BOBST spares supply chain transformation program

www.bobst.com

BOBST Spares Supply Chain Transformation Program

ISLA Conference - Hamburg, May 17th 2017

BU SV Transformation Program – Kick off | Julien Laran | © BOBST | 17/05/2017 | PAGE 2

BOBST

www.bobst.com

xx

• …


BOBST companies & global networkAt a glanceHeadquarters in Switzerland• 11 Production facilities• 50 Local entities• 3 industries served:

• Folding Carton• Corrugated Board• Flexible Material

• 5’000 employees• CHF 1,3 billion turnover


SERVICESVISION - MISSION


BU Services Vision & MissionHigh quality is our motivation

Bobst Services are perceived as the benchmark in our industry

We are passionate about delivering world class services for world class machines

VISION MISSION


DSF/PCR

Management team BUS

BU Services Organization

FFG/DRO LAM GRV, C&L FLX VAC

Market/Front office

Customers

Customer Loyalty

SCM & Operations

Sales & Marketing

R. Indermühle

BU Services

S. März

T. Robert

J. Laran R. Peltier E. Martin W. Liechti P. Oglietti M. McInulty P. Atherfold

Business Controlling

L. Danis

AssistantE. Stacherinvitees

C. Falk

WF Services


RSM

FSTTSS

1710036

2317

27312218

2172

149412

58

654212

Service OrganizationUnique global service network

• 12 BOBST Services Centers• 24 Local Entities• 9 spare parts warehouses ww• 6 second level support locations

• 18 000 machines to support• 550 000 order lines delivered/year• More than 800 technicians • More than 12 000 man years

of experience

Spare Parts ExpertsRegional Service MgrField Service TechnicianTechnical Service Support

SCM 207


BOBST SPARES SUPPLY CHAIN : STARTING FROM A COMPLEX SITUATION


Serving extended Life Cycle prime productMachines serviced over 40 years

50% of parts sales on machines older than 15 years20% of parts sales on machines older than 25 years

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Spar

es sa

les M

CHF (

2013

)

Machine construction year


0

5'000

10'000

15'000

20'000

25'000

1 10 100 1'000 10'000

Num

ber o

f par

ts

# orderlines in last 10 years

Part order frequency distributionSlow-movers integral part of spares business

• 55% of part numbers are ordered less than once every 2 years

Source: analysis on BSA portfolio between 2004-2014


HOW CAN WE TRANSFORM A SPARE PARTS SUPPLY CHAIN?


Agree a way to measure service level internally and with your customers

CustomsInventory Transport

ON TIME SHIPPED CONTRACT EXW : BOBST RESPONSIBILITY

Warehousing

ON TIME DELIVERED CONTRACT EXW : CUSTOMER RESPONSIBILITY

Order management

Inventory availability is the % of customer’s ordered line available on stock when the order is received

Spare parts inventory availability is representing 90% of the final customer service level


Targeted Service Levels: a basis to define the overall supply chain strategy

SITUATION PREMIUM CARE PLUS CARE WITHOUT CONTRACT VIP

24/75 DAYS / WEEK 8:00 AM TO 8:00 PM

ET5 DAYS / WEEK 8:00 AM

TO 8:00 PM ET5 DAYS / WEEK 8:00 AM TO

8:00 PM ET

PRIO 1 PRIO 1 PRIO 1 PRIO 1CALL BACK TSS within 1 hour within 1 hour within 1 hour within 1 hour

FST DISPATCH within 24 hrs within 24 hrs within 24 hrs within 24 hrs

SPARE PARTS DISPATCH (OUT OF STOCK) within 24 hrs within 24 hrs within 24 hrs within 24 hrs

PRIO 1 PRIO 1 PRIO 2 PRIO 1CALL BACK TSS within 1 hour within 1 hour within 24 hours within 1 hour

FST DISPATCH within 24 hrs within 24 hrs within 5 days within 24 hrs

SPARE PARTS DISPATCH (OUT OF STOCK) within 24 hrs within 24 hrs within 48 hrs within 24 hrs

PRIO 3 PRIO 3 PRIO 4 PRIO 3CALL BACK TSS within 3 hours within 3 hours within 24 hours within 3 hours

