innovations in manufacturing supply chain - jda software mfg... · one physical supply chain with...

Innovations in Manufacturing

Supply Chain

Alex Yap

Senior Director, Manufacturing Strategy, APAC

Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL

New Customer Expectations

2 SOCIALIZE

CUSTOMIZATIONS VISIBILITY

RESPONSIVNESS

SELECTION VALUE ADDED SERVICES


Manufacturer & Wholesale Distribution Challenges

Growing Demand Volatility Supply Chain Complexity

Commodity Volatility

Accelerated Innovation

Volatile Energy Costs

Personalize Everything Escalating Expectations

Increased Supply Chain Risk

3

Geo-Political Uncertainty

http://www.theurbn.com/2010/10/global-networks-accelerate-commerce/2010-07-30_2252-300x271/


Required Transformations in Manufacturing & Distribution

Independent

departmental

plans that

leverage regional

networks only

A “one size fits

all” supply chain

model

Periodic planning

processes that are

disconnected

from daily execution

Multiple supply

chain models to

profitably service

diverse business

segments

Agile business

processes that connect

planning to execution

FROM

Go to market

strategies to

customers “In-Mass”

TO

Customer centric

strategies supported by

tailored product

offerings and programs

Integrated plans

optimized across

a global network

B

A

D

C


• Embrace Customer Centricity

• Differentiate Service Through Segmented Supply

Chains

• Design for Business Agility

• Drive End-to-End Synchronization

• Leverage Advanced Optimization

Key Success Factors


Manufacturing Organizations are Silo’ed

and Disconnected from their Retailers

Cross functional team data not formally integrated into corporate supply chain planning

Corporate planners still rely on shipment/order history as primary input to demand plan

POS is shared but is insufficient in isolation to drive a shift to a Demand Driven Supply Chain

Supplier Collaboration Board – 10/12/2011 JDA Software Group. Confidential

Manufacturers Retailers / Franchisees


Supplier Factory Manufacturer DC Retail DC

Shipments Production Orders

Procurement Orders

Assortments POS Sales

DC Withdrawals

Customer Orders

Store

JDA’s Shelf-Connected Solution is

Driving Significant Benefit

Point of Sale

Manufacturing Supply Chain

S&OP

Raw

Material

Planning

Demand

Planning

Replenishment

Planning

Order Promising & Transportation

Production

Planning &

Scheduling

Predictive

Shelf

Analytics

Store

Forecasting Assortment

Management

Local Assortments

Planogram

Management

Promotional

Planning

Shelf-Driven Supply Chain Plans &VMI

Orders

Retail

Supply Chain

Network, Sourcing and Inventory Optimization

Store Driven Plans & VMI Orders

JDA DSR Enterprise Foundation

Collaborative

Planning

JDA Supply Chain Enterprise Foundation


Exceptions Managed at

the Appropriate Level of

Granularity

Demand Plan

Published in a Single

Demand Repository

Automated Sales

Cleansing Scalability & Intelligent

automation

Varying forecasting models

with empirical adjustments

Exception management at

aggregate levels

Flexible hierarchy and attribute

group aggregations and

disaggregations for demand

synchronization

Single demand repository for

all analytics and planning

Managing to the Granularity of the

Shelf

Store

Forecasting

Demand Plan

Developed and

Synchronized across

Hierarchy Levels and

Attribute Groups

Automated Selection

and Tuning of

Forecasting Models


Cluster Assortment

Recommendations

Planogram

Assortment & Space

Recommendations

Planograms Updated

Shelf Quantities by

Store to Fulfillment

Demand Forecast

Developing Demand Driven Local

Assortments

Forecasts by product/store

Store clusters based on consumer

preference for product

Demand driven assortment

recommendations by cluster

Planogram ranges optimized to

future demand

Shelf quantities by time-

period/product/store available for

fulfillment planning

Assortment

Management Planogram

Management

Optimized Local Assortments


Accurate, Time-Phased, Multi-Echelon

Replenishment Plans Driven from the Shelf

Top Tier Retail

Customers

• POS

The Drivers of an Accurate Shelf-Driven Plan

• Store forecasts

• Store inventories

• Shelf requirements

• Promotional lifts

• Promotional shelf

requirements

• Delivery schedules

to the store

• Replenishment

strategies

Accurate Demand

Signals

Account

Demand

Plan

• Store order forecasts

(demand)

