a global s&op the essilor end to end supply chain · the sop process is a major stake for...
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CONFIDENTIEL © ESSILOR 2017 – Tous droits réservés Divulgation – reproduction interdite
A global S&OP dedicated to the Essilor End to End Supply Chain
CONTENTS
2 © ESSILOR 2016 – Tous droits réservés Divulgation – reproduction interdite
ESSILOR GROUP Presentation
01 02 03 04
END TO END Supply Chain
Strategy
ESSILOR S&OP Process
CONCLUSIONS
3 © ESSILOR 2016 – Tous droits réservés Divulgation – reproduction interdite
ESSILOR
Presentation
01
Net profit
€813m**
€209m invested in consumer marketing
in 2016
250+ new products / year
64,000 employees
in the world
Products distributed
in 100+ countries
540m* lenses
produced in 2016
€214m allocated
in research and innovation
every year
Revenue
€7.1 billion
Essilor, a World Leader
4
Flagship brands
**Profit attributable to equity holders
*508m prescription lenses and 32m prescription sun lenses
Our ambition: Provide Solutions for Every Consumer Need
Everywhere in the World
5
Raise awareness about the importance of good vision
and make better vision accessible to all
EQUIPMENT
& INSTRUMENTS SUN & READERS CORRECTIVE LENSES ONLINE
A Mission driven by a clear Strategy and Strong Teams
6
A Unique Combination Driving Success
and 5 Key Competitive Advantages
to Widen our Leadership
Unique partnership
& acquisition formula A fast growing supply chain (130 new partnership around the world
in the last 5 years)
Innovation A dynamic portfolio with 250+ new
products every year (Correction, Protection, Prevention)
An extended supply chain
& servicing capabilities 350,000+ customers in 100+ countries, 33 plants and 16 distribution centers
Consumer
& customer proximity
Values & sustainable
development
02
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02
END TO END Supply Chain
Strategy
33 Plants
ESSILOR Supply chain
350,000+ customers > 100,000,000 Make to Order
Decoupling
point
Master Production schedule
6 months – Weekly update
Make to order – 24hrs to 5 days LT
High flexibility: Nominal +- 30%
Finished products
Prescription flows
Supply chain characteristics:
Speed, Service
PULLED PUSHED PULLED
Supply chain characteristics:
Cost efficiency
Robustness
Finished
products
Semi Finished products
490 Prescription
Laboratories
16 Distribution
Centers
20 Partner Plants
350,000+
eye care professionals
E-tailers Frames
13 Base Plants
CONSUMERS’ PRESCRIPTIONS AND NEEDS 8
S&OP VISION
a monthly cycle, a quaterly S&OP executive review
WW
Supply Chain
Continental
Supply Chain
Demand
Consolidation review
by Region,
Network, Channel
(deals, NPI,ads…)
Validate demand with Business /
Marketing
A
Supply Balance and Planning
(WW & Continent)
Balance Demand Stock and Supply
capacities
B
Supply planning
Meeting
(Sourcing)
S&OP Executive Meeting
(Quarterly)
Review Hot spots and make decisions
C
Monthly Loop
Implement decisions
D
OPERATIONNAL LEVEL
Adjust Capacity,
Flow change / Transfer
Extra Capacity -Stock:
SHAPE DEMAND
9
Capa. shortage
ADJUST SRC /
INVEST.
Re Forecast for Budget (Sales, Production, Inventory) WW
Executive Board
S&OP output
communicate trends, decisions and opportunities
1- S&OP executive scorecard
2- Sales Forecasts / New Products / Deal : Analyzing
performance and build collaborative forecast with region
business, finance and marketing Turn Over & Margin
improvement
3- S&OP Balance
5- Customer Service level Assess the risks and
prepare recovery plans
4- Stocks : Make sure Eoy at target defined Assess
cost impact for Cash Flow optimization
6- Production Capacities : Variance analysis vs. Budget Prod transfer & investment mgmt (where/when)
7- Hot Spots
Sales Variance
2014 vs. 2013
Projected Sales 2014
Inventory Variances
from
beginning
2014 Proj. End Inventory
Variance 2014 vs. 2013
Volumes
2014
19
367
80
+4.2%
+3.1%
7
188
26
-4.1%
-3.3%
19
374
0
+15
+9 90
-0.3
- 6.4
DEMAND INVENTORY SUPPLY*
-4.1% -1.1
BTF
SV
PAL
2014 Needs (Demand, Scr., TRS)
19
380
89
460 +5,5% 221 -3.5% 480-81213S&OP 488+24 +2,2%+16
+2%+6
+0,5%+1
+10%+9
/ 11 © ESSILOR 2016 – Tous droits réservés Divulgation – reproduction interdite
Our S&OP
Process
03
Route-To-Market:
Sourcing , Transformation, LT & Transport mode management
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Europe Mkt
EOLP
VASC Bkk
Trs Phil.
