Building an Internal Supply Chain Design Competency with External Support. June 19, & CHAINalytics. Presented by:

Transcription

1 Building an Internal Supply Chain Design Competency with External Support June 19, 2013 Presented by: & CHAINalytics

2 About Energizer Holdings, Inc. Consumer goods company operating globally in the broad categories of household and personal care products. With commercial and production operations in 50 countries and distribution in more than another 110, the company markets its products throughout most of the world. In little more than 11 years, Energizer has transformed itself from a battery company with $1.9 billion in annual sales to a diversified consumer goods company with more than $4.6 billion in sales. 2

3 3 About Chainalytics A recognized leader in supply chain intelligence, analytics, and advisory services, Chainalytics uses a unique combination of best practice knowledge, exclusive benchmarking research, and advanced decision sciences tools and techniques to empower fact-based decision making across the supply chain. Supply Chain Design Transportation Sales, Inventory, and Operations Planning Logistics Operations Service Supply Chain Packaging Optimization BY THE NUMBERS 2001 Founded 500 Engagements Delivered 300 Unique Clients Served 100 Employees Worldwide 10 Years on the 100 Great Supply Chain Partners List 8 Team Members Named Pros-to-Know 3

4 Agenda Background on Energizer s SC Analytics Team In-Sourcing Supply Chain Network Optimization Success Story: How the In-House Competency Made the Difference Keys to Establishing a Sustainable Internal Competency 4

5 Background on SC Analytics Team Decision to further expand emphasis in Analytics Decision to in-source tool-based SC Opt and Modeling; Engaged Chainalytics for tool selection support Selected Guru; Engaged Chainalytics for competency development services Joint analysis NA Disnet project, followed by additional implementation analysis by Analytics Team Analysis Areas Cost-to-Serve Continuous Cost Improvement SC Network Opt More

6 Why In-Source SC Optimization? Increasing Complexity Realization that spreadsheets were no longer sufficient nor efficient to perform the desired analyses, and optimization modeling tools were needed Growth and Strategy Company on a growth path over time which increased likelihood and frequency of need for SC Network Optimization analyses Visibility and Confidence Prior 3 rd party executed studies left Energizer without understanding of trade-offs, and without ability to iterate thru implementation considerations 6

7 Considerations of Using Outside Support to Fast-Track the Effort Speed vs. Spend Is it worth it? Timing & Transition When to run on your own? Tool vs. Methodology Where do you need support? 7

8 Energizer Success Story Jointly-executed initial analysis Utilizing Chainalytics proven methodology (20-30 SCD/year!) Best practice data validation, processing, and preparation Use of Chainalytics' FMIC for transportation rates where needed 100+ scenarios and sensitivities analyzed More realistic cost and capacity modeling than prior analyses Then Chainalytics left INITIAL ANALYSIS SCENARIO TREE 8

9 Energizer Success Story and the inevitable questions came Incorporation of sourcing changes not in history Continued concern around fuel and transportation cost Different stocking strategies for certain business lines Variations in cost and capacity step-functions and modeling Transition planning and overall financial justification for change ADDITIONAL ANALYSIS 300+ Scenarios STAKEHOLDER BUY-IN 9

10 Key Takeaways Confidence in Results Process allowed the organization to be comfortable with the recommendation of the analysis despite a different network outcome Direct result of in-house ownership and deep understanding of the analysis, modeling, methodology, and tool Benefits of In-Sourcing In contrast to prior studies done by 3rd parties, the in-house competency and best practice methodology enabled the team to respond to concerns and additional real life implementation considerations at a level not previously possible without additional external spend 10

11 Key Takeaways Better Understanding of Network Drivers Deepened corporate understanding of top drivers of network configuration and total landed cost trade-offs Example: Inbound transportation identified as very impactful for this refresh of the analysis, stemming from acquisitions and sourcing changes in recent history and modal opportunities going forward Increased Visibility of Analytics Raised profile within the organization, becoming even more trusted as a source of strong analytics for the business functions to leverage Now tapped with even more work victims of our own success! 11

12 Considerations of Using Outside Support to Fast-Track the Effort Speed vs. Spend Is it worth it? Timing & Transition When to run on your own? Tool vs. Methodology Where do you need support? Phase 1 Collaborative Analysis Phase 2 Project Hand-off Phase 3 On-going Analysis 12

13 Profile Click of Successful to edit Master Internal title style Groups As in Energizer s case, internal teams can be highly successful Successful internal groups share several characteristics Initial External Support Dedicated Resources Cross-Functional Network Strategy Focus Executive Support 13

14 Use a Click Consulting to edit Partner Master title to Get style Started Partner typically heavily involved in the first studies, then advisor role while the team climbs the learning curve Brings experience and best practices for end-to-end process design Data collection and validation strategies Model design and troubleshooting Reporting and analysis techniques User training Entire process, not just the software Once team is established, partner provides incremental capacity and ongoing best practices 14

15 Several Dedicated Resources are Required Click to edit Master title style to Maintain On-going Internal Competency Firms that are highly effective at maintaining an in-house network design competency do so with teams of 3+ dedicated resources Four out of five companies that dedicate a team of 3 or more are able to maintain the capability in-house These firms are typically large ($10B+ in revenue) Team of 1-2 resources are much less likely to sustain competency Only one in five firms that establish teams of 1 or 2 maintain the capability beyond the first or second use Skills are specific and easily lost in turnover, promotions, etc. Practice stagnates as resources have no peers or mentors to foster development of tools and methods Provide mentoring, development, and career paths within the group 15

16 Cross-functional Experience and Click to edit Master title style Representation is Critical Need buy-in from all departments Provide inputs Trust and implement the results Need people who function well across all departments to highlight impacts of network decisions on all affected departments Avoid Ivory Tower decision-making 16

17 Focus Click the to Team edit Master on Network title style Strategy Part-time roles are less effective Easy to procrastinate strategic decisions in favor of handling immediate crises Limit distractions of other responsibilities 17

18 Strong Executive Support is Critical Click to edit Master title style to the Team s Success Executives must see strategic planning as a critical process Executives must take an active role in process Executives must set the organizational priorities that enable the other key criteria Executives are able to take a broad view across functional silos with competing agendas Clear hurdles Data Resources Organizational resistance Budget (training/services/software) 18

19 Questions? Betsy Lancaster (314) Ben YoKell (678)