1 © The Delos Partnership 2004 Delos Excellence Project Implementation Process Design

1 © The Delos Partnership 2004

Delos Excellence Project Delos Excellence Project ImplementationImplementation

Process DesignProcess Design


Delos Change JourneyDelos Change Journey

MobiliseMobilise DesignDesign CommunicateCommunicate ReviewReviewUnderstandUnderstand

Identify quickIdentify quickBenefitsBenefits

DevelopDevelopChange VisionChange Vision

InternalInternalSell-inSell-in

ReviewReviewSystemsSystems

EstablishEstablish ResourcesResources

Gain quickGain quickBenefitsBenefits

DetailedDetailedProcess DesignProcess Design

Public/PrivatePublic/PrivateWorkshopsWorkshops

Develop Develop SystemsSystems

Develop TaskDevelop TaskTeamsTeams

Gain earlyGain earlyBenefitsBenefits

Document Document Policies etcPolicies etc

InternalInternalEducationEducation

CreateCreateSystemsSystems

EstablishEstablishOrganisationOrganisation

SecureSecureBenefitsBenefits

RefineRefinePolicies etcPolicies etc

AASSSSEESSSS

ContinueContinueEducationEducation

RefineRefineSystemsSystems

GainGainTeamworkTeamwork

AASSSSEESSSS

Cost/Cost/BenefitBenefit

DevelopDevelopBus StrategyBus Strategy

InitialInitialEducationEducation

AppointAppointSponsorSponsor

PPIILLOOTT

PPIILLOOTT

PPIILLOOTT


Task TeamsTask Teams

1. Integrated Enterprise Planning

2. Innovation and Project Management

3. Customer Relationship Management

4. Supply Management – Internal and External

5. Support Activities

6. Performance Measures

7. Data Accuracy

8. Continuous Improvement

9. People and Culture


Task ForceTask Force

Integrated Integrated Enterprise Enterprise Planning Planning

Integrated Integrated Enterprise Enterprise Planning Planning


Integrated Enterprise Integrated Enterprise PlanningPlanningComposition• Sponsor [chair]• Finance Director• Operations Director• Sales and Marketing Director• HR Director• IT Director• Project Leader


Integrated Enterprise Integrated Enterprise PlanningPlanningExternal Education

– Integrated Enterprise Planning Workshop– Detailed Process based workshops

Internal Education– Process– Software– Behaviour Change requirements

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN

DEFINE & MEASURE BENEFITS

ORGANISATION

SYSTEMS


Framework for Process Framework for Process ReviewReview

ProcessInputs Outputs

People

Behaviour/Culture

Measures/Performance Indicators

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


IEP BenefitsIEP Benefits

1. Visibility

2. One set of numbers

3. Long-Term not short term

4. Easier to derive budget

5. Simulation

6. Financial review

7. Ability to deliver strategy

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Integrated Enterprise Integrated Enterprise PlanningPlanningIssues to address :• Process Ownership• Operation of processes

– Innovation– Demand– Supply– Support– Prioritisation– Senior Team Review

• Timetable of meetings• Agenda• Meeting attendees• Family Groupings• Performance Measures

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Integrated Enterprise Integrated Enterprise Planning - IssuesPlanning - Issues1. Link to Board Meeting

• Capital Expenditure• Sourcing of Production• Acquisition• Business Restructuring• Policy Changes

2. Dealing with major crises• Need for fast track process

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Integrated Enterprise Integrated Enterprise PlanningPlanning1. Need for aggregation facility

by family

2. Rolling 12 month picture

3. Actual to date plus rest of year

4. Spreadsheet or specialist software

5. Integration of Demand, Supply and Inventory/backlog targets

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Integrated Enterprise Integrated Enterprise Planning - StagesPlanning - Stages1. Pilot activity

2. Have first meeting

3. Concentrate on one/two families

4. Add families asap

5. All families required to make it useful

6. Financials

7. Replace the budget


MD/Sponsor’s roleMD/Sponsor’s role

1. Call the first meeting

2. Encourage the fact that it is a different way of running the business

• Honesty, realism, trust• Rolling budget

3. It involves more detail maybe than before

4. Attend each meeting


Integrated Enterprise Integrated Enterprise PlanningPlanning# Activity Target Complete1 Responsibility for implementation of Integrated

