1 © the delos partnership 2003 integrated global strategic and operations planning process a formal...

1 © The Delos Partnership 2003

Integrated Global Strategic and Integrated Global Strategic and Operations Planning ProcessOperations Planning Process

A formal way of running the business


Global Strategic Operations PlanningGlobal Strategic Operations Planning

Objectives– Get one set of numbers– Resolve imbalances in Demand and Supply of all

resources• Manufacturing• Supply• Design• Cash

– Establish Teamwork– Implement Strategic direction


Customer Relationship StrategyCustomer Relationship Strategy

1. First Decide if you are Make to Stock or Make To Order2. Then work out the production plans

Inventory

Production

Make To Stock

Sales/Shipments

OrderBook

Sales Orders

Production/Shipments

Make To Order


Customer Relationship StrategyCustomer Relationship Strategy

Design

Purchase

Intermediate Manufacture

Sub-assemble

Finish

Distribute

WhereDo you meetTheCustomer ?

StockTo Order


Make to OrderMake to Order

Production = Demand Plan + (Current Order Book - Order Book Target)

= 70 + 75 - 50)

PRODUCTION ORDER BOOK


GSOPGSOP

-3 -2 -1

Demand Plan 20 20 20

Actual Demand 21 22 24

Difference 1 2 4

Cum Diff 3 7

Months 1 2 3 4 5 6 7 8 9

Last Demand Plan 20 20 20 20 20 20 20 20 20

New Demand Plan

Difference

Cum Diff

Months Q4 Q1

60 60

-3 -2 -1

Supply Plan 25 25 25

Actual Supply 20 19 21

Difference -5 -6 -4

Cum Diff -11 -15

1 2 3 4 5 6 7 8 9

Last Supply Plan 25 25 20 20 20 20 20 20 20

New Supply Plan

Difference

Cum Diff

Q4 Q1

60 60

-3 -2 -1

Order Book Plan 77 72 67

Actual 82 83 86 89

Difference 6 14 22

1 2 3 4 5 6 7 8 9

Last Plan 62 57 57 57 57 57 57 57 57

New Plan

Difference

Q4 Q1

57 57

A500xx Family : Units


Family SummaryFamily Summary

0

5,000

10,000

15,000

20,000

25,000

30,000

Euros

Sales Contrib

Sales/Profit

Financial Analysis

Budget

Previous

Current

Major ChangesNew Product included in ForecastTender for XYZ market included

Major AssumptionsNew product ratesWe Win XYZ TenderMaintenance programme completes on time

Major ThreatsCompetitor ABC brings in new product sooner

Decisions RequiredThird shift in Quarter 4 Investment of Eur 0.5 m in Additional capacity for New Product


WorkshopWorkshop

Review the information in the case study and come up with a

revised plan


Rough Cut Capacity PlanningRough Cut Capacity Planning

Objective– Translate SOP Family Volumes into Capacity Requirement– Test validity of plan against demonstrated capacity

How– Use Planning profiles– Use Critical Resources– Use Demonstrated Capacity

Result– Possible problem areas


Rough Cut Capacity PlanningRough Cut Capacity Planning

RequiredCapacity

DemonstratedCapacity

Family Volumes x

Rate per hour

Family Volumes x

Rate per hour

Actual ProductionPer month

Actual ProductionPer month

CriticalResources


Rough Cut ProfileRough Cut Profile

Key Resources

Units Families

A B C D E F

Forging Supplier Units 2 4 4 2Machining Hrs 12 14 20 5 10Quality Assurance Hrs 3 5 3 10 7 2Plating Hrs 2 5 1 6Assembly Hrs 4 7 2 5Test Hrs 3 7 9 2 5

Hours per 000 units


RCCP Planning ResultRCCP Planning ResultMonth 5Month 5

Key Resources Required Production Volumes

Capacity

A

22

B

20

C

35

D

10

E

15

F

15

Req Dem Max

Forging Supplier

Machining

Quality Assurance

Plating

Assembly

Test


RCCP Planning ResultRCCP Planning ResultMonth 5Month 5

Key Resources Required Production Volumes

Capacity

A

22

B

20

C

35

D

10

E

15

F

15

Req Dem Max

Forging Supplier

44 80 40 30 194 200 300

Machining 264 490 200 75 150 1179 1000 1200

Quality Assurance

66 100 105 100 105 30 506 500 750

Plating 40 175 10 90 315 280 320

Assembly 88 140 70 50 348 500 550

Test 66 140 315 20 75 616 580 696


Global S & OP ProcessGlobal S & OP Process

To gather information an GS&OP needs– Formal process for inclusion of data– Time for analysis of information– Discussions to get to conclusions– Timely acquisition of information


