1 © The Delos Partnership 2005
Procurement MasterclassProcurement Masterclass
Prerequisites
2 © The Delos Partnership 2005
PrerequisitesPrerequisites
Suppliers want
• Long Term Visibility if they are strategic suppliers
• Stability when commitments are made
• Realistic performance Measures
• Accurate data as a foundation
3 © The Delos Partnership 2005
The Delos ModelThe Delos ModelFor Business Integration For Business Integration
InnovationInnovation
VisionVision
StrategyStrategy
PrioritisationPrioritisation
DemandDemand
SupportSupport
SupplySupply
4 © The Delos Partnership 2005
Objectives for Integrated Objectives for Integrated Enterprise LeadershipEnterprise Leadership
• One set of numbers at all times• Integrated Plans• Realistic Plans• Teamwork• Communication of goals and objectives• Decisions made in timely fashion• Consistent performance measures• Delivery of the Strategy
5 © The Delos Partnership 2005
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
6 © The Delos Partnership 2005
Supporting ProcessesSupporting Processes
There are three supporting processes– Innovation
• New products• New processes
– Customer Relationship management• Sales linkage• Marketing linkage
– Supplier Relationship management
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Management of InnovationManagement of Innovation
Needs Management across all the projects
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Forecasting Needs a Forecasting Needs a Simple ProcessSimple Process
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
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Master SchedulerMaster Scheduler
Strategy
Master Scheduler
Sales Forecasts
CustomerOrders
ManufacturingPlan
PurchasingPlan
PurchasingPlan
MRPSystem
Balanced PlanBalanced Plan
10 © The Delos Partnership 2005
Basic EquationsBasic Equations
Item DataBOM’s
And Routes
StockAnd
Capacity
Master Schedule
Forecasts Orders
Suppliers Factories
What do theyWant ?
What haveWe got ?
Whatdoes it need ?
What do we need to do ?
11 © The Delos Partnership 2005
Vertical Functional Vertical Functional OrganisationOrganisation
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
12 © The Delos Partnership 2005
Vertical Functional Vertical Functional OrganisationOrganisation
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
Demand Process
Innovation Process
Supply Process
13 © The Delos Partnership 2005
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
14 © The Delos Partnership 2005
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
15 © The Delos Partnership 2005
ResultsResults
Suppliers want•Long Term Visibility if they are strategic suppliers•Stability when commitments are made•Realistic performance Measures•Accurate data as a foundation
Integration provides:•IEP plus Forecast
•Master Schedule provides stability
•The core measures are not biassed•Data accuracy essential
16 © The Delos Partnership 2005
Successful negotiation is Successful negotiation is based on partnershipbased on partnership
Once the partnership is established for critical and strategic suppliers, we
should look to improve their processes thereby leveraging the total value of
their business
Once the partnership is established for critical and strategic suppliers, we
should look to improve their processes thereby leveraging the total value of
their business
17 © The Delos Partnership 2005
Change Minds not just Change Minds not just systemssystems
Successful change
Successful change
CULTURECULTURE
TEAMWORKSHARED VISION
COMMUNICATIONWAYS OF WORKING
ACCURACY AND DISCIPLINEPOLICIES AND PROCEDURE
HARDWARESOFTWARE
ACCURATE DATAVALID SCHEDULES
SYSTEMSYSTEM
18 © The Delos Partnership 2005
Real challengeReal challenge
• Acceptance of common sense
• Avoid initiativitis
• Make the routine really routine
• Free up time to think and behave strategically
19 © The Delos Partnership 2005
Delos Change JourneyDelos Change Journey
MobiliseMobilise DesignDesign CommunicateCommunicate ReviewReviewUnderstandUnderstand
AASSSSEESSSS
AASSSSEESSSS
EDUCATIONSTRATEGY & DESIGN
DEFINE & MEASURE BENEFITS
ORGANISATIONSYSTEMS