advanced supply chain planning at usg planning at usg
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Advanced Supply Chain Planning at USGPlanning at USG
Amy David, Logistics Planning and Process Development Manager
Ian Cole, Supply Planner
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Agenda
�USG Overview
�Building the Case for ERP
�ERP Implementation
© Copyright 2008 USG
�Benefits and Lessons Learned
�Question & Answer
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USG Overview
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USG Corporation
� NYSE – listed since 1931; Ticker: USG
� $4.6 billion in sales in 2008
� Leader in its 3 core businesses
� North American Gypsum
© Copyright 2008 USG
� North American Gypsum
� Worldwide Ceilings
� Building Products Distribution
� 12,800 employees
� 107 years old
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North American Gypsum
� Largest network of facilities
� Fewest miles-to-market
� Vertically integrated gypsum quarries and paper mills
© Copyright 2008 USG
paper mills
� Most comprehensive product offering
� Sheetrock
� Durock
� Fiberock
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Worldwide Ceilings
� Strong market position
� Full product line
� Focused on innovative solutions
© Copyright 2008 USG
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Building the Case for ERP
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Origins of Supply Chain Management at USG
� Plant operations historically managed on a local / regional basis
� Introduction of new high-speed plants starting in 1999-2000 made cross-region shipments cost effective
� Supply Chain Management
© Copyright 2008 USG
� Supply Chain Management organization established in 2000 to coordinate plant operations and distribution across the network
� Established S&OP and forecasting processes
Rainier, OR
Bridgeport, AL
Aliquippa, PA
East Chicago, IN
Plaster City, CA
Plasterco, VA
Oakfield, NYGypsum, OH
Fort Dodge, IA
Monterrey, MX
Fremont, CA
Rainier, OR
Bridgeport, AL
Aliquippa, PA
East Chicago, IN
Plaster City, CA
Plasterco, VA
Oakfield, NYGypsum, OH
Fort Dodge, IA
Monterrey, MX
Fremont, CA
1999 - 20011999 - 2001
New facility opened
Old facility closed
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Supply Chain Complexity
Complexity increases as the supply chain model begins to reflect our real business—introducing real-world constraints
• Not all plants make or stock all products
• Some plants warehouse products made at other plants
• Plants ship across Sales Areas
• Some plants can ship into other plants’ markets
© Copyright 2008 USG
• Some plants can ship into other plants’ markets
• Some plants can service markets more cost-effectively than other plants
CSC
Sales
Sales
Sales
Plant
Sales
Sales
Sales
Plant
Increasing complexity leads to more risk and greater potential for service disruptions, higher costs
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Supply Chain Opportunities
Improve quality and consistency of plant-level forecasting activities.
Connect production scheduling processes to overall supply chain planning.
Establish consistent business rules and performance
© Copyright 2008 USG
Establish consistent business rules and performance measurements.
Reduce manual effort and errors caused by multiple IT systems.
Answer key customer question: “When will my truck arrive?”
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Expected Benefits
Build a competitive advantage by becoming the easiest company to
do business with
Drive a fundamental shift to network-focused
processes, business rules, and information
management
© Copyright 2008 USG
Connect disparate processes to create an
overall process that fully drives supply chain
operations
Provide the systems capabilities required to
link supply chain planning to production
planning and scheduling
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ERP Implementation
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Oracle ERP Implementation
Implemented advanced planning in parallel with plant ERP
� Oracle Demand Planning (ODP)
� Oracle Advanced Supply Chain Planning (ASCP)
� Other modules included: Cost, Manufacturing, Inventory, MSCA, Shipping, and Financials
© Copyright 2008 USG
•2 Locations •5 Locations •6 Locations •10 Locations •13 Locations •10 Locations•12 Locations •8 Locations
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Plan Validation Process
� Goal: Validate the Manufacturing Plan for each plant before Go-Live
� Plant, Logistics, and SCM site teams work together to transition plants to the new LinX Manufacturing Planning process
� Identify and resolve data issues that would impact the ability to manage the plant using the new planning and scheduling processes
� Bring the plants up and running on the Manufacturing Plan
© Copyright 2008 USG
� Help the plant transition to running and trusting the new LinX planning philosophies and methodologies
� Establish a strong working relationship between the plants and Logistics that will continue after SCM teams move on
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Key Enablers
Highly-skilled plant rollout and training teams
Positive relationships with strategic partners
© Copyright 2008 USG
Clear, well-communicated vision
Strong PMO and QA entities
Team rewards and after-work socializing
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Benefits and Lessons Learned
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Improved Information B
efo
reLimited visibility into the supplies and demands of other plants
Planning only manageable at the product category or family level
After Global plans show
dependent demand from other plants
ASCP and ODP handle millions of data points for detailed planning
© Copyright 2008 USG
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Befo
re
family level
Rough conversions from finished good forecasts to raw material requirements
Minimum quantities or fixed lot sizes known anecdotally by planners
detailed planning
Bills of Material exploded to the lowest level and summarized by material
All item data stored in central database and used in planning production
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Benefits
� Cost savings
� Finished goods and raw material inventory reduction
� Execution of strategic optimization
� Fewer cross-region shipments
© Copyright 2008 USG
� Improved customer service
� Increased first-call resolution
� More accurate order promise dates
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Lessons Learned
• Pre-deployment visits
• Communication of overall vision
Change management must be a constant focus
• Optimization rules
• Limited data collection
Examine trade-offs between features and performance
© Copyright 2008 USG
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• Limited data collection
• Forecast consumption settings
• Planning Time Fence control
Large volume of configuration options allow for continuous improvement
• Custom data validation
• Copy restoration
Data integrity is critical to successful plan run
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Questions?