Delos Business ModelDelos Business Model

Strategy

PrioritisationPrioritisation

Changes

Vision

Demand Supply

Support


Integrated Business PlanningIntegrated Business Planning

Week 1 Week 2 Week 3 Week 4

Strategy

Prioritisation

Prioritisation

Ch

ang

es

Vision

Dem

and

Su

pp

ly

Su

pp

ort


Strategic Operations PlanningStrategic Operations Planning

AACCTTIIOONN

AACCTTIIOONN


InnovationReview

InnovationReview

CustomerDemandReview

CustomerDemandReview

SupplyPlan

Review

SupplyPlan

Review

PriorityReview

PriorityReview

STAGE 1STAGE 1

STAGE 2STAGE 2

SeniorTeam

Review

SeniorTeam

Review

STAGE 5STAGE 5

STAGE 6STAGE 6

STAGE 4STAGE 4STAGE 3STAGE 3


Need for Global Strategic Operations Need for Global Strategic Operations PlanningPlanning

LOCAL/COUNTRY

Customer’sExpectations

REGIONAL/SECTOR

GLOBAL

ManufacturingEconomics

ResearchCosts

Financing

Competition

LEVEL 1

LEVEL 2

LEVEL 3

NationalGovernmentRequirements


Multi-site SOPMulti-site SOP

In a multi-national organisation

• Each site needs common processes

• All sites need aggregation– At right level

• Requirement for common performance measures


Where do the main processes Where do the main processes occuroccur ? ?

InnovationCustomer

Relationships

SupplyManagement

FinancialPriorities

StrategicReview

LEVEL 1Customer/Country/Market

LEVEL 2Region/Country Grouping/Business Sector

LEVEL 3Region/Global


Multi-Level Strategic Operations Multi-Level Strategic Operations PlanningPlanning


DemandPlanning

DemandPlanning

DemandPlanning

DemandPlanning

DemandPlanningCustomer

New ActivityReview

Innovation

Innovation

SupplyReview

SupplyReview

SupplyReview

SupplyReview

FinancialPriorities

ConsolidatedRecocniliation

FinancialPriorities

CorporateReview

SeniorTeam

Review

GLOBAL

LOCAL

LEVEL 1Country/Market

LEVEL 2Region/Business

Unit

LEVEL 3Europe/

Global HQ


TOP LEVEL GS&OP TOP LEVEL GS&OP PROCESS PROCESS DIAGRAM:DIAGRAM:

GlobalInnovation

CustomerDemand

Supply Priority Senior Team


LEVEL 1

Country

LEVEL 2

Business

Unit

LEVEL 3Global

R&T

3x BU Demand

Site (x6)Demand

CSDemand

PriorityBy

Site (x6)

PriorityBetween 3 BU/CS

SNRTR

Op’sInnovation

2nd week of month

GlobalPlanning

PriorityWithin

3 BU/CS

3 meetings:M-DT/B/G Programme

Innovation(x3)

Innovation

@Sites (x6)

GlobalPlanning

SupplyPlanning

By Site (x6)


Top Level GS&OP Cycle:Top Level GS&OP Cycle:

M T W FT1

5 6 7 8

12 13 14 15

19 20 21 22

26 27

Calendar Month 1

2

9

16

23

28 3029

M T W FT62 3 4

139 10 11

2016 17 18

2723 24 25

30

Calendar Month 2

5

12

19

26

31

SNRTR

PriorityBetween 3 BU/CS

PriorityWithin

3 BU/CS

SupplyPlanning

By Site (x6)

3x BU Demand

3x CSDemand

Global

Planning

SNRTR

PriorityBetween 3 BU/CSGlobal

Planning

PriorityWithin

3 BU/CS

Priority By Site (x6)

R&T

ProgrammeInnovation

(x3)

Op’sInnovation

GlobalPlanning


SupplyPlanning

By Site (x6)

3x BU Demand

Site (x6)Demand

3x CSDemand

ProgrammeInnovation

(x3)Innovation

@ Sites (x6)

GlobalPlanning


Op’sInnovation

R&T

Global

Planning

Site (x6)Demand

Innovation@ Sites (x6)


WorkshopWorkshop

• Consider differences between today’s way of working and the suggested ways of working

• Identify what will need to change

• Identify issues in getting changes to happen


Global Strategic and Operations Global Strategic and Operations PlanningPlanningSummary

– One set of numbers– Teamwork– Manages the constant change– Rolling Business Plan– Replaces Roll – in due course !– Sound basis for decision making

1 © the delos partnership 2003 integrated global strategic and operations planning process a formal...

Documents

new productchart12520024125

new plan2

budget contribution

clt time fence220031st

stockto ordermake

investment of eur

diffe difference

additional capacity