NDIA Adapting Collaborative Commercial Techniquesndiastorage.blob.core.usgovcloudapi.net/ndia/2003/logistics/... · SCM Supply Business Planning Business Analytics Network Modeling

March 2003

NDIAAdapting CollaborativeCommercial Techniques

Practices, Processes & TechnologyFor The

Aerospace and Defense Supply Chain

Jeff HolmesSVP & President

Government, Aerospace & Defense

History Of CollaborativePlanning• Began in 1996

– Wal-Mart, Warner Lambert, Manugistics, SAP– Focus on improving forecasting for sales volumes– Began the evolution of CPFR by adding replenishment

• How it progressed– Began a rollout to the CPG/Grocery retail space– Issues focused around “in-stock” and sales volume– Adopted by the VIICS council and ECR as a standard– Followed by Rosetta-Net for high tech sector

• CPFR goes mainstream in 1998– Multiple industry vertical adoption– Crosses the manufacturer-retailer model to also focus on suppliers, dealers,

customers…regardless of vertical industry

The Collaborate OpportunityInternal and External to the Enterprise

Collaboration

Suppliers BackOffice

FrontOffice

Customer &Channels

ManufacturingFinance

Engineering

SalesSupport/Service

Marketing

Supply Chain Front/Back OfficeIntegration

Demand Chain

Move/Add Value

Source: The Yankee Group

Collaboration Must Focus OnBusiness Processes

Supply & MaterialsPlanning

&Supplier

Management

Business MasterPlanning

&EnterpriseOperations

CustomerExpectation

&Demand

Management

Visibility and Monitoring

COLLABORATION

COLLABORATION

Strategic Planning

Distribution & Transportation Management

Integration Tool Kit

Transactions & Information

Deployment Architecture

Across Multi-DimensionalPlanning and Operating Horizons

ST

RA

TE

GIC

TA

CT

ICA

LE

XE

CU

TIO

N

Supply Operations Logistics Demand

AN

ALY

TIC

AL

TRANSACTIONAL

Purchasing Manufacturing Distribution Marketing/Sales

RFID MES RFID ConsumptionWMS Cust SvcEDI

BusinessExecution

ManagementLogistics Execution Management

ElectronicHUB

DynamicProration

CatalogAdmin

ATP/CTP

BusinessOperations

Management Global Logistics Management

SupplierManagement

Budget Optimization

SCMSupply

BusinessPlanning

Business Analytics

NetworkModeling

SupplyClassification MRMDemand

Classification

UUNet

Collaboration

SCMDemand

ManufacturingModeling

TransportationRate

Management

ProcurementModeling

Delivering Continuous Improvement Through Business Planning, Management, Real Time Monitoring and Adaptive Planning A P

D LA AP NT NI NV NE G

StatisticalCorrelation

AutoTuning

CarrierWeighting

SubstitutionManagement

NetworkRe-

configuration

Transaction Data (ERP), Maintenance Historical Data Cost Accounting Data

Copyright © 2002, Manugistics, Inc. All rights reserved.

Examples OfCollaborative Planning

Commercial SectorAerospace & Department of Defense

Internet Dealer Collaboration• Reduced vehicle inventory at the ports

by over 90%• Reduced operating costs associated

with transporting vehicles to dealersby over $2 million

• Implemented a system that reducesorder-to-delivery lead time by ~75%,while also allowing for vehiclecustomization up to 15 days prior toproduction

• Reduced age of vehicles from 164 to37 days old

• Rolled out the system to dealersacross the nation in less than 6months

Canadian Tire Story-Collaborative Commerce

• Implement a hosted web-enabled trading network in three weeks• Improved partner relationship between retailer and suppliers through

real-time collaboration process and shared information• 20% increased in-stock positions with 15% reduced inventories

CT Hosted Collaborative Commerce

InternetFirewall Firewall

Multiple Trading Partners

WebServer

Web Browser

Web BrowserCollaboration

Server

One ServerOne Server

1200 buyers1200 buyers

750750 Suppliers Suppliers

PlanningSystem

EDICommunication

Website

87 Site87 SiteRequirementsRequirements

EDI 830

830

870EDI 870

ManugisticsNetWORKS/Material

Case study: Compaq

• 100% Increase In Responsiveness,Improved On-Time Delivery

• Up to 50% Reductions In RawMaterial Inventory

• Raw Material Inventory Reduced by$30M in 6 Months

• 50% Reduction in Forecast ChangeResponse Time

• Improved Product End-of-LifePlanning: Avoided $12M ObsoleteMaterial Write-Down From A SingleProduct Line Phase-Out

New Model

OEMOEM

3PL3PL

DistDist

OEMOEMCMCM

CarrierCarrier

Current Model

OEM

DistOEM 4

Disti

OEM 2

OEM 3

OEM 1

CMEM&A

Hub

Cisco’s eHub ChangedThe Model

For A&D It Means Enabling ANew Operational Environment

• Access additional capabilities at each operating location to enhanceplanning, scheduling and operational capabilities– Integrate to legacy and MR&O installed solutions– Create a collaborative planning solution for connectivity and joint planning with

suppliers, customers and business partners– Utilize constraint based time-phased planning for operational efficiency

