1 © The Delos Partnership 2003 Integrated Enterprise Planning Joining up all the pieces

2 © The Delos Partnership 2003 Integrated Enterprise Planning Long term planning –3 to 10 years + Medium Term Planning –3 months to 3 years Short-term Planning –0 to 3 months

3 © The Delos Partnership 2003 Disintegrated Business Planning Long term plan Short term Plan Medium Term Plan

4 © The Delos Partnership 2003 Integrated Enterprise Planning Why a monthly process ? –Nothing is constant except for change –Budget gives only 1/12 opportunities for review of performance –Budget takes 6 months to prepare World changes in between Lack of clarity on changes Need in today’s environment for quick update of where we are

5 © The Delos Partnership 2003 Integrated Enterprise Planning It is not –a meeting : it is a process –Information gathering –a meeting for the Demand Manager and the Planning Manager –Just Supply/Demand Balance –What gets done in corridors today It is –A formal process for prioritising issues and deciding what gets sold,made, bought and developed

6 © The Delos Partnership 2003 Integrated Enterprise Planning Objectives –Get one set of numbers –Resolve imbalances in Demand and Supply of all resources Manufacturing Supply Design Cash –Establish Teamwork –Implement Strategic direction

7 © The Delos Partnership 2003 Delos Business Model Strategy Prioritisation Changes Vision DemandSupply Support

8 © The Delos Partnership 2003 Customer Relationship Strategy 1.First Decide if you are Make to Stock or Make To Order 2.Then work out the production plans Inventory Production Make To Stock Sales/ Shipments Order Book Sales Orders Production/ Shipments Make To Order

9 © The Delos Partnership 2003 Customer Relationship Strategy Design Purchase Intermediate Manufacture Sub-assemble Finish Distribute Where Do you meet The Customer ? StockTo Order

10 © The Delos Partnership 2003 Make to Stock Production = Demand Plan + (Inventory Target- Current Inventory) = ) PRODUCTION STOCK

11 © The Delos Partnership 2003 Integrated Enterprise Planning -3-2 Demand Plan 120 Actual Demand Difference 512 Cum Diff 416 Months Last Demand Plan 120 New Demand Plan Difference Cum Diff Months Q4Q Supply Plan 125 Actual Supply Difference Cum Diff Last Supply Plan New Supply Plan Difference Cum Diff Q4Q Stock Plan Actual Stock Difference Last Stock Plan8691 New Stock Plan Difference Q4Q1 91 Make – To- Stock

12 © The Delos Partnership 2003 Make to Order Production = Demand Plan + (Current Backlog - Backlog Target) = ) PRODUCTION BACKLOG

13 © The Delos Partnership 2003 Integrated Enterprise Planning -3-2 Demand Plan 70 Actual Demand Difference 1510 Cum Diff 616 Months Last Demand Plan 70 New Demand Plan Difference Cum Diff Months Q4Q Supply Plan 75 Actual Supply Difference Cum Diff Last Supply Plan New Supply Plan Difference Cum Diff Q4Q Order Book Plan Actual Orders Difference Last Plan4641 New Plan Difference Q4Q1 41 Make – To- Order

14 © The Delos Partnership 2003 Integrated Enterprise Planning Annual Operating Plan Monthly Review Master Production Schedule Supplier Schedule Factory Schedule Volume [Family] Value 42 months horizon Volume [Family] Value 30 months horizon Volume SKU Value 18 months horizon Volume [Part number] Value 18 months horizon

15 © The Delos Partnership 2003 Family Summary Major Changes New Product included in Forecast Tender for Russia included Major Assumptions Competition will reduce price by 5 % We Win Russian Tender Major Threats Decisions Required Investment of $ 0.5 m in Additional capacity for New Product

16 © The Delos Partnership 2003 Rough Cut Capacity Planning Objective –Translate SOP Family Volumes into Capacity Requirement –Test validity of plan against demonstrated capacity How –Use Planning profiles –Use Critical Resources –Use Demonstrated Capacity Result –Possible problem areas

17 © The Delos Partnership 2003 Rough Cut Capacity Planning Required Capacity Demonstrated Capacity Family Volumes x Rate per hour Actual Production Per month Critical Resources

18 © The Delos Partnership 2003 Rough Cut Profile Key Resources UnitsFamilies ABCDEF Supplier A Lts Warehouse Pallets Quality Assurance Hrs Line ABC Hrs Labeller Hrs4725 Filling m/c Hrs37925 Hours per 000 units

19 © The Delos Partnership 2003 RCCP Planning Result Month 5 Key Resources Required Production VolumesCapacity A 220 B 200 C 35 D 40 E 150 F 15 ReqDemMax Supplier A Warehouse Quality Assurance Line ABC Labeller Filling m/c

20 © The Delos Partnership 2003 RCCP Result – Month 5

21 © The Delos Partnership 2003 RCCP Result Capacity Requirement

22 © The Delos Partnership 2003 SOP Process To gather information SOP needs –Formal process for inclusion of data –Time for analysis of information –Discussions to get to conclusions –Timely acquisition of information

23 © The Delos Partnership 2003 Integrated Enterprise Planning ACTIONACTION Week 1Week 2Week 3Week 4 Innovation Review Innovation Review Customer Demand Review Customer Demand Review Supply Plan Review Supply Plan Review Priority Review Priority Review STAGE 1 STAGE 2 Senior Team Review Senior Team Review STAGE 5 STAGE 6 STAGE 4 STAGE 3

24 © The Delos Partnership 2003 Integrated Enterprise Planning Brings together all plans –Financial –Sales –Marketing –Product Development –Maintenance Family level volume [Marketing and Production] Acts as high level reconciliation Makes decisions

25 © The Delos Partnership 2003 Integrated Enterprise Planning Summary –One set of numbers –Teamwork –Manages the constant change –Rolling Business Plan –Replaces Budget –Sound basis for decision making