Enterprise Planning assigned to MD or equivalent

2 Initial Workshop on Sales and Operations Planning complete

3 Product Families, Planning Horizon, and Time Fences agreed

4 Performance measurements to be reported have been agreed

5 Meeting cycle agreed and timetable for next 12 month published

6 Process started with one Family

7 All other families implemented in the process

8 Financial linkage to Budget completed



InnovationInnovationAndAnd

Project Management Project Management

InnovationInnovationAndAnd

Project Management Project Management


Task TeamTask Team

• Innovation Process Owner [Chair]

• Marketing Manager

• Production Manager

• Industrial Engineering manager

• Purchasing

• Quality

• Research and Development


Innovation EducationInnovation Education

External Education– Project Management Workshop– PMI Accreditation– Software understanding

Internal Education– Project Management course– Software understanding

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


DesignDesign

1. Stage Gate process

2. Business Case management

3. Prioritisation of projects

4. Project Review

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Management of InnovationManagement of Innovation

Stage/Gate Process

Formal Process for Managing Project

Gate0

Gate0

Gate1

Gate1

Gate2

Gate2

Gate3

Gate3

Gate4

Gate4

Stage 0Stage 0 Stage 1Stage 1 Stage 2Stage 2 Stage 3Stage 3 Stage 4Stage 4

Review

InvestigateInvestigate FinancialCase

FinancialCase

DevelopDevelop TestTest LaunchLaunch

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Bill of Activity – Link with Bill of Activity – Link with PlanningPlanning

ShipShip

PackPack

ProcessValidation

ProcessValidation

DevelopProcess

DevelopProcess

SourcePacks

SourcePacks

DevelopArtwork

DevelopArtwork

SourceEquipment

SourceEquipment

DesignLayout

DesignLayout

Lt = 2 weeksLt = 2 weeks

Lt = 6 weeksLt = 6 weeks Raw Material

Raw Material Lt = 4 weeksLt = 4 weeks



AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


BenefitsBenefits

1. Control over innovation

2. Fewer expensive mistakes

3. On time product introduction

4. Management of too many initiatives

5. Faster implementation timescaleThank goodness for the last minute or

nothing will get done….

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


OrganisationOrganisation

1. Innovation Manager

2. Programme Managers

3. Responsibility for Projects

4. Resource owners linked into Programme Managers

5. Cross-functional and team based activities

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Innovations ManagerInnovations Manager

Strategy

Innovation Manager

DevelopmentIdeas

ProjectPlans

DevelopmentPlans

Supply Plans

ProjectSystem

Prioritised PlansPrioritised Plans

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


SystemsSystems

1. Standard Project Management

tools• Phases/Activities/Tasks• GANTT and PERT Charts

2. Displays capacity

3. Multiple projects aggregated

4. Provides Earned Value Measurement

5. Critical Path analysis clear

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Innovation ManagementInnovation Management

# Activity Target Complete1 Responsibility for implementation of Innovation

Management assigned to an Innovation process owner

2 Initial Workshop on Innovation and Programme Management

3 Stage Gate and Business Filter process defined. Agreement on sign off authority levels, and prioritisation

4 Performance Measures for successful completion of milestones agreed. Earned Value calculation agreed.

5 Software for Programme Management tested and signed off

6 Cross Functional Programme management organisation established.



Sales ForecastingSales ForecastingAndAnd

Demand Management Demand Management

Sales ForecastingSales ForecastingAndAnd

Demand Management Demand Management



Composition

• Marketing Director [chair]

• Sales Representative

• Purchasing

• Master Scheduling

• IT Manager

• Project Team Member


EducationEducation

External Education– Sales Forecasting and Demand

Management– Customer Relationship Management

Internal Education– Process– Software– Performance Measurement

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


DesignDesign

Issues to address:– Sales Forecasting

• Level, Unit of Measure, Horizon and Time Buckets• Forecast Consumption• Abnormal Demand

– Customer Relationship Management• Organisation around customers• Use of Software• Electronic links/Planning links

– One set of numbers• Link to targets and actual versus budget

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Design - IssuesDesign - Issues

1. Responsibility for Forecast

2. Frequency of Forecasting

3. Management of Abnormal Demand

4. Sticking to the rules

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


BenefitsBenefits

1. Visibility

2. Forecast by product – not just value

3. One set of numbers

4. Supply Chain can use numbers

5. Forecast Accuracy measure leads to stability

6. Know the customers

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS



1. Need for a Demand Manager

2. Link to Customer Services

3. Responsibility for Forecast • Sales and Marketing

4. Customer Facing teams

5. Demand control versus planning

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


SystemsSystems

1. Specialist Forecasting system• Linear regression• Time series• Simulation

2. Should be easy to understand3. Capability to enter in Marketing/Sales input4. Measures Forecast accuracy5. Allows aggregation and proration easily6. Customer Relationship system

