SCT Paramters 1© The Delos Partnership 2005 Integrated Enterprise Leadership - Top Management’s “handle on the business “

SCT Paramters 2© The Delos Partnership 2005 Disintegrated Business Planning Long term plan Short term Plan Medium Term Plan

SCT Paramters 3© The Delos Partnership 2005 Objectives of Integrated Enterprise Leadership One set of numbers at all times Integrated Plans Realistic Plans Visibility and transparency Teamwork Communication of goals and objectives Decisions made in timely fashion More planning, less fire-fighting Consistent performance measures Delivery of the strategy

SCT Paramters 4© The Delos Partnership 2005 Lead Time Management Lead time is not something that should be a result - it is something that should be managed Forecast of Requirements Actual Requirements/Sales Actual Shipments Planned Production/ Shipments

SCT Paramters 5© The Delos Partnership 2005 Make to Order Production = Demand Plan + (Current Order Book - Orderbook Target) = ) PRODUCTION ORDER BOOK

SCT Paramters 6© The Delos Partnership 2005 Integrated Business 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 – Family Units

SCT Paramters 7© The Delos Partnership 2005 Integrated Enterprise Leadership 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 7 Stage 3 Support Review Support Review Stage 6 Stage 4

SCT Paramters 8© The Delos Partnership 2005 Framework for Process Review - Innovation Process Name Inputs Customer enquiry Tasking List (sales) SpecificationPurpose/Agenda 1. Review all new bids and enquiries 2. Agree which enquiries will form part of the formal forecast 3. Review resource issues relating to all new products 4. Decide which products should be delayed or cancelled 5. Approve capital expenditure proposal request to go forward to Board Outputs Tender document – risks and assumptions Go/No go decision Capital requirements and resources People Sales Director (lead), Bid Manager, Commercial, KAM, Demand Manager, Estimating Materials, Supply, Finance Desired Culture HonestyRealism All bids to go through this process Measures OTIF for new projects Cost, value, margin Capacity and Resources Systems to support this step ACT!, TABS, Corporate Planning Model, Time & Attendance, CODA, Excel, Word, Visio. Project planning tool? Link to other Processes Demand, Supply, Support and Prioritisation reviews

SCT Paramters 9© The Delos Partnership 2005 Framework for Process Review – Customer Demand Process Name Inputs Business strategy Order book sales Assumptions Major forecast changes InnovationPurpose/Agenda 1. Review new product forecasts 2. Review changes to previous forecasts 3. Agree and sign off assumptions 4. Agree actions to close gaps 5. Review performance measures Outputs Sales Forecast/Demand Plan Unconstrained demand Uncertainties Financial projection People Sales Director (lead), KAM, Bid Support Manager, Demand Manager, Commercial Desired Culture Cohesive and agreed sales plan Measures Business plan Forecast accuracy Order book value Customer service –on time in full to customer promise date Systems to support this step ACT!, TABS, Excel, Corporate Planning model Link to other Processes Supply, Prioritisation and Senior Team Review

SCT Paramters 10© The Delos Partnership 2005 Framework for Process Review – Supply Plan (Group) Process Name Inputs Sales forecast (not Demand Plan at this stage) Demonstrated capacity What ifs New product plans Planned shut downs etc Purpose/Agenda 1. Review demand 2. Determine if capacity available 3. Determine issues and possible actions for outcome Outputs Company plan, site plans People Operations Director (lead), A/D Materials, A/D Supply, Company Planning Manager, Site Planning Managers? Desired Culture Balanced realistic plan Measures Schedule adherence (actual production versus planned production) Load versus capacity Planned shipments versus actual shipments Earned value budget Systems to support this step TABS, Time & Attendance, CODA, Corporate Planning model(?) Link to other Processes Innovation, Supply, Site Supply Plans, Prioritisation and Senior Team reviews

SCT Paramters 11© The Delos Partnership 2005 Framework for Process Review – Supply Plan (Site) Process Name Inputs Capacity required by work centre, Demonstrated capacity by work centre, Site demand forecasts, Planned maintenance, New product plans Purpose/Agenda 1. Review requirements by site 2. Agree any issues and actions designed to resolve issues 3. Review performance measures Outputs Agreed site production plan Issues associated with the plan and proposed alternatives Proposals on how to constrain demand People Site general manager (lead), Site planning manager, Planner/buyers, Programme/production managers (PAMs) Desired Culture HonestyOpenness Solution culture Measures Schedule adherence, Variances to plan, Demonstrated capacity versus planned capacity, Earned value budget, Lead time reduction Late starts into production, Number of past due orders on TABS Systems to support this step TABS, Time & Attendance, Link to other Processes Supply Plan (Group) review

