the delos partnership 2007 page 1 integrated enterprise leadership overview of the process
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© The Delos Partnership 2007 page 1
Integrated Enterprise Integrated Enterprise Leadership Leadership
Overview of the process
© The Delos Partnership 2007 page 2
Customer Relationship StrategyCustomer Relationship Strategy1. First Decide if you are Make to Stock or Make To Order
• May vary by family/product2. Then work out the production plans
Inventory
Production
Make To Stock
Sales/Shipments
OrderBook
Sales Orders
Production/Shipments
Make To Order
© The Delos Partnership 2007 page 3
Inventory ManagementInventory ManagementInventory is not something that can be managedInventory is not something that can be managed – – it is a resultit is a result
Forecasts
Actual Sales Actual Production
Planned Production
© The Delos Partnership 2007 page 4
Make to StockMake to Stock
Production = Demand Plan + (Inventory Production = Demand Plan + (Inventory Target - Current Inventory)Target - Current Inventory)
= 100= 100 + 75 - 50) + 75 - 50)
PRODUCTION STOCK
© The Delos Partnership 2007 page 5
Integrated Enterprise Leadership Integrated Enterprise Leadership
-3 -2 -1
Demand Plan 120 120 120
Actual Demand 119 125 132
Difference -1 5 12
Cum Diff 4 16
Months 1 2 3 4 5 6 7 8 9
Last Demand Plan 120 120 120 120 120 120 120 120 120
New Demand Plan
Difference
Cum Diff
Months Q4 Q1
360 360
-3 -2 -1
Supply Plan 125 125 125
Actual Supply 119 118 121
Difference -6 -7 -4
Cum Diff -13 -17
1 2 3 4 5 6 7 8 9
Last Supply Plan 125 125 120 120 120 120 120 120 120
New Supply Plan
Difference
Cum Diff
Q4 Q1
360 360
-3 -2 -1
Stock Plan 71 76 81
Actual Stock 66 66 59 48
Difference -5 -17 -33
1 2 3 4 5 6 7 8 9
Last Stock Plan 86 91 91 91 91 91 91 91 91
New Stock Plan
Difference
Q4 Q1
Make – To- Stock : Family Units
© The Delos Partnership 2007 page 6
Lead Time ManagementLead Time ManagementLead time is not something that should be a resultLead time is not something that should be a result- it is something that should be managed- it is something that should be managed
Forecast of
Requirements
Actual Requirements/Sales Actual Shipments
Planned Production/Shipments
© The Delos Partnership 2007 page 7
Make to OrderMake to OrderProduction = Demand Plan + (Current Order Book -
Orderbook Target)
= 70 + 75 - 50)
PRODUCTIONPRODUCTION ORDER BOOKORDER BOOK
© The Delos Partnership 2007 page 8
Integrated Business LeadershipIntegrated Business Leadership
-3 -2 -1
Demand Plan 70 70 70
Actual Demand 71 75 80
Difference 1 5 10
Cum Diff 6 16
Months 1 2 3 4 5 6 7 8 9
Last Demand Plan 70 70 70 70 70 70 70 70 70
New Demand Plan
Difference
Cum Diff
Months Q4 Q1
210 210
-3 -2 -1
Supply Plan 75 75 75
Actual Supply 70 69 71
Difference -5 -6 -4
Cum Diff -11 -15
1 2 3 4 5 6 7 8 9
Last Supply Plan 75 75 70 70 70 70 70 70 70
New Supply Plan
Difference
Cum Diff
Q4 Q1
210 210
-3 -2 -1
Order Book Plan 61 56 51
Actual Orders 66 67 73 82
Difference 6 17 31
1 2 3 4 5 6 7 8 9
Last Plan 46 41 41 41 41 41 41 41 41
New Plan
Difference
Q4 Q1
41 41
Make – To- Order – Family Units
© The Delos Partnership 2007 page 9
Family SummaryFamily Summary
0
5,000
10,000
15,000
20,000
25,000
30,000
Euros
Sales Contrib
Sales/Profit
Financial Analysis
BudgetPreviousCurrent
Major ChangesNew Product included in ForecastTender for Russia included
Major AssumptionsCompetition will reduce price by 5 %We Win Russian Tender
Major Threats
Decisions RequiredInvestment of Eur 0.5 m in Additional capacity for New Product
© The Delos Partnership 2007 page 10
WorkshopWorkshop
Using the information given, develop a revised plan
© The Delos Partnership 2007 page 11
Integrated Enterprise Leadership Integrated Enterprise Leadership
To operate effectively an Integrated Enterprise Leadership process needs: Timely acquisition of data on sales, inventory etc. Formal process for preparation of data and
information Time for analysis of information Discussions to get to conclusions Time to prepare agendas and recommendations A regular well communicated and adhered to
process
© The Delos Partnership 2007 page 12
Integrated Enterprise Integrated Enterprise LeadershipLeadership
AACCTTIIOONN
Week 1 Week 2 Week 3 Week 4
InnovationReview
CustomerDemandReview
SupplyPlan
Review
PriorityReview
Stage 1Stage 1
Stage 2Stage 2
SeniorTeam
Review
Stage 5Stage 5
Stage 7Stage 7
Stage 3Stage 3
SupportReview
Stage 6Stage 6
Stage 4Stage 4
© The Delos Partnership 2007 page 13
Planned Calendar …….Planned Calendar …….
•Dates set in advance (annually)•Everyone knows when it is•Agenda pre-set•Preparation happens•If nothing to discuss, then no meeting•Almost non-voluntary
© The Delos Partnership 2007 page 14
Multi-Level Integrated Enterprise PlanningMulti-Level Integrated Enterprise Planning
Week 1 Week 2 Week 3 Week 4
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
© The Delos Partnership 2007 page 15
Characteristics of IEL processCharacteristics of IEL process• Formal set of meetings• Agendas “pre-set”• Linked series of meetings• Focus on right decisions being made at
right level• Preparation not “thank goodness for the
last minute”• Facts not opinions• Focus on Long-term and not short-term.
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