SherTrack Demand-Driven Predictive Manufacturing SherTrack Demand-Driven Predictive Manufacturing NXT GEN S&OP High Performance Scenario Planning Rail Fleet Optimization Understanding, Sensing & Responding to Uncertainty & Risk High Efficiency Rail Fleets Demand-driven Predictive Mfg Lean-Pull Execution DDPM NEXT GEN S&OP: Compelling new Approaches Producing Overwhelming Value Gregory L. Schlegel CPIM, CSP, Jonah VP Business Development Professor ,Supply Chain Management, Lehigh University [email protected][email protected]March 19, 2010
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SherTrackDemand-Driven Predictive Manufacturing
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
NEXT GEN S&OP:Compelling new Approaches Producing Overwhelming Value
Gregory L. Schlegel CPIM, CSP, JonahVP Business Development
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
NEXT GEN S&OP Agenda…..
Intro to SherTrackNEXT GEN S&OP CapabilitiesThe WHAT and WHY of NEXT GEN S&OPSome HOW TO’s Associated with NEXT GEN S&OPWHAT’s in it for you?Next Steps
Lehigh University GBUS492 MBA Class 2010
2
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
SherTrack Overview
Venture backed company founded 2002 with the first few years spent on technology developmentFocused on early adopters, innovators and exemplarsProviding innovative, demand-driven probabilistic solutions to complex operations including S&OP/Supply Chain consultingSolutions are SaaS, Software-as-a-Service…lease vs buyMinimum amount of internal IT support with rapid, remote-driven, virtual installationNo upfront license fees…subscription “Pay-as-you-go” approachProfitable for the last two years in light of the environmentGrowing year over year
3. S&OP Scenario Planning leveraging Predictive AnalyticsScenario Planning basics within an S&OP EnvironmentPredictive Analytics using Probabilistic MethodologiesMinimizing Uncertainty, Complexity & Risk through Prioritizing Probabilities of occurrence and development of Risk Response Plans
Lehigh University GBUS492 MBA Class 2010
6
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
The S&OP Process Today:
Operations &R&D
Sales &Marketing
GOAL: Factory optimization to improve costsDesire is to minimize demand uncertaintyFORECAST: Manufacturing plan
GOAL: Feasible plan, Bottoms-upDesires to minimize risk & disruptionFORECAST: Demand plan
Supply ChainFinanceGOAL: Make BudgetDesires control & wants predictability of operationsFORECAST: Budget
S&OP
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
FOUR STAGES of S&OP
WHAT are the definitions?WHERE are you positioned?HOW long does it take to move forward?WHAT are the benefits?WHAT’s NEXT, after Stage 4?
Aberdeen Group
S&OPBest Practice Steps
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPMThe S&OP Lament!
“Less than 1% of companies use customer data as the basis for supply chain planning and less than 2% of all companies have segmented customers based on profitability”…….AMR
“Over 60% of all companies take more than two weeks to sense changes in actual demand and take still another two weeks or more to respond”……..AMR
9
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
“AMR Research reports companies that useclassic S&OP approach to demand/supply can see”…..
A 5-10% improvement in forecast accuracyA 1-5% improvement in supply chain costsAnd can expect to work on this S&OP process anywhere
from 9-12 months before seeing initial improvements
Necessary but not Sufficient!
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
NEXT GEN S&OP: Emerging Themes…
Companies NEED to understand the business importance of their different products & customers and ALIGN them properlyCompanies SHOULD Segment/or Tier their customers and develop efficient and effective supply chains based on Total-Cost-to-Serve modelsCompanies NEED to incorporate Risk Management information, methods and tactics into their S&OP processesCompanies MOVING to S&OP Scenario Planning SHOULD support it by leveraging Probabilistic Predictive Analytics
SherTrackDemand-Driven Predictive Manufacturing
NXT GENS&OP
High Performance Scenario Planning
Rail Fleet Optimization
Understanding, Sensing & Responding to Uncertainty & Risk
High Efficiency Rail Fleets
Demand-drivenPredictive Mfg
Lean-PullExecution
DDPM
NEXT GEN S&OP “Building Block”…..Risk Mitigation Methods
Scenario Planning basics within an S&OP EnvironmentPredictive Analytics using Probabilistic MethodologiesMinimizing Uncertainty, Complexity & Risk through Prioritizing Probabilities of occurrence and development of Risk Response Plans