FST DISPATCH within 5 days within 5 days within 10 days within 5 days

SPARE PARTS DISPATCH (OUT OF STOCK) within 48 hrs within 48 hrs within 5 days within 48 hrs

PRIO 4 PRIO 4 PRIO 5 PRIO 4CALL BACK TSS within 24 hours within 24 hours within 48 hours within 24 hours

FST DISPATCH within 10 days within 10 days within 15 days within 10 days

SPARE PARTS DISPATCH (OUT OF STOCK) within 5 days within 5 days within 10 days within 5 days

WARRANTY CASES FOLLOW THE SAME PRIORITIESMACHINES LESS THAN 20 YEARS CONSIDERED

MACHINE DOWN

MACHINE NOT DOWN

OTHER REQUESTS

HEALTH AND SAFETY


Clear business targets set since the beginning to stay focus on them

•Costs: Decrease by 8% direct purchasing costs on parts

•Process: Increase process efficiency and reduce by 7% SCM staff worldwide

•Customers: Increase distribution performances while harmonizing them for all technologies creating an integrated supply chain to match 95% of parts delivered on time

•Suppliers: Improve suppliers performance and match with 80% of parts received on time

• Inventory: Increase spare parts availability to 85% - 95% depending on the sites while reducing stock levels (minus 3 MCHF from 2013 to 2016 with ISO turnover hypothesis)


Set a global transformation program addressing all leverages: slice the elephant !

Integrated Supply Chain Management

Global integrated inventory planning Centralized strategic planning Local operational planning

Lower stock level Optimize availability

Global sourcing policies Unified practices across PL’s

Reduce suppliers lead-times Reduce purchasing cost

Define global SCM processes Implement optimized SCM

processes & systems

Improve process efficiency Reduce reaction time

Inventory planning

Sourcing management

Process & Systems

optimization

Logistic Network

Assess the current logistic network Design a new logistic network

Speed up parts delivery Reduce logistic cost


PROCESS AND ORGANIZATION TRANSFORMATION: FROM INTERNAL ORIENTATION TO CUSTOMER ORIENTATION


StockPlanning

CU

STO

MER

BOBS

TSE

RVI

CE

CEN

TER

STOCKPLANNING& QUALITY

LOGISTICS

EXTE

RN

AL

VEN

DO

RS

OR

DER

FU

LLFI

LMEN

T

INTE

RN

AL

VEN

DO

RS

SPECIAL PROCUREMENT

STANDARD PROCUREMENT

Order management Sourcing & Planning

Organizational design: based on thesupply chain book of standard

URGENT DESK

Process & Systems

optimization


Organization and system core model

Sourcing

Strategic Planning

Logistics

SCM

Customer Services

Projects

Operational Planning

Warehouse mgmt.

Logistic Provider

Local PL

Central SCM

Process & Systems

optimization

ONE SINGLE SAP SOLUTION WW

SIXNERGY

1. Standardize processes

2. Simplified invoicing for parts

3. Same distribution network

4. Service Level global follow up

5. Severity Scheme implementation

6. Supply Chain efficiency improvements


From silos to functional expertise and operational focusBUSV Group supply chain organization

Head ofBUSV Supply

ChainArnaud Zuber

Head ofStrategic PlanningHiring in progress

Head ofCustomer Service

Jean Chavanne

Head ofSourcing

Arnaud Zuber (a.i.)

Supply Chain Analyst

Benjamin Rubattel

Supply Chain Operations DSF/PCR

Hervé Lepivert

Supply Chain Operations FFG/DRO

Jean Chavanne

Supply Chain Operations

FLXStefan Werning

Supply Chain Operations GRV/C&L

Alessandro Dusio


LAMSimon Dick


VACPaul Gardner

13 BCCCustomer Service

Head ofBUSV Supply Chain

& OperationsJulien Laran

Process &

Systems optimizat

ion

Head of LogisticTBD


LOGISTIC NETWORK EVOLUTION: FROM LOCAL WAREHOUSES TO REGIONAL HUBS


Current Logistic network

ManufacturingDistribution

Lausanne50’000 SKU94% avail.630 suppliers

Lyon21’000 SKU92% avail.400 suppliers

Roseland31’000 SKU87% avail.240 suppliers

Bielefeld4’000 SKU72% avail.318 suppliers

San Giorgio1’200 SKU40% avail.377 suppliers

Singapore8’200 SKU82% avail.6 suppliers

Logistic Network


BOBST will subcontract all activities related to warehousing and parts distribution in the world. The ownership and management of stock will remain under BOBST full responsibility

