Industry examples of Camelot LEAN Supply Chain Planning

Transcription

1 Walldorf, April 3 rd, 2014 Industry examples of Camelot LEAN Supply Chain Planning Patrick Wolf Value Chain Excellence. Strategy to Results.

2 Industry examples of Camelot LEAN Supply Chain Planning Agenda 1 The challenges of the VUCA world 2 Industry examples of LEAN Supply Chain Planning 3 Outlook Slide 2

3 Industry examples of Camelot LEAN Supply Chain Planning Agenda 1 The challenges of the VUCA world 2 Industry examples of LEAN Supply Chain Planning 3 Outlook Slide 3

4 The LEAN Supply Chain Planning paradigm The VUCA world describes today s supply chain challenges which need to be managed to ensure competiveness VUCA Volatility Demand and supply volatility due to rapid and dynamic changes Uncertainty High variability goes along with less predictability Complexity Globalization, M&A and increased number of product variants lead to complexity Ambiguity Fragmentation of planning processes and isolated planners result in lack of clarity Traditional supply chain planning approaches cannot handle the VUCA world Slide 4

5 The LEAN Supply Chain Planning paradigm Instead of trying to improve existing planning approaches LEAN Supply Chain Planning changes the current planning problem Challenges of supply chain planning in a VUCA world Weak focus on customer due to unreliable forecasts High inventories and capacity slacks due to supply chain nervousness Weak coordination increases costs and lowers responsiveness How to solve these challenges Try to further improve current planning approaches by more detailed planning and improving forecast accuracy Change the current planning problem itself Myth of forecasting LEAN Supply Chain Planning Slide 5

6 The LEAN Supply Chain Planning paradigm Key elements of LEAN SC Planning concern both the production and the replenishment side Replenishment signal Order Production Material supply Finished Product Inventory Customer Products on an asset are scheduled in the same optimized sequence, with leveled production volumes, identically in every cycle The replenishment decisions are based on simple rules, purely consumption driven, aligned with production Slide 6

7 The LEAN Supply Chain Planning paradigm LEAN SC Planning addresses the pain points in today s supply chains efficiently Forecast-based push Consumption pull Rhythm Wheel Bullwhip effect causes instability & increases inventory buffers Order signal demand Order signal demand Pull consumption with decoupling of demand and production Inventory Capacity usage Instable capacity utilization Capacity usage Inventory Leveled capacity utilization through active usage of inventories A Cycle time Long and volatile cycle times Cycle time C B C B A A B C A B C Tactical parameter driven planning with end to end synchronization Slide 7

8 Industry examples of Camelot LEAN Supply Chain Planning Agenda 1 The challenges of the VUCA world 2 Industry examples of LEAN Supply Chain Planning 3 Outlook Slide 8

9 Industry examples of LEAN Supply Chain Planning Industry cases - overview I II Industry Biotechnology Pharmaceutical industry Company Footprint Footprint Global Global LEAN SC Planning Key challenge elements Substantial change over times Unstable production patterns LEAN SC Planning Key challenge elements Rhythm Wheel Pull replenishment, Rhythm Wheel Project duration 4-5 months 6-9 months Slide 9 Camelot 2014 Patrick Wolf, Anna Fitzer

10 Industry examples of LEAN Supply Chain Planning Background company profile 1 Company profile Key facts Industry: Biotechnology Revenue: $1.300 Mio (2013) Employees: Headquarter: Germany Network Supply chain: Global locations & customer in over 100 countries Product groups Diagnostics Analysis Customer applications Molecular Diagnostics Applied testing Pharmaceuticals Academia Slide 10

11 Industry examples of LEAN Supply Chain Planning Customer s situation 2 Project overview Challenge Nervous production High degree of changeover time High intermediate inventory stock Line allocation of products Approach Rhythm Wheel concept Synchronization of packaging & filing stage Benefits Stabilized production Reliability & transparency of production schedule Changeover optimal sequence Service KPIs Asset Inventory Slide 11

12 Industry examples of LEAN Supply Chain Planning For the filling lines we implemented the Rhythm Wheel concept to schedule production in a repetitive sequence with leveled production volumes 3 LEAN SC Planning design element Rhythm Wheel Design Rhythm Wheel Schedule Changeover time Production time A A Cycle time E F A B C B C Cycle time D C B The Rhythm Wheel Schedules production on a single line/piece of equipment with multiple products Optimizes the production sequence by changeover criteria Repeats the production sequence over and over again in a given cycle time (approximately the same time to get around the wheel each cycle) Levels production quantities over time D E F D E F Slide 12