• Direct shipment forecasts

(web, catalogue)

• DC inventories

• Receipt schedules

• Replenishment strategies

• DC capacity constraints

• Transportation

constraints

• Flow strategies

Accurate Demand

Signals

Distribution

Planning

Production

Planning

Retail Distribution Manufacturing

Eliminates the Bullwhip

Effect

Provides The Foundation for:

Cross-enterprise cost efficiencies and cycle time reductions

Significant reductions of total network inventories

Effective joint top line growth and market share gains

The move toward joint supply chain P&L’s

Shelf-Driven

Supply Chain

Plans &VMI

Orders



• Differentiate Service Through Segmented Supply Chains




Key Success Factors


“One-Size Fits” Supply Chains are Passé – Segmentation is the Name of the Game

Key direction

One Physical Supply Chain with Multiple Virtual Supply Chains tied

to different ways of servicing the Customer

JDA Point of View

Execution

orchestration

(S&OP)

Strategy (policy)

orchestration

If we can match the need of a differentiated customer in supply chain to a

given product at a given time, tremendous value can be realized

Distributor DCs

Dealer DCs

Store

Consumer

Manufacturer DCs Plants Suppliers Contract

Suppliers

Demand Classification / Differentiated

promising policies

Differentiated inventory policies

Differentiated fulfillment

policies

Differentiated manufacturing

modes

Differentiated sourcing policies


Makes complex, configurable products sold through a dealer channel

Dealers Assembly T1 T2 Engineering

Push Pull

Push Pull

Pull Push

Pull

Customer Value Proposition (LT=lead time; P=price;

O=options) Strategies

MTS, 3-4 pre-

configured packages

MTO, 20 pre-

configured packages

with limited changes

MTO, ala-carte

configuration

ETO, ala-carte

configuration with

engineering changes

LT: 2 weeks

P: $

O:

LT: 10 weeks

P: $$

O:

LT: 16 weeks

P: $$$

O:

LT: As quoted

P: $$$$

O:

Example: Industrial Customer

Differentiated Supply Chain


• One size fit all inventory policy

Design Appropriate Fulfillment Strategies

Pull – Replenish to DC

Built To Stock / Forecast

Margin based

Risk / Reward Analysis

• Different products/SKUs require segmented approach to inventory policy

0

0.5

1

1.5

2

Brand A Brand B Brand C Brand D

Safety Stock Week

Safety Stock Week

0

0.5

1

1.5

2

2.5

3

95%

accuracy

85%

accuracy

60%

accuracy

50%

accuracy

Safety Stock Weeks

Manual Method Statistical Method


Path to “Optimize” Inventory

Service Level Current Svc Lvl

Future Svc Lvl

Original Inventory Service Level

Graph

Inve

nto

ry L

eve

l

As-Is Inv Lvl

Improvements achieved via

algorithmic calculations

Improvements achieved via

sigmentation strategy

Improvements achieved via supply chain strategy (e.g.

postponement)

To-Be Inv Lvl

Achieved via PDCA


Business benefits tied to segmented SCM

Key Benefits Business Objectives

Meet contractual obligations Lead Time & Forecast for Direct customers

Offer differentiated lead time Different lead times for segments

Provide stability in commits Segment based commits

Manage Fin targets: Inventory Commit to the Right Inventory for different

segments

Synchronize operations Less expedites & escalation

Scalability & Efficiency Planner productivity/efficiency w/ Growth

System scalability

Better contingency planning on capacity and

inventory by What-if scenario analysis at the

level of different segments

Improved customer service by considering

segment objectives

Improved delivery performance to customer

request dates by appropriate response buffer

for different segments

Lower obsolete/unused inventory by generating

granular forecast; enabling postponement

strategy

Ext

ern

al E

xpec

tati

on

s In

tern

al E

xpec

tati

on

s



• Differentiate Service Through Segmented Supply Chains




Key Success Factors


INTEGRATED BUSINESS PLANNING (S&OP)

