Supply Chain Value Assessments Ensuring Success when Implementing APS

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Supply Chain Value Assessments Ensuring
Success when Implementing APS

• TSCs - Oracle APSSupply Chain Methodology
• Sandi Briggs
• Senior Principal

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Our History

• TSC Today
• 900 Employees
• 150 Million Revenues
• 500 Customers since 1994
• 100 Oracle Projects
• 11i Since May 2000
• NASDAQ TSCC

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Some TSC Oracle Customers...
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Agenda

• Objectives
• Assessment Overview
• The Assessment Process
• Questionnaires
• Interview Process
• Todays Reality
• Vision Workshop
• Vision Path to Success
• Building the Business Case
• Presentation to Sponsors
• Case Studies
• Assessment 1 - Manufacturer of Industrial
  Products
• Assessment 2 - Major Drug Store Chain
• Assessment 3 - Semiconductor Component
  Manufacturer

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Assessments Defined

• assessment séssmnt (plural
  assessments) noun evaluation a judgment
  about something based on an understanding
  of the situation, a fair assessment of the
  project

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Assessment Objectives

• Determine strengths and weaknesses of current
  environment
• Compare current procedures against best
  practices
• Provide comparison against industry processes
• Provide management a tool to determine and
  vocalize vision strategies
• Define strategy for changing the organization
  and align them to the system.
• Determine strategy on how to take company from
  current practices to vision
• Create compartmentalized improvement programs
• Provide ROI for Implementation or other
  considerations

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An Assessment Should be.

• Based on a proven methodology
• Performed by someone that keeps up with current
  processes and concepts
• Objective

An Assessment Should NOT be.

• Performed by someone within the organization
  (objectivity)
• A Long term project in itself
• Used to Solve problems - only identify and
  prioritize them

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The Steps

• Questionnaires
• Interviews
• As - Is Development
• Vision Development
• Opportunity Analysis
• Business Case Development
• Presentation of Findings

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The Questionnaire

• Jump starts the interview process
• Provides initial look into the supply
  chain
• Gives baseline information to begin As
  Is process development
• Covers the entire Supply Chain

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The Questionnaire

• Sample Questions

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The Interview Process

• Includes all areas of the Supply Chain
• Uses the Questionnaire as a baseline
• Documents comments, issues, culture
• Informal process for best information gathering

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Todays Reality

• Development of the As-Is Process Flow
• High Level look at the supply chain
• Determination of Issues (Opportunities for
  Improvement)
• Typically identifies breakdown of information
  flow, bureaucratic icebergs, systems
  incapabilitys

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Vision Workshops

• Business Process Based
• Two hour meeting - one day workshop
• Validates As-Is flows
• Presents Supply Chain concepts
• Presents Best Practices
• Previews a potential To-Be based on vision
  and best practices
• A Consensus Best Practice flow is developed

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Vision Workshop Components

• Performance Metrics

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Vision Workshop Components

• Vision Circles

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Vision Workshop Components

• To-Be Process Flow

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Opportunity Assessment

• Review of Gaps, Issues, Culture for Improvement
  Opportunities
• Determine Best Approach - typically multiple
  options developed for choice
• Process Improvements
• Software Selection and Implementation
• Upgrade to Existing Software
• Create small Increments for quicker results
• Improvement Metrics (measurable)
• Savings in Dollars and Time Line
• Project Timeline
• Basis for Return on Investment
• Determination of Next Steps

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The Business Case

• Cost Savings

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The Business Case

• Risk Assessment

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Presentation to Sponsors

• Allows project team (internal and consulting)
  to provide overview to C-level management
• Obtains agreement of findings of all
  organizations
• Obtains Financial and Organization decisions
  for next steps
• Presentation is PowerPoint and/or Word Document

