shertrack nxt gen s&op solution suite 031910
DESCRIPTION
SherTrack Intro’s NXT GEN S&OPTRANSCRIPT
SherTrackDemand-Driven Predictive Manufacturing
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
NEXT GEN S&OP:Compelling new Approaches Producing Overwhelming Value
Gregory L. Schlegel CPIM, CSP, JonahVP Business Development
Professor ,Supply Chain Management, Lehigh [email protected]
[email protected] 19, 2010
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
NEXT GEN S&OP Agenda…..
Intro to SherTrackNEXT GEN S&OP CapabilitiesThe WHAT and WHY of NEXT GEN S&OPSome HOW TO’s Associated with NEXT GEN S&OPWHAT’s in it for you?Next Steps
Lehigh University GBUS492 MBA Class 2010
2
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
SherTrack Overview
Venture backed company founded 2002 with the first few years spent on technology developmentFocused on early adopters, innovators and exemplarsProviding innovative, demand-driven probabilistic solutions to complex operations including S&OP/Supply Chain consultingSolutions are SaaS, Software-as-a-Service…lease vs buyMinimum amount of internal IT support with rapid, remote-driven, virtual installationNo upfront license fees…subscription “Pay-as-you-go” approachProfitable for the last two years in light of the environmentGrowing year over year
SherTrack LLC Confidential © 2010
3
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
Past & Present Clients
ROHM & HAAS A Wholly Owned Subsidiary of
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
NEXT GEN S&OP Solution Platform
S&OP Best-in-Class Process Development & RoadmapS&OP Building Blocks…..Risk Mitigation Tactics/TemplatesS&OP Enterprise Scenario Planning leveraging Predictive Analytics
Lehigh University GBUS492 MBA Class 2010
5
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
Predictive Analytics Strategic Platforms
© SherTrack, LLC 2009
SNAPPS™ Predictive Analytics Facilitates Lean Pull
Consumption Patterns
Interpret the information and evaluate if it is
something to react to or to ignore
Forecasts guide target ranges
Determine Optimal System Response
Synthetic Order Stream(real + predicted demand)
Probabilistic Optimization
Demand Plan
SNAPPS Probability
ModelMonitor & sense
demand & supply events
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
NEXT GEN S&OP Competencies…..
1. S&OP Best-in-Class Process Development & RoadmapAS-IS Assessments, Maturity Models, People, Processes & Metrics
2. S&OP Building Blocks……Risk Mitigation Tactics/TemplatesERM….Enterprise-wide Risk Management FrameworkUncertainty, Complexity & Risk Templates & TacticsBuilding Blocks to Success
Product Portfolio ManagementCustomer Segmentation/TieringTotal-cost-to-Serve Efficient & Effective Supply Chain Models
3. S&OP Scenario Planning leveraging Predictive AnalyticsScenario Planning basics within an S&OP EnvironmentPredictive Analytics using Probabilistic MethodologiesMinimizing Uncertainty, Complexity & Risk through Prioritizing Probabilities of occurrence and development of Risk Response Plans
Lehigh University GBUS492 MBA Class 2010
6
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
The S&OP Process Today:
Operations &R&D
Sales &Marketing
GOAL: Factory optimization to improve costsDesire is to minimize demand uncertaintyFORECAST: Manufacturing plan
GOAL: Feasible plan, Bottoms-upDesires to minimize risk & disruptionFORECAST: Demand plan
GOAL: Maximize revenue & market shareDesires guaranteed product availabilityFORECAST: Sales plan
Supply ChainFinanceGOAL: Make BudgetDesires control & wants predictability of operationsFORECAST: Budget
S&OP
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
FOUR STAGES of S&OP
WHAT are the definitions?WHERE are you positioned?HOW long does it take to move forward?WHAT are the benefits?WHAT’s NEXT, after Stage 4?
Aberdeen Group
S&OPBest Practice Steps
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPMThe S&OP Lament!
“Less than 1% of companies use customer data as the basis for supply chain planning and less than 2% of all companies have segmented customers based on profitability”…….AMR
“Over 60% of all companies take more than two weeks to sense changes in actual demand and take still another two weeks or more to respond”……..AMR
9
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
“AMR Research reports companies that useclassic S&OP approach to demand/supply can see”…..
A 5-10% improvement in forecast accuracyA 1-5% improvement in supply chain costsAnd can expect to work on this S&OP process anywhere
from 9-12 months before seeing initial improvements
Necessary but not Sufficient!