OMNI CHANNEL DEMAND MANAGEMENT

INTEGRATED ENTERPRISE DEMAND PLAN

MASTER DATA & WORKFLOW MANAGEMENT

ENTERPRISE MONITORING, VISIBILITY & ANALYTICS

Store Clustering

Macro-Space Planning

Assortment Planning

Micro-Space Planning

Promotion Management

Trade-Fund Management

Store Virtualization

Category Analytics

Enterprise Project Planning

Order Promising

Distribution Planning

Network & Inv Optimization

Replenishment & Allocation

Master Planning Production Scheduling

Supplier Management

Warehouse Management

Transportation Modeling

Transportation Planning

All Channel Commerce

Procurement & Contract Mgmt

Workforce Management

Transportation Execution

Customer Engagement

CUSTOMER & SUPPLIER COLLABORATION

JDA Manufacturing Solutions


Planning to Execution

19

Demand, Demand

Class, Collaborate,

Supply Chain

Strategist

Inventory

Optimization

Sales & Operations

Planning

Fulfillment, Order

Optimization

Master Planning,

PSO, Supply Chain

Planner, SA

Factory Planner,

Sequencing, Order

Sequencing &

Slotting

Order Promiser

Long Range

Demand Planning

Strategic Network

Design

Portfolio

Segmentation

Medium Range

Consensus Demand

Plan

Tactical Inventory

Planning

Distribution

Requirements

Planning

Master Production

Planning

Deployment

Planning

Available to Promise Allocation

Order Promising

Factory Planning &

Scheduling

E

R

P

/

W

M

S

/

T

M

S

/

M

E

S

Executive S&OP Operational S&OP

Strategic Inventory

Planning

Hours Shifts Days Weeks Months Quarters Years

1. Long Range

Demand Plan

2. SC Network 3. Micro-

Segments 3. Segmented

Inventory Policies

5. Forecast

4. Long Range Demand Plan

6. SKU level Inventory Targets

8. Unconstrained

Planned Arrivals 10. Constrained

Planned Arrivals

11. Production

Orders 9. Work In Progress

Plans

12. Available-

to-Promise

19. Recommended

Shipments

20. Factory

Schedule

15. Supply

Review 16. Supply Review

14. Demand

Review

13. Allocated

Available-to-Promise

17. Order

Promises

18. Orders

7. Forecast

1. Plan what you want to sell

3. Promise what your can build and

deliver

2. Build to support the plan

4. Deliver on promises and achieve the plan

19

Copyright 2013 JDA Software, Inc. - CONFIDENTIAL

Already over 30 solutions on the platform

• JDA Business Analysis

• JDA Fulfillment

• JDA CIS

• JDA Master Planning

• JDA Collaborate

• JDA Demand

• JDA Inventory Optimization

• JDA Collaborative Shelf

Planning & Analytics

• JDA Dynamic Allocation

• JDA Monitor

• JDA Executive S&OP

Workbench

• JDA Factory Planner

• JDA Demand

Decomposition

• JDA Transportation Suite

• JDA Markdown

Optimization

• JDA Promotions

Optimization

• JDA Market Manager

• JDA Manufacturing ABPP

• JDA Order

Optimization

• JDA Production &

Sourcing Optimization

• JDA Promotions

Management

• JDA Reporting

• JDA Strategic Pricing

• JDA Supply Chain

Planner

• JDA Travel Price

Optimization

1 Unified

Platform

2 New User

Experience

3 Embedded Analytics

4 Real-Time

Collaboration

5 Superior

Scalability

6 Innate

Flexibility

7 JDA Cloud

Deployment

8 Gallery Eight


• Connected

• Break down inter-department / inter-BU barriers

• Connected – planning to execution

• Forward Visibility

• Anticipating exceptions in the supply chain

• Scenario planning

• Managing risks

• Reacting to Exceptions / Events

• Optimization engines supporting different model

needs

• Supply chain risk analysis

Building an Agile Supply Chain

Copyright 2013 JDA Software, Inc. - CONFIDENTIAL

30+ Solutions

In the Cloud

One Platform

Planning + Optimization + Analytics

Innovations in Manufacturing

Supply Chain

Alex Yap

innovations in manufacturing supply chain - jda software mfg... · one physical supply chain with...

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