2017 20162018

New Logistic NetworkA sequenced implementation Logistic

Network

APAC results :

• Availability: from 70 to 90%

• Costs of slow moving: -30%

• Parts delivery time: -50%

• Stable global costs

• Customer’s costs: -40%

• Turnover: +10%


INVENTORY PLANNING TRANSFORMATION: FROM LOCAL INVENTORY PLANNING TO CENTRAL STRATEGIC PLANNING


Integrated Inventory ManagementCentralized planning

Local planners America

Local planners Asia

Worldwide strategic planning function

Local planners Europe

Inventory planning


• Stable global service parts inventory• Improved parts availability from stock• +19% volume increase absorbed with same structure

Demonstrated resilienceSupply Chain Performance

Location KPI 2013 2016 Est Var

Lausanne INV (CHF) 38.6 37.3 -3%

Fil l-rate 90% 92% + 2 pts

Orderlines 247'000 306'000 + 24%

Lyon INV (EUR) 9.9 11.4 15%

Fil l-rate 92% 93% + 1 pt

Orderlines 83'000 102'000 + 23%

Roseland INV (USD) 30.3 30.2 0%

Fil l-rate 78% 82% + 4 pts

Orderlines 173'000 189'000 + 9%

Inventory planning


SOURCING FUNCTION IMPLEMENTATION : HOW TO PUT OUR SUPPLIERS IN A CENTRAL ROLE


Sourcing directCombining cost and performance

Created a BUSV Sourcing organization• Standard sourcing: drive stock

replenishments and manage supplier base: cost / efficiency orientation

• Rapid sourcing: support Urgent Desk and source non-stock items: performance orientation

• Polyvalent suppliers identified for mechanical parts

• Time & Material approach• High reactivity requested

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2014 2015 2016 2017

Savi

ngs (

with

car

ry o

ver)

MCH

F Target

Actual/Plan

Sourcing management

12% savings on direct material and 85% OTD


Introduction of new packaging slution• Replaces wooden crates• One box can be adapted to several volumes• Speedy inspection by Customs• 0.6 MCHF savings on packaging & 0.3 MCHF savings on transportation

(BSA savings/year)• Deployed to other sites

Sourcing indirectPackaging: think carton and not wood! Sourcing

management


SUPPLY CHAIN TRANSFORMATION KEY SUCCESS FACTORS


Head of Supply Chain & Operations

J. LARAN

Sourcing Implementation

M. BRETONIERE

Program Controlling

L. DANIS

Program Risks Management

E. VASSALLI

Program Change Management & Training

M. OCAK

Integrated Inventory Planning

A. ZUBER

Logistic Distribution Network

C. GODINOU

Process & Systems

R. ZARAIP. SAVARADJ

Web Fed Service Up

F. ROCH

3 FTE 3 FTE 3 FTE 2 FTE5 FTE

0.4 FTE

0.1 FTE

0.1 FTE0.7 FTE

Design a dedicated project organization Highly skilled and empowered people


Set a realistic implementation planning agreed with all stakeholders

2015

CIM new version “Tactics”

New inventory sizing for APAC area (85% availability)

Centralized inventory management

Web Fed inventories planning with enhanced availability (60% ROT –70% FKG)

New SCM process and organization core model in Lausanne / San Giorgio

Purchasing costs reduction (1.4MCHF direct / 0.4 MCHF indirect)

New Sourcing team implementation and coaching

Suppliers monitoring implementation

Digital printing process and IT industrialization

IT evolutions for APAC logistic network

Commercial lead-times upload for customers

Full automated inventory planning for Web Fed

APAC and AMERICAS replenishment centralized per PL

New SCM process and organization core model in Bielefeld

Purchasing costs reduction (3.5MCHF direct / 0.7 MCHF indirect)

Suppliers monitoring implementation sheet fed (KPI / Meetings / Escalation process..)

