group M Supports current OTIF performance Covered Safety Stock Product group M Product group M Product group M Product group M Product group M Covered OOH total horizon Product group M Product group M Transit Value FG Inventory structure 16

17 Order Management c Daily Sales & Order on Hand Tracking 3 Requested orders 4 3:2 conversion rate target 2 Confirmed orders 1 Sales MTD 17

18 Transportation Cost 1 freight spend c / unit 2 billed weight 18

19 8 Further Considerations We didn t mention yet.. 1 Cross-functional incentives for Supply Chain KPIs e.g. Forecast Accuracy 2 Supplier and Customer Collaboration (mentally and technically) 3 Balanced score card purchasing (price / PPM / OTIF / viability) 4 Central global production scheduling 5 Standard ERP integration 6 Fly by the instruments, but also use pilot s experience 7 NT + OP = EOP 8 C mon, it s only taps ;-) 19

20 !!! VIELEN DANK FÜR DIE AUFMERKSAMKEIT!!! Q&A DR. THOMAS SCHACHNER SVP Global SCM & Purchasing / Grohe AG, Düsseldorf VP BVL Österreich, Wien Member of the Advisory Board / BVL e.v., Bremen Graz, May 2014