DSIOP Process Review

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Davol DSIOP Process Review

Abigail Marchell Supply Chain Intern

Responsive Efficient Flexible Service

About Me

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•  From Hampton Falls, NH

•  Penn State University Class of 2017 •  Major: Supply Chain Management •  Minor: InternaNonal Studies

•  Davol Supply Chain Internship June 13, 2016 – August 12, 2016

Project Objec>ves


•  Gain comprehensive understanding of the S&OP process with specific focus of the DSIOP process at Davol

•  Review & evaluate the process in effort to highlight where there is room for improvements

•  Present possible improvement iniNaNves

Why is the DSIOP process important?


Benefits: •  Reduced customer lead Nmes & Higher customer service •  Lower operaNng costs •  Lower finished good inventories •  More stabilized producNon rates •  Improved new product launch •  Top-‐line growth, etc…

v  SIOP is a formal management process that creates a unified business plan, collaboraNon & consensus among an

organizaNonal cross-‐funcNonal team results in an integrated set of plans that all stake holders understand and are

commiêd to support

h^ps://demandcaster.zendesk.com/hc/en-‐us/arNcles/207561306-‐IntroducNon-‐to-‐Sales-‐OperaNons-‐Planning-‐S-‐OP-‐

S&OP vs. Davol SIOP


S&OP Process Map:

Davol SIOP Process Map:

Project Focus on DSIOP

Prepara>on


•  Read Sales & Opera+ons Planning: The How-‐To Handbook, 2nd Edi+on, by Wallace & Stahl

•  Completed Accenture Academy courses related to S&OP topics

•  Researched and gathered addiNonal reference material from creditable arNcles and case studies

•  Observed DSIOP process at Davol •  Aênded DSIOP & SSIOP meeNngs •  Held 1-‐on-‐1 interviews with cross-‐funcNonal peers within Finance, MarkeNng, & Supply Chain

Data


Survey: •  40 quesNon online survey

•  Open-‐ended & number ranking quesNons (1-‐4)

•  QuesNons derived from The How-‐To Handbook

•  Sent out to 22 recipients within Finance, MarkeNng, and Supply Chain

Name Role 1 Mehdi Syed Finance 2 Margaret Paolo Finance 3 Sco^ Pisarczyk MarkeNng 4 JusNne Advani MarkeNng 5 Bethanie Benoit MarkeNng 6 Melissa Bowley MarkeNng 7 Brian Leach MarkeNng 8 ChrisNna LiVecchi MarkeNng 9 April Megow MarkeNng 10 JusNn Pessa MarkeNng 11 Tara Smith MarkeNng 12 Amy Spinney MarkeNng 13 Beth Stewart MarkeNng 14 Kendra Winchester MarkeNng 15 John Mazzola OperaNons 16 Andries Elburg Supply Chain 17 Shubhonil Banerjee Supply Chain 18 Jennifer Darmanin Supply Chain 19 Larry Dionne Supply Chain 20 Charles Shores Supply Chain 21 ChrisNne Zina Supply Chain 22 Tony Balliro Supply Chain

Davol DSIOP Survey Recipients

Data


Interviews: •  1-‐on-‐1 meeNngs to gather addiNonal feedback •  Go into more depth of DSIOP process and where there is

room for improvement •  Used survey quesNons to facilitate conversaNon/discussion

Interviewees: •  Sco^ Pisarczyk – VP MarkeNng •  Bethanie Benoit – MarkeNng Director •  Kendra Winchester – MarkeNng Director •  Margaret Paolo – AccounNng Director •  Mehdi Syed – VP Finance •  Charles Shores – Supply Chain Product Manager •  Andries Elburg – Supply Chain Planning Analyst •  Tony Balliro – Supply Chain Senior Director

Results


Survey: •  12 responses of 22 (55% parNcipaNon rate) •  Each department represented (Finance, MarkeNng, &

Supply Chain)

•  Calculated average ranking for each quesNon & highlighted top scored and boôm scored quesNons

•  No glaring outliers where process is seriously lagging

Highest Scored Survey Ques>ons


•  3.67: ForecasNng occurs on a monthly cycle, or possibly more frequently where appropriate

•  3.50: The sum of the detailed forecast equals the aggregated forecast

•  3.50: MeeNng dates are scheduled well into the future to maximize aêndance

•  3.25: Sales forecasNng is being done in both units and dollars

•  3.08: Forecast error is rouNnely measured and efforts are made to reduce it

•  3.08: Teamwork and good communicaNon processes are widely recognized as the key to beêr forecasts

Lowest Scored Survey Ques>ons


•  2.08: MeeNngs are excepNon-‐based and only focus on the issues that require re-‐evaluaNon

•  2.09: There is a formal summarizaNon of informaNon and issues that gets elevated in an ExecuNve SIOP Review on a monthly basis.

