Upload
others
View
7
Download
0
Embed Size (px)
Citation preview
2003 © Mohit Juneja & Divakar Rajamani
Lecture Series: Consumer Electronics Supply Chain Management
Mohit Junejai2 Technologies
Divakar Rajamani, Ph.D.University of Texas at Dallas
Center for Intelligent Supply Networks (C4ISN)
2003 © Mohit Juneja & Divakar Rajamani
Lecture 3: OEMs and Sales Companies Planning Processes
2003 © Mohit Juneja & Divakar Rajamani Slide 3 Center for Intelligent Supply NetworksC4ISN
Agenda
CE Products and Supply Chain StructureCE Planning Processes and RolesOEM and Sales Companies Planning Processes
Demand PlanningSupply PlanningAllocation Planning
Summary: Demand and Supply Balance
2003 © Mohit Juneja & Divakar Rajamani
CE Products and Supply Chain Structure
2003 © Mohit Juneja & Divakar Rajamani Slide 5 Center for Intelligent Supply NetworksC4ISN
PV-SD5000
Digital Still Cameras
Electric Shavers
Plasma TV
VCR’S
End Product Offerings - Diverse Product Range
4-month life cycle
50 % sales done in
December
Hi TechLow turn
High Margin
CommodityLow TechHigh Turn
Low Margin
2003 © Mohit Juneja & Divakar Rajamani Slide 6 Center for Intelligent Supply NetworksC4ISN
Consumer Electronics US Market Sales
US Consumers bought 95 billion dollars of CE product in 2002
2003 © Mohit Juneja & Divakar Rajamani Slide 7 Center for Intelligent Supply NetworksC4ISN
Supply Chain for End Product
2003 © Mohit Juneja & Divakar Rajamani Slide 8 Center for Intelligent Supply NetworksC4ISN
Industry Characteristics4 month lead time
Built to stock Delays,Out of stockOverstocked
Coordination
2003 © Mohit Juneja & Divakar Rajamani Slide 9 Center for Intelligent Supply NetworksC4ISN
CE Industry Issues
High degree of parts customizationLong R&D design process timesLong lead time to create additional capacity for custom partsPoor customer service / supply flexibilityLow re-use of partsShort component life cycles leading to service issues
High supply risk due to reliance on custom partsShort product lifecyclesHigh demand unpredictability, inflexible manufacturingUnresponsiveness to demand signals due to manual monthly planningFragmented procurement across factories
Inventory boom-bust cycle (bull-whip effect)Low customer service levelsGeographically fragmented supply chainMargin erosionHigh spares inventory, inconsistent availability
Stock outsReducing marginsHigh logistics costsHigh inventory, store level stockoutsHigh promotions costs
COMPONENTSUPPLIERS
OEMs SALES COMPANIES
RETAILERS
2003 © Mohit Juneja & Divakar Rajamani
CE Planning Processes and Roles
2003 © Mohit Juneja & Divakar Rajamani Slide 11 Center for Intelligent Supply NetworksC4ISN
CO
LLAB
OR
ATIO
NCE Industry Key Planning Processes
DEM
AND
LOG
ISTI
CSAL
LOC
ATIO
N
SupplierCollaboration
FactoryPlanning
CPFR
DemandPlanning
TransportationPlanning
AllocationPlanning
DistributionPlanning
DemandPlanning
TransportationPlanning
ReplenishmentPlanningSU
PPLY
FactoryCollaboration
DemandPlanning
TransportationPlanning
MasterPlanning Factory
Planning
2003 © Mohit Juneja & Divakar Rajamani Slide 12 Center for Intelligent Supply NetworksC4ISN
SupplierCollaboration
FactoryCollaboration CPFR
CO
LLAB
OR
ATIO
NCE Industry Key Planning Roles
DemandPlanning
DemandPlanning
DemandPlanningDE
MAN
D
TransportationPlanning
TransportationPlanning
TransportationPlanningLO
GIS
TICS
AllocationPlanning
ALLO
CAT
ION
FactoryPlanning
MasterPlanning
DistributionPlanning
ReplenishmentPlanningSU
PPLY Factory
Planning
MerchandisePlanner
Buyer
LogisticsPlanner
Merchandise &DemandPlanners
DemandPlanner
Procurement Planner
Procurement &Demand, MasterPlanners
Buyer & FactoryPlanners
Master, FactoryPlanner & Buyer
FactoryPlanner
DemandPlanner
DemandPlanner
LogisticsPlanner
LogisticsPlanner
2003 © Mohit Juneja & Divakar Rajamani
Planning Processes in OEMs and Sales Companies
Demand, Supply and Allocation Planning
2003 © Mohit Juneja & Divakar Rajamani Slide 14 Center for Intelligent Supply NetworksC4ISN
Demand and Supply Balance
Demand Planning
Supply Planning
Allocation Planning
Information aboutIndustry growthMarket sharesRegional salesInventory levels PromotionsNew product plans
Consensus withSalesFinanceFactoryMarketing
Unconstrained Demand Plan
Constrained Demand PlanSupply Plan
Constrained Demand PlanSupply PlanAllocation Plan
Allocation Rules byFamilyRegionChannel
2003 © Mohit Juneja & Divakar Rajamani
Demand Planning
Definition, Process and Organizations
2003 © Mohit Juneja & Divakar Rajamani Slide 16 Center for Intelligent Supply NetworksC4ISN
Demand Planning
DefinitionThe Demand Planning process helps predict and influence future sales by customer
BenefitsDecrease inventory obsolescence and mark downsIncrease customer service and fill rates
Sales companies forecast based on shipments and historical sales, market information as well as planned promotions. They forecast across retailers in a market.