External polyvalent sources for urgent orders Sheet Fed

APAC logistic network GOLIVE (Singapore CW)

IT evolutions for AMERICAS logistic network

SCM Process and ECC evolutions for Web Fed and Sheet Fed

AMERICAS logistic network GO LIVE

Installed base implementation for inventory planning

Purchasing costs reduction (5MCHF direct / 0.7 MCHF indirect)

Suppliers monitoring implementation web fed (KPI / Meetings / Escalation process..)

External polyvalent sources for urgent orders Web Fed

IT evolutions for EMEA logistic network

2016 2017

EMEA logistic network GO LIVE

Call for tender for new Advanced Planning System for spare parts

Direct costs saving program for Web Fed

EMEA logistic network post GO LIVE support

SCM organization fully functional with core model implemented in all PL

New SCM Services (Repair / Standard Exchange / Loan…)

2018


BUSV Transformation initiatives: How Transformation Program cover our customers feedback? (based on NPS Score)

Source: https://bobst.Satmetrix.com, November 15th 2016

BUSV TRANFORMATION INITIATIVES

N° Action Driver Score 2014 Score 2015 Satisfaction

Score 2016Response

2016SUPPLY CHAIN

CUSTOMER PORTAL

PEOPLE DEVELOPMENT

KNOW HOW MANAGEMENT

MOBILE FST

L1/L2 TICKETING

SIMPLIFIED INVOICE

1 Overall Satisfaction with Interaction 7,68 7,85 7.90 1763 X X X X X X X2 Professionalism 8,33 8,43 8.51 1549 X X X X X X X3 Technical Ability satisfaction 8,25 8,36 8.40 1523 X X X X4 Time to Resolve request 7,54 7,8 7.67 1275 X X X X5 Initial contact with Helpdesk 7,74 7,84 7.87 1222 X6 Time to qualified Call Back 7,56 7,63 7.66 1184 X7 Time for Part to arrive 7,55 7,63 7.73 1040 X X8 Time to Identify part 7,57 7,81 7.83 993 X X X X9 Performance of the Equipment 7,87 8,02 8.01 297 X X10 Reliability of the Equipment 7,73 7,83 7.83 292 X11 Time to Resolve problem 7,31 7,56 7.72 282 X X X X12 Time for Engineer to arrive 7,35 7,21 7.34 252 X X X13 Time to get in contact with right person 7,77 8,09 7.49 205 X14 Engineer arrived on time 7,96 8,07 8.03 76 X15 Fulfilled Training Expectation 7,52 7,32 7.98 54 X X X16 Accuracy of delivery time 7,6 7,21 7.22 40 X X X17 Quality of Info prior to delivery 7,26 7,34 7.89 38 X X X X

Transfo Program

30 - XXX

Supply Chain Rolling 365People Development 365

Customer portal 365L1/L2 Rolling 365

An automatic set of KPI to track and share our Bobst performance.

Monthly report based on a specific set of KPI, PI & I

Follow closely the results and communicateCustomer satisfaction: share it !

https://bobst.satmetrix.com/



•Costs: Decrease by 8% direct purchasing costs on parts: 12% achieved

•Process: Increase process efficiency and reduce by 7% SCM staff worldwide: 20% achieved

•Customers: Increase distribution performances while harmonizing them for all technologies creating an integrated supply chain to match 95% of parts delivered on time: 93% achieved

•Suppliers: Improve suppliers performance and match with 80% of parts received on time: 85% achieved

• Inventory:

• Increase spare parts availability to 85% - 95%: 80% - 94% achieved

•Reduce stock levels (minus 3 MCHF from 2013 to 2016 with ISO turnover hypothesis): Same stock level with 20% volume increase / 25% turnover increase

Follow closely the results and communicateMain achievements


Support your project team !This is key to make it happen

www.bobst.com

Thanks a lot for your attention !

Documents

BOBST spares supply chain transformation program