•  2.20: The DSIOP team decides what recommendaNons to make for an execuNve review

•  2.25: Members of the Finance funcNon play an important role in the SIOP Process to ensure that the plans have financial validity

•  2.36: When performance is outside the agreed upon tolerances, then invesNgaNon and correcNve acNon is iniNated

•  2.50: The forecasNng cycle includes a formal step to relate the newly developed forecast to the economy, the industry, and share expectaNons

•  2.50: Efforts are made to discover the root causes of bias and to eliminate them

Interview Results/Feedback


Areas for improvement: •  Need for improved forecasNng

tools and updated technologies •  Need for standardized training and

introducNon to SIOP process for new employees

•  Change culture from a “sharing numbers exercises” to excepNon based discussions

•  Need for beêr cross-‐funcNonal understanding of SSIOP process and communicaNon of necessary supply & inventory reports

•  Need for implementaNon of formal ExecuNve SIOP to follow DSIOP & SSIOP in the monthly process

Working well: •  Confident with cross-‐funcNonal

communicaNon & collaboraNon •  ForecasNng is being shown is

both units and dollars •  Monthly meeNngs are

scheduled well in advance •  DSIOP deck along with agenda is

sent out prior to meeNng •  Sales forecast is being

compared to divisional BVR commitment to ensure alignment

•  Data package allows for disaggregaNon for addiNonal analysis

DSIOP Process Maturity


Sales and Opera+ons Planning: Design and Implementa+on of S&OP process in a mul+na+onal company, Gonçalo Maria, Eva Ferreira, Neves Lima

*The Process Maturity Model asses the current S&OP status of a company and idenNfies the steps the company needs to take to achieve the opNmum level of S&OP

Yellow highlighted area represents evalua>on of Davol’s DSIOP process maturity

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Process Improvement Ideas & Recommenda>ons

Improvement Ini>a>ve #1


v  Alignment of educaNon & understanding of the end-‐to-‐end SIOP process •  Building a strong foundaNon for a successful process

•  AcNon List: •  Lunch and learn sessions •  DSIOP process purpose page in DSIOP monthly deck

•  Standardized educaNon of new hires involved in process

Improvement Ini>a>ve #2


v  Focus on the objecNve of excepNon-‐based DSIOP discussion meeNngs •  Change culture of “show-‐and-‐tell” to decision-‐making sessions

•  AcNon List: •  DSIOP process purpose page in DSIOP monthly deck

•  Upper management funcNonal support in DSIOP meeNngs

•  Don’t stop at the “what”, always ask & explain the“why”

Example of DSIOP Process Purpose Page


*Example taken from BPV DSIOP deck

Addi>onal Improvement Ini>a>ves


AcNon List: •  Set threshold level when measuring forecast error and forecast bias •  If bias exceeds a designated threshold a “red flag” is raised and forecasters then reexamine the data

•  Improve formal step to relate the newly developed forecast to the economy, the industry, and share expectaNons by incorporaNng econometrics forecasNng & IMA data

•  Update/improve technologies and forecasNng tools •  Standardize data & reports used to drive forecasNng •  Incorporate WMAPE & forecast value-‐add

Benefits


v These process improvement iniNaNves can lead to a more efficient & effecNve SIOP Process that will ulNmately have a posiNve impact on the businesses key performance metrics:

•  Reduced customer lead Nmes & Higher customer service

•  Lower operaNng costs •  Lower finished good inventories •  More stabilized producNon rates •  Improved new product launch •  Top-‐line growth, etc…

In Summary…


v  ConNnuous educaNon & learning sessions on SIOP (purpose, scope, and expected outcomes)

v  Change “ show-‐and-‐tell” numbers exercise to excepNon-‐based reviews & discussions

v  Establish senior level management support & involvement

v  Improve forecasNng tools and performance measurements (incorporate thresholds, econometrics forecasNng, IMS data, FVA, & WMAPE)

v  ConNnue working towards implementaNon of a formal ExecuNve SIOP

Work Cited


Gonçalo Maria, Eva Ferreira, Neves Lima. Sales and Operations Planning: Design and Implementation of S&OP Process in a Multinational Company. N.p.: n.p., 2013. Web. 20 July 2016. <file:///C:/Users/amarchell/Downloads/Sales%20and%20Operations%20Planning-%20Design%20and%20Implementation%20of%20S%20&%20Op%20(2).pdf>. "Introduction to Sales & Operations Planning (S&OP)." DemandCaster Support. Cadent Resources, Inc., 2016. Web. 24 July 2016. <https://demandcaster.zendesk.com/hc/en-us/articles/207561306-Introduction-to-Sales-Operations-Planning-S-OP->. Wallace, Thomas F., and Robert A. Stahl. Sales & Operations Planning. 3rd ed. N.p.: T.F. Wallace, 2014. Print.

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DSIOP Process Review