OEM’s forecast across sales companies based on market analysis, business plan as well as historical shipments to sales companies.
2003 © Mohit Juneja & Divakar Rajamani Slide 17 Center for Intelligent Supply NetworksC4ISN
Demand Planning Process
Basic Data Structure for DPBasic Forecast Types Typical Forecast Generation Process Forecasting Techniques
2003 © Mohit Juneja & Divakar Rajamani Slide 18 Center for Intelligent Supply NetworksC4ISN
Basic Data Structure for DP
Organization HierarchyProduct HierarchyTime
2003 © Mohit Juneja & Divakar Rajamani Slide 19 Center for Intelligent Supply NetworksC4ISN
Basic Forecast Types
Revenue Forecasting Unit Forecasting
Key ParametersPlanning Horizon : 9 – 24 monthsPlanning Frequency : Weekly/MonthlyPlanning Buckets : Weeks > Months
2003 © Mohit Juneja & Divakar Rajamani Slide 20 Center for Intelligent Supply NetworksC4ISN
Typical Forecast Generation Process
Top Down (Strategic)$, Executive, Annual Statistical forecast works hereForecast based on Market Share for Business plan
Bottom Up (Operational)SKU, sales rep, customer, Weekly or MonthlyConsensus forecast works here
Middle Out$, Manager, Weekly or Monthly
Consensus (statistics vs sales rep) / Collaboration (sales rep vs customer)
SKU, Sales rep, customer, Weekly or Monthly
2003 © Mohit Juneja & Divakar Rajamani Slide 21 Center for Intelligent Supply NetworksC4ISN
Typical Forecast Generation ProcessSy
stem
Syst
emSa
les
Sale
sM
arke
ting
Mar
ketin
gPl
anne
rPl
anne
rC
usto
mer
Cus
tom
er
1: Baseline Statistical Forecast
(M, W)
2a: Bottom-UpForecast Entry (D)
2b: Bottom-UpForecast Entry (D)
2c: EDI Input (D) 2d: Demand Collaboration (D)
3: Consensus Forecasting
& Set Top Down Business Plan Target
(M)4a: Event Planning
(E)
4b: Event Planning (E)
5: Forecast Netting (D)
6: Aggregation &Comparison to Top
DownTargets (W)
Unconstrained Demand
2003 © Mohit Juneja & Divakar Rajamani Slide 22 Center for Intelligent Supply NetworksC4ISN
Forecasting Techniques
Statistical Techniques500 +Exponential SmoothingMoving Average…..