13 Industry examples of LEAN Supply Chain Planning Our customer was looking for a solution for improving production planning & synchronizing filling with packaging line 4 LEAN SC Planning - solution element Filling lines Packaging line Inventory SKU s: > 100 Rhythm Wheel SKU s: 6 Rhythm Wheel Heijunka SKU s: 8 Rhythm Wheel Slide 13

14 Industry examples of LEAN Supply Chain Planning We achieved substantial improvements in inventory by synchronizing production lines with the help of the Rhythm Wheel concept 5 Benefits Category Description Capacity % Increased capacity utilization Reduced changeover costs by 20% Inventory - 35 % Higher predictability of production schedule Synchronization of filling and packaging line Customer Service 0 % Same service level at lower inventory levels Slide 14

15 Industry examples of LEAN Supply Chain Planning Background company profile 1 Company profile Key facts Industry: Revenue: Pharmaceutical $26 billion Network Employees: Headquarter: Supply chain: United Kingdom Over 100 sites & inventory points on 6 continents Product groups Cardiovascular & metabolic Neuroscience Gastrointestinal Oncology Respiratory Infection Customer applications Hospitals OTC Pharmaceutical wholesaler Slide 15

16 Industry examples of LEAN Supply Chain Planning Customer s situation 2 Project overview Reduced margins Challenge Unstable production patterns High number of product variants Approach Dedicated product lines Rhythm Wheel production concept Pull replenishment Benefits Stabilized capacity utilization Increased capacity utilization Reduced inventory -20% Service KPIs Asset Inventory Slide 16

17 Industry examples of LEAN Supply Chain Planning The pull replenishment concept is simple and follows basic rules 3 LEAN SC Planning design element Replenishment signals Max PharmOps Lead time Cycle stock In-transit stock Safety stocks Affiliate Inventory Re-order point Min Inventory level Replenishment quantity Time When: Only when needed (Pull) How much: Necessary quantities aligned with production capacities Active usage of safety stock Adaptation of safety stock to variability Slide 17

18 Industry examples of LEAN Supply Chain Planning Pull replenishment concept is both supported by Camelot's SPO & by SAP APO 4 LEAN SC Planning - solution element Parameterization with SPO Stock Parameter Optimization (SPO) is an integrated solution for calculation of optimal inventory parameters Replenishment planning with SNP IRL based planning in APO Supply Network Planning based on parameters provided by SPO Strategic planning Tactical planning Operational planning Parameterization Planning Slide 18 Camelot 2014 Patrick Wolf, Anna Fitzer

19 Industry examples of LEAN Supply Chain Planning We achieved substantial improvements in by aligning replenishment policies with rhythm wheel cycles 5 Benefits Category Description Capacity % Stabilized capacity utilization Simplified production planning (less scheduling effort) Increased capacity utilization Inventory - 20% Reduced inventory by 20% Increased stock turn-over from 5,1 to 5,8 Customer Service +1,7% points Increased service level from 98.2 to 99.9 Slide 19

20 Industry examples of Camelot LEAN Supply Chain Planning Agenda 1 The challenges of the VUCA world 2 Industry examples of LEAN Supply Chain Planning 3 Outlook Slide 20

21 Outlook LEAN SC Planning is the consequent, future approach to tackle the requirements of the VUCA world Camelot has developed a publication on LEAN SC Planning with the concentrated knowledge of: Industry thought leader companies Acknowledged universities Recognized IT researchers & developers Camelot has recently won the IT Innovation Award 2014 for its LEAN Suite: Innovative IT solution Awarded out of 5000 applications SAP AG hereby confirms that the ABAP interface software for the product Camelot LEAN Suite 3.0 of the company Camelot ITLab GmbH has been certified for integration with SAP NetWeaver 7.01 Slide 21

22 Outlook If you want to assess your SC readiness for the VUCA run a workshop with the Camelot SCM experts Slide 22

23 Contact Camelot Management Consultants Walldorf, April 3 rd, 2014 Patrick Wolf Partner Camelot Management Consultants AG Theodor-Heuss-Anlage 12 Mannheim, Germany Tel: Fax: pwo@camelot-mc.com Slide 23 Camelot 2014 Patrick Wolf, Anna Fitzer