SCT Paramters 12© The Delos Partnership 2005 Framework for Process Review – Priority Process Name Inputs Inputs from all previous stages Purpose/Agenda 1. Financial statement of all demands 2. Alternatives for evaluation (external events and internal events) 3. One set of realistic plans Outputs Decisions on short term capacity etc where they can be made Options for Senior Team review Review of financial picture Options for closing the gap Numbers to form the basis of next year’s budget People Finance Director (lead), Demand Manager, Company Planning Manager, A/D Materials/Supply(?) Desired Culture Issue resolution or costed recommendations for Senior Team review. Measures Financial forecast to budget as well as OTIF for new projects and customer orders, forecast accuracy, schedule adherence, demonstrated capacity versus planned capacity Systems to support this step TABS, CODA Link to other Processes Innovation, Demand, Supply and Support reviews

SCT Paramters 13© The Delos Partnership 2005 Framework for Process Review – Senior Team Process Name Inputs Financial plan Issue resolution or costed alternative Purpose/Agenda 1. Agreed plan 2. Agreed actions 3. Reviewed and agreed Financial Plan. Outputs Agreed one set of numbers People CEO (lead), Sales Director, Operations Director, Finance Director, Deputy CEO Desired Culture Agreed one set of numbers Measures Demand forecast accuracy, Customer order delivery, lead time reduction, velocity – all activities and functions, quality right first time, schedule achievement, on time new product introduction Systems to support this step TABS, Corporate Planning model Link to other Processes Innovation, Demand, Supply, Support Priority reviews

SCT Paramters 14© The Delos Partnership 2005 Planned Calendar ……. Dates set in advance (annually) Everyone knows when it is Agenda pre-set Preparation happens If nothing to discuss, then no meeting Almost non-voluntary

SCT Paramters 15© The Delos Partnership 2005 Two Leadership Stages Prioritisation Family Summary –Major Changes –Main Assumptions –Threats & Opportunities –Decisions Taken –Decisions to Take –Recommendations, Implications, Costs Alignment to Business Plan Innovation Status Senior Team Review

SCT Paramters 16© The Delos Partnership 2005 Priority Review Objectives –To resolve issues around demand supply and innovation plans - timing and resources –To provide proposed financial statement –To facilitate what-ifs and provide basis for decisions (facts not opinions) –To provide issues for resolution by Senior Team

SCT Paramters 17© The Delos Partnership 2005 Objectives for Senior Team Review Make decisions on major issues Delegate issues to the right level Review the long-term picture not short term crises Review process based performance measures Review and develop long-term strategy Make it the meeting for the Executive

SCT Paramters 18© The Delos Partnership 2005 Agenda for discussion Current Business situation –Plan versus Budget/Business Plan –Plan versus last plan (volume/value) Strategic Review [1/quarter] Assumptions on which plan is based Issues for Resolution –Innovation development issues –Supply/Demand Allocation issues –Major Capacity changes required –Outsourcing –Capital Expenditure Plans –HR/IT support issues –Reorganisation requirements Performance measures Review of IEL process against assessment criteria

SCT Paramters 19© The Delos Partnership 2005 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 Eur 0.5 m in Additional capacity for New Product

SCT Paramters 20© The Delos Partnership 2005 Reviewing the Gap Aspiration

SCT Paramters 21© The Delos Partnership 2005 Traditional Measures Sales versus budget Machine Utilisation Purchase Price Variance Overhead Recovery Headcount Direct Labour Productivity Inventory Level

SCT Paramters 22© The Delos Partnership 2005 The Core Measures and Financial Effect

SCT Paramters 23© The Delos Partnership 2005 Integrated Enterprise Leadership 1.Formal process leading to effective decisions 2.Facts rather than opinions 3.Organised common-sense 4.Long-term rather than short-termist 5.Performance measurement based rather than “making it” against the budget 6.Ownership and responsibility for the numbers 7.A Rolling financial plan – giving time to adjust rather than panic at year end 8.Team-based decision making based on common goals and objectives 9.Strategy set and communicated and delivered 10.Requires democracy for the planning phase, and adherence to plan for the execution phase