Columbus
Mexico
Trp. Mode & LT
1 day
1 week
1 week
1,5 Month
Route Cost
Carbon Foot Print
Next improvement
Inventory management : a virtous circle
2/ SS Calculation
3/ Threshold
monthly S&OP target
4/ Proj. Inv.
Challenge the EoY inv. Vs. Threshold
5/ New Target
Executive new roadmap
1/ Op. Inputs
(SLA,Accuracy, Deviation, LT, Strategic )
Constrain Capacity plans
From Safety to target SS is a
resultant
Based on year results
Action Plans
for inv. optimization
SALES FORECAST
SHIP.REQ.
REC.REQ.: by supplier
SHIP.REQ.
PROD.REQ.
SHIP.PLAN
REC.PLAN
SHIP.PLAN
REC.PLAN
Distribution Requirement Planning
(DRP)
Inventory
Deployment
DRP, Production Planning and Deployment
Net Requirement
Prod. Planning
JIT / Fill Up
PROD.PLAN
Ideal
Inventory
Projected
Inventory
SHIP.REQ.
REC.REQ.: by supplier REC.PLAN
SHIP.PLAN
Net Requirement Ideal
Inventory
Projected
Inventory
US DC
SEOCL DC
SEOCL PLANT
US Markets
S&OP monthly process
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6000
products 16 DC 35 Suppliers
(plants, partners & ext.)
2300 RTM
x 100 Cust. Groups x 600 S&OP fam.
Demand Supply
Week 1 W. 2&3 W. 4
Inventory
15 20
De
ma
nd
Mg
mt
24
mth
fo
rec
ast
REPO
RTI
NG
/ M
EETI
NG
Zo
ne
/ W
W /
Fin
an
ce
30+
Resource management
Capacity constrain
500
Mpcs
S&OP Vision : Fundamentals for change
16 CONFIDENTIEL © ESSILOR 2015 – Tous droits réservés
Divulgation – reproduction interdite
6000
products 16 DC 35 Suppliers
(plants, partners & ext.)
2300 RTM in Library
x 100 Cust. Groups x 600 S&OP fam.
Demand Supply
Week 1 W. 2&3 W. 4
Inventory
15 20
De
ma
nd
Mg
mt
R E
P O
R T
I N
G
Zo
ne
/ W
W /
Fin
an
ce
30+
Resource management
Capacity constrain
Sales driven approach (not only supply driven)
Collaborative Demand Planning
A unique WW DATABASE (sales, forecasts, stoks, production),
with shared RTM (from Mkt to Mass prod)
« What if » analysis capabilities
Promote common reporting and KPI’s (in BI tool)
Business Involvement in process & Meetings
S&OP Process reactivity and simplification
(Monthly cycle, Unique process, less families, Simulation tool)
Ownership of Business at continental level
Develop key values (Openness,
transparency, Commitment and Team Working)
MIN
DSE
T
BR
ICK
S TO
OLS
Conclusions
04
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S&OP : A key process for Essilor to Support Growth and
Increase Profitability
• Secure service to customers
• Support business and marketing and secure new products and deals launches
• Sourcing at the best possible cost
• Production and Inventory cost control
• Define at the best time when/where to invest
18 Worldwide Flow Management Department
the SOP process is a major stake for essilor
The ESSILOR Supply Chain is accountable for the S&OP process and its performance
• End to End Supply Chain / Full perimeter including Partners
• Involve Business / Marketing / Finance – Align all
• Decision making process at the highest level
• Monthly cycle for more reactivity
• Collaborative tool
Next Steps
19 Worldwide Flow Management Department
• Increase Reactivity
• Simplify & develop a common language
• A single set of numbers for all the organization
• Manage Value
• Develop Simulation capabilities
• Full integration with MTP and Budget process