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


IssuesIssues

1. Responsibility for Forecast2. Can’t forecast – our business is different3. Only forecast 20 % that account for 80 % of

value4. Only forecast by value5. Only provide a forecast for 6 months6. Forecast accuracy – but what about beating

the budget ?7. Salesmen should sell, and not waste time

forecasting


SolutionsSolutions

1. Sales and Marketing Director to lead

2. Employ good system to deal with 20 % by value, and manage through Demand Manager

3. Recognise Value forecast of no use

4. Adopt new Measures of Performance

5. Sales can save time through forecasting

6. Accurate data for CRM system


Customer Relationship Customer Relationship ManagementManagement# Activity Target Complete1 Responsibility for implementation of Customer

Relationship Management assigned to an Demand process owner

2 Initial Workshop on Sales Forecasting and Demand management and CRM

3 Forecast process agreed around Level, Horizon, Units and Buckets, and frequency of update

4 Responsibility for Sales Forecasting established with Sales and Marketing

5 Policies on Forecast Consumption, abnormal demand, and use of Available to promise defined, and approved by Steering committee

6 Software for Sales Forecasting and Demand management and Customer Relationship Management tested and signed off

7 Demand Planning and Demand Management organisation set up under Sales and Marketing



MasterMasterProductionProductionScheduling Scheduling

MasterMasterProductionProductionScheduling Scheduling


Master Scheduling Task Master Scheduling Task ForceForceComposition• Marketing Director [chair]• Sales• Purchasing• Finance• Master Scheduling• IT Manager• Project Team Member


Master SchedulingMaster Scheduling

External Education– Supply Chain Techniques– Supplier Relationship management

Internal Education– Process– Software– Performance Measurement– Behaviour Change

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS



Issues to address:– Make To stock/Make to Order/Assemble to Order– Manufacturing/Sub-Contract– Management of Field service Capability– Level at which to MPS– Use of Rough Cut and Detailed Capacity Planning– Use of Demonstrated Capacity– Available to Promise – Time Fences– How to handle Abnormal Demand– Link to Integrate Enterprise Planning– Creation of Work To Lists for Field Service– Responsibility to Plan the Work– Use of Action Messages

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS



Design is crucial• Make to Order/Assemble to Order/Make

to Stock• Bill of Material structure to support this• OE/Spares; Finished Goods/Bulk• Forecast Consumption• Available to Promise• Handling of Field Sales/Implementation

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Master Scheduling PolicyMaster Scheduling Policy

• Forecasting Process

• Field Sales Planning and Execution

• Management of Abnormal Demand

• Time Fences

• Responsibility for change

• Target Service Levels

• Safety Stock policies

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Master Scheduling - Master Scheduling - benefitsbenefits1. Improved Delivery to Promise

and request

2. Achievable Plan – Field Sales and Supply

3. No backlogs

4. Stability in the supply chain

5. Manufacturing know that they can make it

6. Field Service know that they can deliver it

7. Suppliers have achievable due dates

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


MPS OrganisationMPS Organisation

• Planning Organisation• Supply Planning and Field Service Planning• Vertical vs Horizontal• Timing of new planners• Training in new ways of working• Independence• Role of Sales and Marketing• Role of Master Scheduler

– Manages Supply Plans– Manages Field Service Plans

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


MPS Software needsMPS Software needs

1. Firm Planned Order2. Forecast Consumption3. Abnormal Demand Filters4. Available to Promise [2 level ?]5. Aggregation6. Rough Cut Capacity Planning7. Time Fences8. Forecast Interface9. Order Entry Interface10. Final Assembly Scheduling

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Master Production Master Production SchedulingScheduling# Activity Target Complete1 Responsibility for implementation of Supply

Management assigned to Marketing Process owner

2 Initial Workshop on Sales Forecasting and Demand management and CRM

3 Model for Master Scheduling established which specifies how Make To stock, Assemble To order and Engineer to Order will operated

4 Software checked for ability to support the Master Scheduling model.

5 Policies on Time Fences and Changes to Master Schedule agrees and approved by Steering committee

6 Performance measures and target service levels agreed

7 Master Scheduling Organisation established which follows Vertical Planning concept.



SupplierSupplierRelationshipRelationshipManagement Management

SupplierSupplierRelationshipRelationshipManagement Management



Supply Chain process owner• Purchasing• Planning• Finance• Development• Stores• Systems• Project Team member


EducationEducation

External Education– Procurement Master Class– Supplier Relationship Management

Internal Education [to suppliers]– New ways of working– Use of e-procurement

Internal Education [to employees]– Effective Procurement

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


DesignDesign

• Procurement separate from Supplier Management

• Measurement of suppliers– Right First Time– Quality

Focus on Total Value– Total Cost Reduction– Total Cost avoidance

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Supplier Relationship Supplier Relationship ManagementManagement• Clear Vendor agreements• Vendor contracts and agreements• Measurement

– Delivery– Price– Quality– Lead Times

• Use of e-procurement

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


ProcurementProcurement

• Analyse products and

suppliers– Major/Minor– Critical/non-critical

• Analyse total spend

• Look for opportunities

• Set targets for cost reduction

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


BenefitsBenefits

• Total cost reduction• Effective negotiation• Lead time reduction• Quality improvement• Inventory reduction• On time deliveries• Co-development programmes• Integration• Long-term co-operation

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS



Procurement Management– Buyers who understand supplier processes– Buyers who can make deals

Supplier Relationship Management– Manages schedules– Deals with day to day issues– Encourages early warning– Keeps system up to date

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


SystemSystem

• Vendor Schedule• Total spend analysis by :

– Category of spend– Value

• Performance Measures– On time– Quality

• Make vs buy options

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Creation of Vendor Creation of Vendor ScheduleSchedule

1 2 3 4 5 6 7 8

Projected

Gross Requirements

10 10 10 10 20 20 20 20

Scheduled Receipts 20

Projected Available Balance

30

Planned Order Release

Supplier Schedule

Part Number : 14356 D escription : Red Pen

Line Part Number Description Qty ScrapPer

Factor10 43768 Pen Barrel 1 0.020 76452 Finished Nib 1 0.030 89563 Cap 1 0.0

Bills of MaterialPlanning Data• Lead Times• Order Quantities• Safety Stock


Vendor ScheduleVendor Schedule

Part

No.

1/7 8/7 15/7 22/7 29/7 5/8 12/8 19/8 26/8 Sept Oct 12 m

Total

23467 20 20 20 20 20 80 80 960

24566 10 10 30 60 60 1040

35467 35 70 70 35 35 140 140 1680

14376 20 20 40 40 160 180 1920

25436 10 10 10 40 80 620

Supplier : ACME Grinding Equipment Limited

Orders Pay for materials Visibility

Orders : Part Qty Due

145326 23467 20 1/7


Purchasing Task ForcePurchasing Task Force

# Activity Target Complete1 Task Force established with Purchasing as the Task

Force Leader

2 Establish Vendor Scheduling reporting process, and use.

3 Determine Purchasing Strategy based on current spend map

4 Determine measurement criteria for suppliers, and establish SMART goals to be shared with suppliers

5 Carry out Education programme with suppliers focussing on the key elements of the Purchasing strategy.

6 Set up Qualified Vendor group

7 Set up organisation that differentiated between Procurement and schedulers.



AccuracyAccuracyOf allOf all

Business DataBusiness Data

AccuracyAccuracyOf allOf all

Business DataBusiness Data


Data AccuracyData Accuracy

All data needs to be accurate• Bills of Materials• Routings• Inventory• Work Centre• Planning Data• Customer/Vendor data• Project Team Member



Sub-Teams ?• Inventory• Bills of Materials• Routings• Planning Data• Customer Data• Vendor Data• Financial Data



External Education– Data Accuracy Course– Bill of Material Course– Inventory Accuracy Course

Internal Education– Bills of Materials [Quality, Structure and Change

Control]– Routings– Inventory– Planning Data– Customer and Vendor Data

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS



Bills of Bills of MaterialsMaterialsBills of Bills of

MaterialsMaterials


BOM Task ForceBOM Task Force

Composition

• Technical Director [chair]

• Planning

• Marketing

• Purchasing

• Manufacturing



Steps to getting BOM Steps to getting BOM AccuracyAccuracy1. Identify how to get to

one single Database2. Assign responsibility for accuracy3. Check accuracy of sample group4. Get over emotional issues of part numbers5. Create BOM policies6. Get Control group to 100 %7. Fix Database8. Implement Change control process9. Continuously Monitor accuracy

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


BOM Task ForceBOM Task Force

Issues to address• Part numbers – non significant• Planning Bill and Configuration• What goes on the BOM• Backflush or not• Structure [simplify]• Engineering/Product Change Control• Link to Design/Development systems• Phase in/Phase Out• Responsibility

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


BOM StructuringBOM Structuring

1. Planning/ Stocking levels2. Implications on Costing3. Forecasting issues4. How to enter orders5. Master Schedule vs Final Assembly

Schedule6. Product Specifications/Quality

Documentation

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


BOM Change ControlBOM Change Control

1. Establish Formal process for controlling changes to Part Numbers, BOM’s and routes

2. Request for Change3. Documentation to support changes

• Engineering change request• Engineering change Notice• Audit trail of changes

4. Techniques for phasing in/phasing out of materials

5. BOM Change control group to monitor changes

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Example of Data Change FormExample of Data Change Form

Change Note Number : Date of Request : __/__/__ Change Type : Add/Amend/Delete

Originator: Effective Date:-Requested __/__/__-Actual __/__/__

Part number :

Department : BOM Attached ? : Y/N

Other Related Changes :

Reason for Request for change

Notification given to : Tick

Description of Change : Development

Manufacturing

Planning

Financial Consequences of Change : Purchasing

Quality

Sales and Marketing

Approved by : Date of Approval __/__/__ Regulatory


Example of Data Change Example of Data Change FormForm

Production Quantity on hand: Rework and Scrap Value

Quantity in WIP : Routing Change

Purchasing Supplier : New Part Number

New Cost : New Order Qty

On order : New Safety Stock

Quality Specifications : New Lead Time

Test requirements: Customer Code

Development Reference no,: Vendor Code

BOM Change note: Batch control

Sales Customers Financial Projection attached: Y/N

Quantity on hand

Finance Standard Cost Data Controller :

Regulatory Standards affected


BenefitsBenefits

1. Accurate Costs2. No duplication3. Ordering of right product in right

quantity4. Managed introduction of products –

less obsolescence5. Suppliers deliver right product at right

time

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS



1. Responsibility for• Add,Amend Delete

2. BOM Administrator

3. BOM Approval Group

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


SystemsSystems

1. Can accommodate design/development

2. Phantoms/Pseudos

3. Configuration ability

4. Where used facility

5. Single Level/Multiple level

6. Two level Planning Bill

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Process for getting Data Process for getting Data RightRight

0

20

40

60

80

100

120

1 2 3 4 5 6 7 8 9 10 11 12

Accuracy

Sample Group

Audit

Fix Data Base

Sample Group


Data Quality – Bills of Data Quality – Bills of MaterialMaterial# Activity Target Complete1 Task Force established with responsibility set up

under Development department

2 Bill of Material objectives agreed, with Target accuracy of 100 % of all BOM’s

3 Sample of current Bills of Material used to verify current level of accuracy of BOM’s

4 Bill of Material Policy Established on Accuracy of BOM’s and agreed

5 Correction of Database undertaken for the whole database.

6 Procedure for reporting of BOM inaccuracy completed and established.

7 Process for prompt correction of Bills of Materials within Development department agreed and established.

8 Bill of material Administrator role defined and filled within the Planning Deparment


Data Quality – Structure of Data Quality – Structure of Bills of MaterialBills of Material# Activity Target Complete1 Task Force established with responsibility set up

under Planning Function

2 Structure of BOM’s agreed with reference to the MPS task force and decision on MTS/ATO/MTO

3 Software checked to ensure that configuration ability is supported

4 Resource identified for restructuring of Bills of Materials.

5 Bill of Material Database populated with restructured Bills of materials.

6 Restructured Bills of Materials verified for accuracy as part of Bill of Material Quality audit.


Data Quality – Bills of Data Quality – Bills of Material Change ControlMaterial Change Control# Activity Target Complete1 Task Force established with responsibility set up

under Planning Function

2 Current change control procedures and policies reviewed for completeness

3 Software review of functionality for Change Control completed, and documented

4 New Procedures for BOM Change control identified, and established with policies in place for handling phase in and phase out

5 New procedures reviewed and agreed through pilot process

6 BOM Change control group established to review impact of proposed design and development changes



RoutingsRoutingsAnd And

Work CentresWork Centres

RoutingsRoutingsAnd And

Work CentresWork Centres


Steps to getting Routing Steps to getting Routing AccuracyAccuracy1. Identify how to get to one single Database

2. Assign responsibility for accuracy

3. Check accuracy of control group

4. Create Routing and Work Centre policies

5. Get Control group to 100 %

6. Fix Database

7. Implement Strong Change control process

8. Continuously Monitor accuracy


ROUTING ACCURACYROUTING ACCURACY

Basis :Basis : Represents the way that the product is made and moves through the factory via work centres

Represents the way that the product is made and moves through the factory via work centres

Missing/Unnecessary Operation

Missing Work Centre

Wrong Operation Sequence

Wrong Work Centre

No REALISTIC Standard

Missing/Unnecessary Operation

Missing Work Centre

Wrong Operation Sequence

Wrong Work Centre

No REALISTIC Standard

Types of Error :

Types of Error :


Ways to check accuracy of Ways to check accuracy of RoutingRouting

Check with knowledgeable people Track product through manufacture Assemble absolutely according to routing Performance measures shows

Late or early completion of product



InventoryInventoryAndAnd

Work-in-ProcessWork-in-Process

InventoryInventoryAndAnd

Work-in-ProcessWork-in-Process


Inventory Task TeamInventory Task Team

Composition• Warehouse Manager [chair]• Stores Supervisors• Production manager• Purchasing• Logistics• Planning• Project Team Member


Steps to Gaining Inventory Steps to Gaining Inventory AccuracyAccuracy

1. Establish levels of current accuracy2. Establish control group to identify causes of

errors3. Review material flows4. Create Limited Access5. Define systems and processes6. Educate users7. Train users8. Cycle count9. Eliminate annual physical10. Never give up the challenge

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Inventory Task TeamInventory Task Team

Issues to address• Limited access to stores• Process flows• Backflushing or not• Accuracy of equipment• Number of locations• Cycle counting• People in stores• Getting rid of the annual physical

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Cycle CountingCycle Counting

1. Part number cycle counting• Random• ABC Method

2. Location cycle counting• Fixed cycle by location• Count what is easy to count• Skip large amounts

3. Eliminate Annual physical

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


BenefitsBenefits

1. Less time spent looking

2. Reliable system

3. Accurate promises to customer

4. Less surprise write-offs

5. Less inventory

6. Planning system can be used

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS



1. Warehouse Manager responsible for accuracy

2. Stores people responsible for accuracy

3. Supervisors responsible for lineside accuracy

4. Only recognised personnel allowed in stores

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


SystemsSystems

1. Multiple Locations2. Locating system by location and part

number3. System reports

• Stock Status by part number• Stock status by location• Transaction history by Part number

4. Backflushing

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Process for getting Data Process for getting Data RightRight

0

20

40

60

80

100

120

1 2 3 4 5 6 7 8 9 10 11 12

Accuracy

Control Group

Audit

Fix Data Base

Control Group


Data Quality - InventoryData Quality - Inventory

# Activity Target Complete1 Task Force established with responsibility set up

under Warehouse Manager

2 Inventory Data Quality objectives agreed, with Target accuracy of 98 % of all items with 0 tolerance

3 Process for movement of inventory, and recording of Inventory Transactions completed

4 Review of required equipment and technology completed and recommendations accepted

5 Control Group cycle counting established, in order to identify errors

6 Control Group achieves 100 %

7 Policies and Procedures for Inventory process in Stores and Factory agreed and communicated.

8 Initialisation of Balances complete

9 Systematic Audit established using Process Control cycle counting.



Item MasterItem Masterandand

Planning DataPlanning Data

Item MasterItem Masterandand

Planning DataPlanning Data


Planning Data Task TeamPlanning Data Task Team

Composition

• Operations Director [chair]

• Manufacturing

• Purchasing

• Industrial Engineer

• Planning



Item Master Data Used Item Master Data Used in Planningin Planning

Part numberDescriptionUnit of measureMake or buyLead timeFirm Planned FenceOrder quantityMinimums and multiplesSafety stockScrap factorYield factorEngineering drawing numberCommodity codeFamily codePlanner/buyer codeCustomer address and code numberSuppliers address and code number

All must be accurate And thought through

correctly


Planning Data Task TeamPlanning Data Task Team

Issues to address

• Lead Time consistent with Manufacturing Lead Time

• Safety Stocks though through and understood

• Order Quantities set up in line with Manufacturing/Purchasing common-sense.

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS



Finance andFinance andSupportSupport


Finance andFinance andSupportSupport




• Finance Director [chair]

• Materials

• Manufacturing

• Marketing

• Quality

• Purchasing



Support Task ForceSupport Task Force

External Education– Top Management Course

Internal Education– Financial Planning and Costing– New Performance Measures

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Finance DesignFinance Design

• Link Annual Budget to IEP

process

• Costing updated from system

• Financial planning based on IEP

• Eliminate unnecessary financial inspection

• Eliminate Annual physical stock check

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


BenefitsBenefits

• Less duplication of data

• Eliminate wasted time on budget preparation

• More accurate costs

• Save time and money on inventory calculation

• Better base information

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Finance systemsFinance systems

• Integration of financial

planning with volume planning

• 36-42 months horizon

• Costing direct from BOM’s and routings

• Development of KPI’s from Data Warehouse

• Simulation ability for what-ifs

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Finance Task ForceFinance Task Force

# Activity Target Complete1 Task Force established with Finance manager as the

Task Force Leader

2 Establish Costing process based on BOM’s to reflect Standard or Average actual costs

3 Determine how Accounts Payable, Accounts Receivable and General Ledger will work

4 Develop process for providing Financial Planning process as linked to the IEP process

5 Establish how the Budget will be prepared from the ERP system

6 Develop reports from the system that will generate Cash Flow reports and simulations



PerformancePerformanceMeasuresMeasures

PerformancePerformanceMeasuresMeasures



• HR Director [chair]• Finance• Quality• Sales and Marketing• Manufacturing• Procurement• Development• Project Team Member


Performance MeasuresPerformance Measures

External Education– Performance Measures

Internal Education– New Performance Measures

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


New KPI’sNew KPI’s

1. Review Strategy

2. Determine key objectives

3. Develop the Delos Seven Measures

4. Assign responsibility

5. Establish root cause analysis

6. Develop Goal Deployment and relationship to Personal Goals

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Measurement - BasicsMeasurement - Basics

VISION AND STRATEGY

OBJECTIVESOBJECTIVES

TARGETSTARGETS

MILESTONESMILESTONES

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Link to Organisational Link to Organisational HierarchyHierarchy

Managing Director

Directors/Process Owners

Managers/Team Leaders

Operators/Team members

LINK THEM

VISION AND STRATEGY

OBJECTIVESOBJECTIVES

TARGETSTARGETS

MILESTONESMILESTONES

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Root Cause AnalysisRoot Cause Analysis

Inaccurate Forecast

Inaccurate Forecast

PeopleProcesses

Pessimism/Optimism

Lack of Time

Lack of Trust

Systems Data

Lack of Sales Plan

NPD Process

Lack of Forecasting System

Customer EDI SystemInaccurate Actual Demand Data

Wrong Code

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


BenefitsBenefits

1. Alignment to strategy

2. Congruent goals

3. Cascaded objectives and targets

4. Focus on operational measures and not results

5. Improved Return on Capital Employed

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS



1. Develop Process owners

2. Cross functional development of processes

3. Tie measures to personal goals

4. Personal Development plans

5. Teams to develop processes – not functional silos

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Process Measures Process Measures OwnershipOwnership

Sales Prod Tech Log Mktg

New Product Process NPDOwner

Sourcing Process SupplyOwner

Customer Process DemandOwner

NPDOwnerCreative Process

Business Support – Finance, IT, HR

SeniorManagement Team

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


SystemSystem

1. Data Warehouse to store Information2. Create reports direct from system3. Needs storage of original promise date to

customers and suppliers4. Needs Forecast accuracy reports5. Needs collection of data on deliveries to

customers6. Visibility of results for suppliers

AASSSSEESSSS

AASSSSEESSSS

EDUCATION

STRATEGY & DESIGN


ORGANISATION

SYSTEMS


Measures - IssuesMeasures - Issues

1. Traditional approach

2. Silo management

3. Corporate reporting process

4. Focus on Financial reporting

5. Actual versus budget


Measures - solutionsMeasures - solutions

1. Involve Corporate in development of measurement

2. Develop IEP in place of Annual budget

3. Eliminate many financial reports

4. Develop process ownership


People ValuesPeople Values

TraditionalTraditional NowNow FutureFutureProcess Process problemsproblems

Not my job Ownership Accountability

Management Management StyleStyle

Supervise Facilitator/

Team Leader

Coach

Working StyleWorking Style Individual Team Empowered

Teams

Training and Training and

EducationEducation

Non-existent Luxury Necessity

KnowledgeKnowledge Ignorant Understands Expert

Attitude to Attitude to PeoplePeople

Liability Cost Asset


Today’s RewardsToday’s Rewards

• Managing Director gets bonus if budget profit exceeded

• Marketing Director gets promoted if he beats profit target and budget

• Manufacturing Director gets paid if overheads recovered

• Technical Director gets delighted if complexity achieved

• Finance Director becomes Group FD if inventory reduced


Tomorrow’s RewardsTomorrow’s Rewards

• Based on targets and milestones

• Based on forward looking objectives

• Based on constant appraisal

• Based on throughput not output

• Need to recognise value of teams

• Recognises inventory as a liability


Appraisal ProcessAppraisal Process

• Continual through the S & OP process• Should involve 180˚ appraisal and appraisal

of peers through honest feedback• Requires enhanced people and team skills• Give and receive constructive review• Requires removal of blame culture• Reduced need for the cult of the hero


Link the Appraisal Process Link the Appraisal Process to the Strategyto the Strategy

StrategyStrategy Grow BusinessGrow Business Increase Market ShareIncrease Market Share

MeasuresMeasures

StrategyStrategy Grow BusinessGrow Business Increase Market ShareIncrease Market Share

MeasuresMeasures

Sales ManagerSales Manager … ….. … ….... … …......

Sales ManagerSales Manager … ….. … ….... … …......

Planning ManagerPlanning Manager … ….. … ….... … …......

Planning ManagerPlanning Manager … ….. … ….... … …......

R & D ManagerR & D Manager … ….. … ….... … …......

R & D ManagerR & D Manager … ….. … ….... … …......

New Product DirectorNew Product Director … ….. … ….... … …......

New Product DirectorNew Product Director … ….. … ….... … …......

Customer DirectorCustomer Director … ….. … ….... … …......

Customer DirectorCustomer Director … ….. … ….... … …......

Supply DirectorSupply Director … ….. … ….... … …......

Supply DirectorSupply Director … ….. … ….... … …......


Goal DeploymentGoal Deployment

EmployeesOwner

Supply ChainOwner

InnovationOwner

CommunityOwner

CustomerOwner

ShareholderOwner

TARGETSSenior Management

Business Support

Supply Management

Demand Management

New Activity Management

PERSPECTIVE

Process Owners

GOALS

Objectives

PROCESS


Performance MeasuresPerformance Measures

# Activity Target Complete1 Task Force established with Finance manager as the

Task Force Leader

2 Establish Vision, Goal and Objectives together with Targets for achieving the objectives

3 Establish how the system will provide Performance measures, and data for problem solving

4 Carry out Benchmarking exercise to establish best in class performance for targets

5 Layout Process ownership, and responsibility for cascaded sets of measures

6 Review current reward structures, and establish new performance measures contained within Personal Development Plans


Key activitiesKey activitiesMONTHS

Activity 0-3 4 4-7 8 9-11 11-14 15

Education Project Team Pilot Managers Pilot Users Internal Pilot Live

IEP Define Process Pilot Pilot process Pilot Add all families Pilot Live

Innovation Define Process Pilot Define policies Pilot Establish organisation Pilot Live

Demand Plan Define Process Pilot Define Policies Pilot Establish organisation Pilot Live

MPS MTS v ATO Pilot Define Policies Pilot Establish organisation Pilot Live

IRA Accuracy Control Group Init Cycle Counting Pilot Live

BOM Accuracy Find Errors Fix Errors Upload Live

BOM Structure Define Restructure and set up all Bills of Materials Live

Routings Find errors Fix Errors Live

Planning Data Define Set up Live

Purchasing Develop Purchasing Tools Pilot Educate all vendors Live

Manufacturing Develop Lean Manufacturing Pilot Establish across business Live

Finance Develop costing and IEP/Budget Link Pilot Develop costs, Inv and WIP values Live

Measures Develop Vision, objectives and measures Pilot Establish across business Live

Software PT debug Pilot Carry out Software modifications and interfaces Pilot Live

Documents

1 © The Delos Partnership 2004 Delos Excellence Project Implementation Process Design