Bob Stahl Gaylord Texan Resort & Convention Center December 11-12, 2008 Gaylord Texan Resort & Convention Center December 11-12, 2008 Rick Hall Director of Operations UPG of Thomas & Betts Rick Hall Director of Operations UPG of Thomas & Betts APICS / iBF Best of the Best S&OP Conference APICS / iBF Best of the Best S&OP Conference Executive S&OP How to Implement Successfully Executive S&OP How to Implement Successfully Bob Stahl R.A. Stahl Company

Bob Stahl The Evolution... Plant Scheduling/Pull MS S&OP / Rough Cut PTF 24 Months Time Most DetailAggregate Only Exac Config...Precise Matl...# People...Capital Equip...Factory Space Volume Mix Detailed Forecasting & Master Scheduling Lost in the woods- Detail Engage Top Management? Added Little Value outside the Planning Time Fence Super MS

Bob Stahl An Imperative... PTF Horizon Detail Suicide Quadrant Aggregate Only Quadrant S&OP

Bob Stahl Four Fundamentals Demand Supply MIX Volume

Bob Stahl The Real Issue... Understanding Executive S&OP is simple. The hard part is... Organizational Behavioral Change Changing the way everyone does their jobs. Keys: - Full cross functional buy-in - Counter- experiential/intuitive - Comfort vs Change - Path of low risk

Bob Stahl Successful Implementation... A - People B - Data C - Software

Bob Stahl Homac objective... To support and sustain growth To improve customer satisfaction To maximize financial return on the growth To broaden the impact of continuous improvement To make the company more attractive for sale

Bob Stahl C - Software... Data warehouse –ERP Operating System, Forecasting Software, etc. (transaction level data) Data Cubes... Excel (or equivalent) –Organizer –Presenter (tables & graphs) More complex software – later/maybe

Bob Stahl Rick Hall on software... Change forecasting from detailed to families Extract data from BPCS; organize in Excel Develop appropriate MIX assumptions Control Tools to build confidence in these assumptions (Excel based) Be willing to put the gator on the table No financial investment for software. This is not a software implementation; it is a knowledge application implementation!

Bob Stahl B - Data... Getting out of Suicide Quadrant –Forecasting in Families Simplifying Data Assumptions –for Rough Cut Resource Planning –for financial conversion (units to $$$) Single process - –tied together –one source for data –one agreed upon output

Bob Stahl Rick Hall on data... Getting MORE with LESS MORE clear picture of the business condition LESS crunching of massive amounts of ultimately useless data MORE understanding of where we want the business to be LESS confusion about where we are and where we are going MORE participation and agreement in how we will get the business there LESS conflict surrounding business initiatives MORE accountability for the results LESS waste of human and financial resources

Bob Stahl Rick Hall -- One Key to success... Simplifying Assumptions

Bob Stahl Validating Assumptions Assumption Sensitivity

Bob Stahl Supply Assumptions...

Bob Stahl Financial Assumptions...

Bob Stahl Graphical Report

Bob Stahl Simplifying Assumptions allow Homac to... Get out of the suicide quadrant Keep noise level MIX issues from clouding VOLUME space picture Maintain confidence in the process because the assumptions are monitored for validity Build believable future state projections

Bob Stahl Done Properly... Simpler (Not Easier) Better

Bob Stahl A - People... Top Management centric –The Leader of the business (CEO, President, GM, MD, etc.) must not only provide Support Funding Commitment Leadership –They must also be hands-on each and every month (Top Management must not only support it, they must be willing, ready, & able to do it!) Its not doing what you do better, its doing something different to be better! Counter-experiencial & Counter-intuitive equals Discomfort & Risk

Bob Stahl Engaging Top Management In Change, there is no Comfort (In Comfort, there is no Change) Those who succeed with Executive S&OP are willing the endure the discomfort that is required! Risk

Bob Stahl Uninformed (before Go/No-go #1) Boss: Okay, lets do an Executive Briefing. Semi-informed (after Briefing: Go/No-go #1) Boss: Okay, lets do a Live Pilot Fully informed (after Pilot: Go/No-go #2) Boss: Okay, lets go to full cutover. Low Risk Three Levels of Commitment...

Bob Stahl Homac Getting started... President was convinced this was worth looking at by Demand, Supply, and Finance executives. The Executive Briefing supplied all the necessary facts. The fact that it was a people based implementation was a strong selling point. After all, our people are our strength! After some Co-Chair possibilities a staff level chair person was chosen (support from the top) for Design Team Leader

Bob Stahl Homac Design Team Selections... Chose the best people disregarding perceived workload constraints To a person, the team members were enthusiastic to take on the task of developing and implementing this new tool Initial progress was slow but progressed nicely as hurdles were overcome Live pilot demo was very convincing with all design team members sharing in the presentation process Implementation went forward on time and fully supported

Bob Stahl Homacs added plus... ES&OP output provided clear supportable data for marketing our company ES&OP process at our company is being modeled for all of the Utility Products Group within Thomas & Betts ES&OP process is being used in tough market conditions to drive business performance We are looking for new simplifying assumptions to help us broaden the proactive benefits of our ES&OP process (space requirements)

Bob Stahl Implementation Path Months Business Improvement Phase I Preparation Phase II Expansion Live Pilot Demonstration Go/No-Go #2 Phase III Financial Integration Executive Briefing Go/No-Go #1 Kickoff Session Low Risk Low Cost High Impact Low Risk Low Cost High Impact

Bob Stahl Implementation Alternatives Build it and they will come Design it first, get the mechanics working, and then attempt to sell it to top management. = Low probability for success Hold the high ground Involve top management at the very outset of the implementation, and throughout. = High probability for success

Bob Stahl Success Requires Design Teams Job: 1.Defined set of practices (What, How, & Who) 2.Accurate, timely, & believed data 3.Valid, simplifying assumptions (Demand/Supply/Financial) (Getting out of Suicide Quadrant) Leaderships Job: 1.High discipline clear accountability (process & results) 2.Constant improvement 3.Changed performance measures 4.Culture/Behavior change (Gator on table)

Bob Stahl Thanks for Listening