Demand Driven Supply Network A Consumer Goods Client Case Study Speaker: Chris McDivitt, Capgemini
What is Demand Driven Supply Network (DDSN)? A system of integrated technologies and business processes the provides the ability to develop, sense and prioritize various demand streams and initiate profitable supply across an optimized network of customers and suppliers. This Client case of Global Consumer Products company had a set of typical and unique supply chain challenges with some high expectations of developing a world class supply chain. Their journey of deploying a DDSN solution resulted in being Awarded in 2010 for Best In Solution Innovation
What supply chain business issues was the Consumer Products company facing? Client Profile: Global Consumer Products company 50,000 people at 300 locations in North America, South America and Europe. Examples of Products include bathroom tissue, paper towels, napkins, and paper cups Supply Chain team had been using Demand and Supply Planning Optimization tools for over 10 years across 3 Business Units Situation: Current systems and business process were not integrated and did not provide the required functionality to operate in increasingly complex environment. Inability to accurately forecast the business (especially for promotions) led to poor customer service levels and excess inventory to address short-lead time customer order adjustments Lack of inventory visibility required excess buffer inventory to be carried Poor integration, current systems required duplicate entry and aggravated the lack of coordination Demand Planning, Deployment and Master Production Scheduling Process were not consistent across business units that lacked streamlined KPI s to achieve inventory goals
Key business objectives to get to a world class supply chain Greater Demand and Supply processes and system integration Improved collaboration internally with customer service and sales associates on promotions and market intelligence Proactive, forward-looking demand planning processes and capabilities vs. historical analysis and model tuning An agile, flexible and responsive Supply Planning Capability and Network that allows them to react quickly to changes in both consumer and customer demand Centralize their MPS planning process while decentralizing Finite Scheduling and Material Planning at the plants Exception management processes and tools to allow greater focus on analysis and less emphasis on data gathering What-if analysis capabilities that allow planners to model scenarios so that Production Planners and Schedulers can make better, more optimized decisions Enhanced reporting capabilities that provide greater insight into business performance with aligned KPI s to enhance collaboration between functions and drive improved profitability
The DDSN Solution Framework that was deployed DDSN provides an integrated platform with ability to develop, sense and prioritize various demand streams and initiate profitable supply through an optimized network.
Key Business Process DDSN Enablers Consensus Demand Planning process to create a one number unconstrained demand plan for running the business: Demand Classification Auto-Statistical Algorithm & Parameter Assignment Sales, Marketing and Business Team collaboration Customer collaboration- POS and inventory levels at their DCs and Stores Demand Sensing adapts the weekly forecast with the actual customer order data on a daily basis to ensure dynamic response of the changed demand signals Auto identifies promotional orders to more accurately consume forecast using proration and consumption rules Greater S&OP enablement with new single enterprise wide hierarchy Total Demand and Inventory visibility and roll-ups across all businesses Standardized KPIs reporting and improved Sales/Demand business intelligence Intra-Day Production Planning and Scheduling
Key Demand & Supply Planning Capability Enablers
Business Value Achieved Results they have achieved to differentiate from the competition Operating a world class supply planning organization with the latest leading practice supply chain optimization applications results in providing improved order fill rates to retail partners while holding lower overall inventory and reducing manufacturing costs. Benefits from a customer standpoint Improvements in Forecast Accuracy, Production Scheduling, Compliance and Deployment Planning have resulted in a Fill Rate improvement. As a result, customers have experienced fewer stock-outs for regular and promoted products. Estimated measurable benefits Improved Forecast Accuracy by 4% Reduced Finished Goods and WIP Inventory by 3% Reduced Changeovers and Manufacturing Costs by 4% Lower Transportation and Distribution Spend by 6% Improvement in Overall Planning Efficiency by 15%
Solution Deployment Approach Business Case Developed Value mapped to process changes and new capabilities Formal Software Selection (SAP vs. JDA) SI Selection Heavy emphasis on Thought Leadership, Project & Change Management US Implementation over 15 months Demand Planning Go Live all BUs, 2 month lag the individual BU Supply Planning roll outs US success lead to EMEA transformation
Key Success Factors and Learnings Leading Practice Business Processes Set The Foundation Strong Business Case and Measure Results Solution Adoption Change Management Tactics deployed during Implementation Client Leadership Alignment and Support Software Vendor Involvement Role Based Process Training
Questions? Chris McDivitt Vice President, Capgemini Supply Chain Cell: 571-213-6375