• Connect “Enterprise” level planning to suppliers, depots and customers– Create collaborative planning environment– Utilize constraint based capabilities to increase service level improvements

while optimally managing within budgetary constraints– Utilize collaborative weapon system life cycle management techniques to

improve initial provisioning for retail and wholesale logistics execution– Reduce customer wait time and improve reliability– Use simulation and modeling for “what-if” analysis and situational awareness

planning

Changing A Program SpecificSupply Chain Environment

Repair

Items

Repair

Items

HAZMAT

COMMODITYCOMMODITYSHOPSSHOPS

STORAGESTORAGE

PROCESSPROCESS

ENGINE PRODUCTIONPRODUCTIONLINELINE

TOOL CRIBTOOL CRIB

AVIONICS

LANDINGGEAR Disassembly Assembly

PRODUCTIONPRODUCTIONPLANNINGPLANNING

PLANTPLANTENGINEERINGENGINEERING(FACILITIES)(FACILITIES)

DEPOTDEPOTMANAGEMENTMANAGEMENT

CANOPY

RADOME

LABORATORYLABORATORY

New Ite

ms

New Ite

ms

Commodities to supply system after

rework/repair

ENGINEERING

DepotMaintenance

• Maintenance Planning & Preparation • Asset & Configuration Management• Resource planning& Scheduling• Repair, Replace, Rebuild Management• Maintenance Execution & Completion• Financial Management• Records Management

LineMaintenance

Forward InventoryLocation

Forward InventoryLocation• Enterprise Parts/Material

Management - Predictive Forecasting - Distribution Planning - Allocation - Reverse logistics

• Capacity Planning• Buy vs Repair Analysis• Logistics Management• Supplier Relationship Mgmt• Collaboration

Boeing

Pratt & Whitney

DLA

Lockheed Martin

SAIC

Northrop Grumman

-- O

EM

’s a

nd V

irtu

al P

rim

e V

endo

rs -- Transportation

Visibility andControl

NAVSUP/ICP SMART ERP/APS

SMART TRANS

Into The Inter-Networked EnterpriseOperating Environment

Repair

Items

Repair

Items

HAZMAT

COMMODITYCOMMODITYSHOPSSHOPS

STORAGESTORAGE

PROCESSPROCESS

ENGINE PRODUCTIONPRODUCTIONLINELINE

TOOL CRIBTOOL CRIB

AVIONICS

LANDINGGEAR Disassembly Assembly

PRODUCTIONPRODUCTIONPLANNINGPLANNING

DEPOT

CANOPY

RADOME

LABORATORYLABORATORY

New Ite

ms

New Ite

ms

Maintenance, Repair, Overhaul andRecapitalization

• Collaborative planning & scheduling- Demand Management- Scheduling & Capacity Planning- Reporting and Analysis- Collaborative Planning- Integration Tool Kit- Simulation & Modeling

Operational Maintenance

• Demand Management• Scheduling• Reporting and Analysis• Delivery Visibility

ForwardInventoryLocation

-- O

EM

’s a

nd

Pri

me

Ven

do

rS

up

plie

r C

om

mu

nit

y

Distribution &TransportationManagement

Co

llab

ora

tive

Pla

nn

ing

&S

up

plie

r M

anag

emen

t

EnterpriseManagement

ForwardInventoryLocation

• Multi-site Planning and Scheduling• Constraint Based Planning• Multi-year Planning - Predictive Forecasting - Distribution Planning - Allocation - Reverse Logistics• Surge & Sustainment• Budget Planning

Customer Service

DemandPlanning

Supplier and Inter Agency CollaborationCustomer Segmentation & Collaboration(Expectation Management)

DemandPlan

SupplyPlan

Built on two premises…customer segment and planningvia collaboration

DLA’s BSM ProgramIncludes Customer And Supplier FocusedCollaboration

S

U

P

P

L

I

E

R

S

C

U

S

T

O

M

E

R

S

Aviation

Customer Service

DemandPlanning

Customer Service

DemandPlanning

Customer Service

DemandPlanning

Maritime

Land

Troop Support

MANUGISTICS

SupplyPlanning

SupplierMgt.

SupplyPlanning

SupplierMgt.

SupplyPlanning

SupplierMgt.

MaterialDelivered toCustomer

MaterialPickedUp at Vendor

#12

#12

GTN

ICP

PowerTrack

Carrier (FEDEX,DHL, …)

NTSC

NetWorksProcurement

SMART Shipping

CRIF / FACTS

ATCMD

MaterialDelivered toCustomer

MaterialPickedUp at Vendor

#3#2

Requisition

Updates Order via Web

#5

Customer

DASSC

PBL Vendors

NetWorks ProcurementWeb Based

Ordering Tool

NetWorks Transport

TransportationOptimizer

Global Freight

Management (GFM)Shipping System

Requisition#4

RequisitionMILSTRIP, EDI 940, 850

#4

ORDERS

#6

#7

ShippingSolution

#8

#9

#10

#13 In-transit Status Messages

#14

#1#11

NAVSUP’s STS Shipping SolutionCreates Collaborative Visibility…

March 2003

NDIAAdapting CollaborativeCommercial Techniques

Practices, Processes & TechnologyFor The

Aerospace and Defense Supply Chain

Jeff HolmesSVP & President

Government, Aerospace & Defense