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Assessment Timeframes
1-2 days
2-4 Weeks
4-6 Weeks
Objectives Questionnaires Interviews As - Is
Development Vision Development Opportunity
Analysis Business Case Presentation
Scoping Pre-filled/discuss Individual Level
1 Proposed Broader Scope High Level ROI Formal
Presentation
Process Improvement Full Interviews Individual
(S) Level 2 Full Workshop More options Complete
ROI Formal Presentationw/ document
Proposal Pre-filled Grouped High
Level Strategy Limited Scope No ROI Proposal
Document
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Supply Chain Value Assessments Ensuring
Success when Implementing APS

• Case Studies

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Two Real Life Supply Chain Value Assessments

• Assessment 1 - Manufacturer of Industrial
  Products
• Assessment 2 - Major Drug Store Chain
• Assessment 3 - Semiconductor Component
  Manufacturer

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Assessment 1 -Manufacturer of Industrial Products

• Company Profile
• Manufacturer of heat exchange products
• Privately owned (approximately 60 million in
  sales)
• Located in the southwest
• Two ten hour shifts, 700 end item orders per
  year
• Two end product plants and one component feeder
  plant
• Standard configured products
• Configured products

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Assessment 1 -Manufacturer of Industrial Products

• Objectives of Assessment
• Review high level processes to identify gaps to
  best business practices
• Determine if gaps are business or technology
  related
• Document business goals to create a business
  roadmap
• Identify and prioritize areas of business that
  need attention
• Identify integration points to clarify what
  information is required, who needs it and whether
  it is real time

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Assessment 1 -Manufacturer of Industrial Products

• Deliverables from Assessment
• Overview of company business goals for one to
  five years
• Identify performance metrics
• Clarify how often information is needed and
  standard for acceptable accuracy
• Identify areas where gaps exist compared to
  best practices
• Recommendations for managing the business
• Long range improvements
• Interim workaround solutions
• Budgetary relationship between cost and return
  on investment (ROI)

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Assessment 1 -Manufacturer of Industrial Products

• Areas to be covered in Assessment
• Multi-Org (multiple plants and warehouses)
• Inventory
• Items
• Transactions
• Bill of Material and Route
• Order Entry (end item/service parts)
• Configurator
• Supply Chain Planning

• Work In Process
• Procurement
• Quality
• Costing
• Financials (Genera Ledger, A/R, A/P,
  Fixed Assets)
• MIS (Data Base, Network, Hardware,
  Software)
• Conversions
• Interfaces

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Assessment 1 -Manufacturer of Industrial Products

• Duration for Assessment
• Two weeks for study
• One week for report and presentation to
  sponsors
• Resources for Assessment
• Project Leader/Manufacturing Consultant
• Order Entry/Configurator Consultant
• Financial Consultant
• Manufacturing Consultant

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Assessment 1 -Manufacturer of Industrial Products

• Interview Matrix

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Assessment 1 -Manufacturer of Industrial Products

• Interview Questionnaire

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Assessment 1 -Manufacturer of Industrial Products

• Interview Example - Planning

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Assessment 1 -Manufacturer of Industrial Products

• Interview Example - Planning (cont..)

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Assessment 1 -Manufacturer of Industrial Products

• As-Is Flow
• Supply Chain Planning
• No multi-org integration
• Customized configuration created customer
  quote, customer order and WIP order
• No inventory planning
• Purchase orders placed manually
• No capacity planning
• Manual schedule and reschedule
• No integration of supply chain planning by
  function

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Assessment 1 -Manufacturer of Industrial Products

• Vision Circle

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Assessment 1 -Manufacturer of Industrial Products

• Recommended Vision Process

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Assessment 1 -Manufacturer of Industrial Products

• Benefits
• Advanced Supply Chain Planning/Constrained
  Based Optimization
• Purchase orders tied to project (job)
• WIP orders tied to project (job)
• Inventory tied to project (job)
• Constraint based optimization balances plant
  resources and material to projects
• Work In Process Orders
• Labor tied to project (job)
• Schedules and reschedules projects (jobs)
  automatically
• Product Configurator
• Selection process where minimal sales/engineer
  knowledge required
• Elimination of hard coded Fortran Configurator
• New options can be added easily
• Ability to change business rules
• Interface to AutoCad for drawings
• Unlimited attachments for documentation

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Assessment 1 -Manufacturer of Industrial Products

• Benefits
• Purchase Orders
• Automated process of sourcing supplier
• Rules for auto reschedule of purchase orders
  tied to projects (jobs)
• Savings from tightened central purchases for
  lower prices and discounts
• Inventory
• Inventory allocated to project (job)
• Project locators used to track project (job)
  material
• Order Entry
• Customer quote, configuration, customer order,
  project, job, purchase orders all tied
  together
• Accurate history to recall customer order
  configuration
• Project Costing
• Tightened project cost tracking to highlight
  gross profit erosion
• Simplifies project billing to customer

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Assessment 2 - Major Drug Store Chain

• Company Profile
• Consumer sales in merchandise and pharmacy
• Publicly owned (approximately 5 billion in
  sales)
• Located West of the Mississippi
• Eight distribution centers and 300 - 500 stores
• Very strong decentralized structure

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Assessment 2 - Major Drug Store Chain

• Approach
• Objectives same as assessment 1
• Deliverables same as assessment 1
• Areas to be covered
• Supply chain management
• Financial management
• Human resources/payroll
• Retail systems
• Pharmacy systems
• Information systems

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Assessment 2 - Major Drug Store Chain

• Duration for Assessment
• Eight weeks for study
• One week for report and presentation to
  sponsors
• Resources for Assessment
• Project Leader
• Two Supply Chain Consultants
• Retail Consultant
• Pharmacy Consultant
• Financial Consultant
• Human Resources/Payroll Consultant
• Information Systems Consultant

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Assessment 2 - Major Drug Store Chain

• Interview Questionnaire

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Assessment 2 - Major Drug Store Chain

• Interview Example - Planning

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Assessment 2 - Major Drug Store Chain

• Interview Example - Planning

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Assessment 2 - Major Drug Store Chain

• As- Is Flow

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Assessment 2 - Major Drug Store Chain

• Recommended Vision Process - Store Merchandise

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Assessment 2 - Major Drug Store Chain

• Benefits

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Assessment 3 - Semiconductor Component
Manufacturer

• Company Profile
• Semiconductor Components (Surface-mount
  Technology, Wafer Production, diodes)
• Publicly owned (approximately 118 million in
  sales)
• Corporate on West Coast with Manufacturing
  plants in Taiwan and China
• Industries supported include communications,
  computer, industrial, consumer electronics,
  and automotive markets
• Sales and distribution are direct and through
  distribution network

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Assessment 3 - Semiconductor Component
Manufacturer

• Approach
• Objectives
• Current failed Implementation
• Company wanted to continue and finish
  Implementation
• Deliverables
• System Status / Usability
• Implementation Proposal
• Areas to be covered
• Supply chain management
• Financials
• MES Interfaces

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Assessment 3 - Semiconductor Component
Manufacturer

• Duration for Assessment
• 1 1/2 days for study
• One week for proposal development
• Resources for Assessment
• Supply Chain Consultant
• Financial Consultant

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Assessment 3 - Semiconductor Component
Manufacturer

• Proposal Highlights
• System Status - 50 production ready
• New release of software - stabilize environment
• Base Setup - validation and reconfigure
• Data Conversion
• Training / Knowledge Transfer
• Proposal Development
• Additional qualification questions
• Approach for implementation
• Asian localizations
• Project qualifications
• Project staffing - resumes

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Summary

• Focus on Strengths and Weaknesses
• Give Customer Multiple Options
• Use Best Practice Business Processes as a Guide
• Results may not be Software Driven
• Keep Process Improvements Small, Measurable,
  and Achievable for immediate results
• Dont begin with a pre-determined solution

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Thank You!

• Sandi Briggs
• TSC
• Sandra_Briggs_at_techsol.com
• 972-726-5000