2003 © Mohit Juneja & Divakar Rajamani Slide 23 Center for Intelligent Supply NetworksC4ISN
Organization involved in Demand Planning
Sales CompaniesSalesMarketingDemand Planning Group
OEMsDemand Planning Group
Demand Planning
Marketing
Sales
Rule Based
StatisticalAttach Rate
Bottom-Up
Middle-Out
Top-Down
UnitRevenue
2003 © Mohit Juneja & Divakar Rajamani
Supply Planning Process
Definition, Process and Organizations
2003 © Mohit Juneja & Divakar Rajamani Slide 25 Center for Intelligent Supply NetworksC4ISN
Supply PlanningDefinition
The supply planning process optimizes the use of both capacity and material in order to maximize satisfying anticipated demand
BenefitsReduce cost of inventory, expeditingGlobal coordination – sharing information across supply chain entities
Sales companies perform a distribution plancreates the material purchasecreates the inventory deployment across warehouses
OEMs create a capacity and material feasible master plan across factories and make factory sourcing decisions
OEM/Component supplier - Factoryeach factory creates a material and capacity feasible productionschedule and detailed material procurement plan based on its vendor allocation and preference rules
2003 © Mohit Juneja & Divakar Rajamani Slide 26 Center for Intelligent Supply NetworksC4ISN
Supply Planning ProcessSupply Planning Process
Sales Companies-Distribution planRequirements plan
Inventory balancing across DC’sMaintain target safety stocksGenerate desired procurement requirement
Inventory deployment planGenerate warehouse allocation
OEM-Master planRequirements plan
Factory sourcingDirect procurement
Inventory deployment planGenerate sales company allocation
Factory planGenerate capacity schedulesGenerate detailed procurement plansGenerate commit against master plan requirement
2003 © Mohit Juneja & Divakar Rajamani Slide 27 Center for Intelligent Supply NetworksC4ISN
Supply Planning ProcessIn
vent
ory
Inve
ntor
yFa
ctor
yFa
ctor
ySy
stem
Syst
em 1: Generate Purchase Plan,
constrained, unconstrained
demand
2: Adjust Purchase and
Sales
3: Updated Purchase Plan
4: Factory gets Purchase Plan
5: Factory generates a
commit
6: Updated with Factory Commit
7: Netting Forecast and
Allocation
8: Generate & Update
Warehouse Allocation
9: Adjust Warehouse Allocation
10: Sends Adjustments
and Destinations
11: Factory receives
adjustments and
destinations
Constrained Demand3a: Generate
Factory Allocation
2003 © Mohit Juneja & Divakar Rajamani Slide 28 Center for Intelligent Supply NetworksC4ISN
Organizations
OEMProcurement
Purchase Plan (typically alternate suppliers and agreements in place for key components)
Recommended PurchasesExceptions
PlanningMaster Plan
Meet demand at earliest given constraints
2003 © Mohit Juneja & Divakar Rajamani
Allocation Planning
Definition, Process
2003 © Mohit Juneja & Divakar Rajamani Slide 30 Center for Intelligent Supply NetworksC4ISN
Allocation PlanningDefinition
Allocation planning process refers to disaggregating expected supply / commits to the customer against anticipated demand. The order promising function is an extension of allocation planning where a sales order is promised against this allocation.
BenefitsIncreased customer service and retentionIncreased profitsIncreased order promising accuracy – hitting promise dates in execution
Sales companiescreate allocation plans from warehouse / Sales org to different retailers / groups of retailersPromise sales orders against allocated supply
OEMs create allocation plans for allocation of finished goods between various sales companies – this is usually done as a part of the master plan
2003 © Mohit Juneja & Divakar Rajamani Slide 31 Center for Intelligent Supply NetworksC4ISN
Allocation Planning Process
Allocation planningData structure for allocation planningRules – FCFS, order priority, customer priority
Order PromisingProvide order shipment date to customersRules – ship complete, ASAP, alternates
2003 © Mohit Juneja & Divakar Rajamani Slide 32 Center for Intelligent Supply NetworksC4ISN
Allocation Planning ProcessD
eman
dD
eman
dSy
stem
Syst
em 5: Check Sales orders against
Allocations
4: Review Allocation
3: Generate at Account Level
2: Generate Warehouse Allocation
1: Net Forecast
3a (DP-2d): Demand Collaboration (D)
Cus
tom
erC
usto
mer
6a (DP-6): Aggregation &
Comparison to Top Down Targets (W)
2003 © Mohit Juneja & Divakar Rajamani Slide 33 Center for Intelligent Supply NetworksC4ISN
Summary: Demand and Supply Balancing
Generate Statistical Forecast
Generate Constrained Demand &
Purchase Plan
Allocate to Orders
Receive Sales Orders from Customers
Allocate Inventory to
Accounts
Net Orders and Forecast
Create Unconstraine
d Demand
Generate Collaboration & Consensus
Forecast
Send Purchase Plan
to Factories
Create Factory Plan and Confirm
Generate Warehouse Allocations
Generate Purchase
Orders
Receive Inventory at Warehouse
DemandLoop
SupplyLoop