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
NEXT GEN S&OP: Emerging Themes…
Companies NEED to understand the business importance of their different products & customers and ALIGN them properlyCompanies SHOULD Segment/or Tier their customers and develop efficient and effective supply chains based on Total-Cost-to-Serve modelsCompanies NEED to incorporate Risk Management information, methods and tactics into their S&OP processesCompanies MOVING to S&OP Scenario Planning SHOULD support it by leveraging Probabilistic Predictive Analytics
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
NEXT GEN S&OP “Building Block”…..Risk Mitigation Methods
Product Portfolio ManagementCustomer Value Management….Tiering/SegmentingSupply Chain TCS, Total-Cost-to-Serve ModelsEnterprise-wide Risk Management Framework
SherTrackDemand-Driven Predictive Manufacturing
Product Portfolio by Importance & Variability
Q4VARIABLE DEMAND
andHIGH IMPORTANCE
Q3VARIABLE DEMAND
andLOW IMPORTANCE
Q1STABLE DEMAND
andHIGH IMPORTANCE
Q2STABLE DEMAND
andLOW IMPORTANCE
Low High
Low
High
FORCAST
ABILITY
BUSINESS IMPORTANCE
SherTrackDemand-Driven Predictive Manufacturing
SherTrack LLC Confidential © 2008 31
Customers in Segment
CustomerLifetimeValue
High Revenue, Low Cost
Customers
High Revenue, High Cost Customers
Low Revenue, Low Cost
Customers
Low Revenue, High Cost
Customers
“Champions” “Demanders” “Acquaintances” “Losers”
Customer Lifetime Value Measures Value Contribution by and within Segments….
SherTrackDemand-Driven Predictive Manufacturing
Sales & Operations Planning:(Total-Cost-to-Serve Model)
Types of Channels/CustomersHigh
Low High
Net Price
Cost-to-Serve
Passive
* Product Crucial
* Good Match
Price-sensitive
& care little for service or
quality
Costly to service, but
pay top $$
Aggressive
* Leverage their buying power
Channels & Customers above diagonal are more profitable
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
NEXT GEN S&OP Scenario Planning
WHAT?WHEN?WHOM?HOW?WHY?
SherTrackDemand-Driven Predictive Manufacturing
NEXT GEN S&OP Scenario Planning Vision
ProbabilisticSimulation
EnoughInformation?
RobustTactical
Plan
H. Van Landeghem, H. Vanmaele/Journal of Operations Management, 2002
Supply chainFlow model
Base casedata
DecisionLogic
ProbabilityDistributionsOf uncertain factors
Probability ofoccurrence &magnitude ofdisturbingevents
Design ofExperiments
Performance measures
FeasibleTactical plans
No Yes Determine“most appropriate”values ofdecision variables
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
SherTrack’s Predictive Analytics Impacts so far…….
◗ Service Level 3%- 14%◗ Throughput 1%- 8%
$ Revenues Expenses
AssetsPROFITMAX
1%-3% of Sales
=
◗ Planning Time 50%- 70%◗ Transition costs 1%- 8%
◗ Inventory 15%- 35%◗ Effective Capacity 1%- 8%
Actual Value Realized
SherTrackDemand-Driven Predictive Manufacturing
NEXT GEN S&OP:WHAT’s in it for You?
Competencies……1. S&OP Best-in-Class Process Development & Roadmap
AS-IS Assessments, Maturity Models, People, Processes & Metrics
2. S&OP Building Blocks……Risk Mitigation Tactics/TemplatesERM….Enterprise-wide Risk Management FrameworkUncertainty, Complexity & Risk Templates & TacticsBuilding Blocks to Success
Product Portfolio ManagementCustomer Segmentation/TieringTotal-cost-to-Serve Efficient & Effective Supply Chain Models
3. S&OP Enterprise Scenario Planning leveraging Predictive Analytics
Scenario Planning basics within an S&OP EnvironmentPredictive Analytics using Probabilistic MethodologiesMinimizing Uncertainty, Complexity & Risk through Prioritizing Probabilities of occurrence and development of Risk Response Plans
Benefits Derived…….1. S&OP Best-in-Class Processes
Roadmap for S&OP Success
2. Building Block Risk MitigationService ImprovementsCost ReductionImproved Capacity UtilizationImproved Asset Turnover/Working Capital
3. Scenario Planning Risk ManagementRisk Management/MitigationReputation & Brand LoyaltyCompetitive AdvantageCost of Capital Reduction
15
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM