1 © The Delos Partnership 2003 Global Strategic Operations Planning One set of numbers at all times

1 © The Delos Partnership 2003

Global Strategic Operations Global Strategic Operations PlanningPlanning

One set of numbers at all times


Opening discussionOpening discussion

1. Consider three cases where a customer has got what they wanted, but with unnecessary cost to the business, and review how this happened.

2. Consider three cases where you know that a customer has not got what they want and review why you think this happened.

3. Review existing performance measures and see how these help add value to the customer’s experience with MD-I.


Objectives for Global Strategic and Objectives for Global Strategic and Operations PlanningOperations Planning

• One set of numbers at all times

• Integrated Plans

• Teamwork

• Decisions made in timely fashion

• Consistent performance measures


Conflicting Objectives ?Conflicting Objectives ?

Inventory/Capacity

Customer Service

ManufacturingCosts

ManufacturingFlexibility


Conflicting ObjectivesConflicting Objectives

Finance

Marketing

Manufacturing Sales


Vertical Functional OrganisationVertical Functional Organisation

MDMD

SalesSales MarketingMarketing TechnicalTechnical OperationsOperations FinanceFinance HRHR

R& D

R& D

MKTG

MKTG

SALES

SALES

OPS

OPS

ACCTS

ACCTS

HR

HR

Directors

Managers

Supervisors/Team Leaders


Disintegrated Business PlanningDisintegrated Business Planning

Long termplan

Short termPlan

Medium TermPlan


Lack of VisibilityLack of Visibility

05

10152025

303540

4550

Sales Cont'n Net Profit

Last YrBudgetYTD

Year to date is below budget and last year, and therefore there is an urgent need to cut costs, and reduce inventory, in order to improve cash flow…


Disintegrated Business PlanningDisintegrated Business Planning

Annual operatingPlan

Master ProductionSchedule

SupplierSchedule

FactorySchedule

£’s/Euros/$

18 months

1/ year

SKU’s

12 weeks

1/week


Strategy vs ExecutionStrategy vs Execution

““It is not so much the strategy that causes It is not so much the strategy that causes the failure. 80 % of companies fail to the failure. 80 % of companies fail to execute their strategy”execute their strategy”

- Kaplan and Norton : “Strategy Focussed - Kaplan and Norton : “Strategy Focussed

Organisation”Organisation”

““It is not so much the strategy that causes It is not so much the strategy that causes the failure. 80 % of companies fail to the failure. 80 % of companies fail to execute their strategy”execute their strategy”

- Kaplan and Norton : “Strategy Focussed - Kaplan and Norton : “Strategy Focussed

Organisation”Organisation”


Vision and StrategyVision and Strategy

• Vision– Clear statement of direction– Understood by all

• Strategy– Means of getting there– Requires clear focus

• Operational Excellence• Customer Intimacy• Product Leadership


Setting the VisionSetting the Vision

•Simple•Owned by the Managing Director•Understood by everyone•Visible•e.g. Simply the best


Vision – Messier-DowtyVision – Messier-Dowty

To be the world leader in Landing Gear Systems

as viewed by our

Customers, Employees, Shareholders,Suppliers


StrategyStrategy

Clear Focus on overall strategy– Strengths/Weaknesses/Opportunities/

Threats– Market Position– Competitive Position– Technological Position


TeamworkTeamwork

With a common vision and a strategy there is a chance to develop common

•Objectives

•Commitment

•Team direction


Supporting ProcessesSupporting Processes

There are three key supporting processes– Innovation

• New products• New processes

– Customer Relationship management• Sales linkage• Marketing linkage

– Supply Management• Internal Factories• External suppliers


Delos Business ModelDelos Business Model

Strategy

PrioritisationPrioritisation

Changes

Vision

Demand Supply

Support


Management of InnovationManagement of InnovationNeeds Management across all the projects


Demand Planning Needs a Simple Demand Planning Needs a Simple ProcessProcess

FilterDemand

Execute Forecast

CaptureActual

C O N S E N S U S C O N S E N S U S F O R E C A S TF O R E C A S T

Review Commercial Plans

Review ExceptionalDemand

Hold Demand Review

Assumptions written down and agreed


Master SchedulerMaster Scheduler

Strategy

Master Scheduler

Sales Forecasts

CustomerOrders

ManufacturingPlan

PurchasingPlan

ERPSystem

Balanced PlanBalanced Plan


In Balance ?In Balance ?

0

20

40

60

80

100

120

140

1 3 5 7 9 11

Demo Cap

Req Cap



• Which customer gets preference

• Spares or Original Equipment

• New product versus existing product

• Which market gets supply

Must be balanced


GS&OP Gap AnalysisGS&OP Gap Analysis

Strategic planStrategic plan

Time Now

SOP ForecastSOP Forecast

Actual statusActual status

years

profitprofit

outputoutput

revenuerevenue

profitprofit

outputoutput

revenuerevenue

What is the GAP and what are the action plans to close it?What is the GAP and what are the action plans to close it?


Strategic Operations PlanningStrategic Operations Planning

Annual OperatingPlan

Monthly Review

Master ProductionSchedule

SupplierSchedule

FactorySchedule

Volume [Family]Value42 months horizon

Volume [Family]Value30 months horizon

Volume SKUValue18 months horizon

Volume [Part number]Value18 months horizon


MeasurementMeasurement

What gets measured is whatGets done

What gets measured is whatGets done

Actual versus Budget

Actual versus target

Actual versus Budget

Actual versus target

Traditional Measures


On track …On track …“From looking at the wake behind the ship, I cansee we are still on course…”


Delos Business ModelDelos Business Model

Strategy


Changes

Vision

Demand Supply

Support


Velocity MeasureVelocity Measure

STORE

STORE

INSPECT

INSPECT

RECEIVE

RECEIVE

PICK

PICK

RUN

RUN

INSPECT

INSPECT

STORE

STORE

RUN

RUN

INSPECT

INSPECT

STORE

STORE

Elapsed Time

VAVA VAVA

Velocity % = sum of Value Added Time [VA]-------------------------------------

Total Elapsed Time


Global Strategic Operations Global Strategic Operations PlanningPlanningIs not

• A meeting for the Production scheduler and Customer Services Manager

• Operations Scheduling

• Detailed Capacity Planning meeting

• Sorting out next week’s plan


Global Strategic and Operations Global Strategic and Operations PlanningPlanningIs :• A formal process for communicating

requirements [Demand] and capabilities [Supply]

• A means for resolution of medium term to longer term issues

• The way of delivering the strategy by developing plans to close the gaps


GlobalisationGlobalisation

In a global business

• Customers do not mind where the product comes from

• Customers expect same level of performance wherever it comes from

• Customers expect same level of quality and speed of response


GlobalisationGlobalisation

Global companies need• Common processes• Common levels of quality• Common policies and procedures• Common measures of performance

• To deliver the common standards that the customers come to “take for granted”


Integrated BusinessIntegrated Business

VisionAnd Strategy

Processes

People

Improvement

Measures

CustomerService

ShareholderPerformance

Innovation

Suppliers


Global Strategic Operations Global Strategic Operations PlanningPlanning• Needs a vision and strategy• Requires integration of the key processes• All-embracing performance measures

– Measuring processes and not people

• Needs a formal process to support it• In a global organisation needs global and

local integration

Documents

1 © The Delos Partnership 2003 Global Strategic Operations Planning One set of numbers at all times