Orange County Convention Center Orlando, Florida | June 3-5, 2014 Planning Board Experiences – Scheduling and More Julie Lushbough and Veronica Morris Hallmark Cards, Inc.

 Production Planning Linkages / Relationships  Technical Application of APO Planning Board  Capacity Feasible Production Plans Learning Points

 Production Planning Linkages  From Go Live to Current State  Applying APO Planning Board Techniques  Scheduling Resources / Raw Materials Planning  Setting Production Plans / Metrics Key Learnings

4 Who we are…  Hallmark Cards, Inc. - Founded 1910  $3.9 billion business  40,000 US retail stores - 2,400 Hallmark Gold Crown  100 countries  3,400 staff in Kansas City  10,000 new and redesigned greeting cards annually  49,000+ products in stores

Giftwrap Party plates, napkins, cups Tissue Bows and Ribbon Stickers Moveable Decorations Gift Presentation and Party Product

SAP at Hallmark Cards, Inc. Marketing Sales Product Development Demand/Inventory Planning Production Planning Manufacturing Procurement Distribution WM Transportation SAPLegacy Business Systems

Key Learnings  Production Planning Linkages  From Go Live to Current State  Applying APO Planning Board Techniques  Scheduling Resources / Raw Materials Planning  Setting Production Plans / Metrics

Manufacturing/ Procurement Execute Production Plan on time ensuring Fulfilment of Customer Need Production Planning Orders to Meet Customer Need within Capacity Constraints Inventory Planning Customer Need Exception Based Collaboration Total Cost of Product Production Planning Linkages

Success: Dependent upon forecast accuracy with few surprises Results: Direct alignment with Inventory Planning °Weekly tactical sessions °Manager strategy sessions Connection with Marketing °Upcoming programs °Product complexity/trends Business Partnership

Results (cont.) : Structured evaluation process for unforecasted demand Education °Inventory Planning / Production Planning / Mfg / Procurement on-going discussions Expectations °System °Process Business Partnership

Success: Dependent upon execution to production plans Results: Working production by date °Trust in the system / plan °Asset utilization / Resource planning Setting Production plans and staffing °Weekly collaborative planning °Defined accountability Manufacturing Partnership

Key Learnings  Production Planning Linkages  From Go Live to Current State  Applying APO Planning Board Techniques  Scheduling Resources / Raw Materials Planning  Setting Production Plans / Metrics

Customer Development Model Line SKUs Defined Ship Date Demand Planning Weekly Forecast Signals when product is required Inventory Planning Purchase Requisitions from DCs to Plants Production Planning Planned/Production Orders Purchase Requisitions – raw materials Materials to Inventory Production Plan execution APO APO/ECC ECC Supply Chain Planning Outputs

Go-Live May 2010: Forward Scheduling 100 Days into the future Pushed too much into mfg without real priority Increased Inventory at all levels (Mfg and DC) 6 Months Later: Shortened Planning Horizon to 30 Days No Planned orders Capacity Planning/Forecasting ability eliminated Early data error resolution impossible Where We Started

100 DAY HORIZON TIME VOLUME Capacity Demand Production Plan Where We Started

30 DAY HORIZON TIME VOLUME Capacity Demand Production Plan 6 Months Later

 Turned off batch scheduling process  Opened planning horizon to 300 days  Added Goods Receipt and Queue time, capacity evaluation by work center  Maintained backward planning using PPDS (Production Planning Detailed Scheduling) MRP  Made Planning Board Configuration changes  Developed standard work for Production Planners Key Changes

 Forecast developed by Demand Planner  SNP (Supply Network Planning) Engine runs the DRP (Distribution Requirements Planning) Process at the distribution centers  Lot Sizing and multi-level MRP occurs at the manufacturing plant via PPDS  Production Planning creates an executable plan via the Detailed Scheduling Planning Board  Finished goods and components are capacity planned  Raw Material Planning in concert with Procurement How it Works Today

Key Learnings  Production Planning Linkages  From Go Live to Current State  Applying APO Planning Board Techniques  Scheduling Resources / Raw Materials Planning  Setting Production Plans / Metrics

( Distribution Requirements Planning)  Forecast by Demand Planner  SNP runs the DRP Process at the distribution centers “lot for lot” Forecast Purchase Requisitions DRP Process

Lot Sizing and MRP occurs at the manufacturing plant via PPDS Lot size rules determined by Inventory Planning for finished goods PPDS – Multi-Level MRP Run ( Production Planning Detailed Scheduling) Finished Roll Printed Stock Raw Paper Stock

Lot Sizing and MRP occurs at the manufacturing plant via PPDS Lot size rules determined by Production Planning/Mfg for semi-finished goods. PPDS – Multi-Level MRP Run Finished Roll Printed Stock Raw Paper Stock

Production Planning creates an executable plan Note: Work is infinitely scheduled out of PPDS MRP run Only one machine available for this resource Scheduling of Resources ( Detailed Scheduling Planning Board)

A scheduling strategy is selected  Backward Scheduled  “Squeeze in Operation” Scheduling of Resources

Temporary capacity changes Set Fixing/Planning Intervals Adjust Resource Capacity Profiles Scheduling of Resources

Resource Capacity Profile Utilization Rate Number of Machines Open Hours Scheduling of Resources

A work center hierarchy ensures synchronization of components Scheduling of Resources Work Center Hierarchy

Key Learnings  Production Planning Linkages  From Go Live to Current State  Applying APO Planning Board Techniques  Scheduling Resources / Raw Materials Planning  Setting Production Plans / Metrics

 Single mixed resource  Open 21 hours a day  Reschedule aligns work to capacity 1) Work infinitely scheduled out of the PPDS MRP Run 2) Fixing Interval added to secure short term Production Plan 3) Scheduling executed on packaging operations Scheduling of Resources

 PPDS MRP is run on components to realign orders to dependent demands  Scheduling is done on semi-finished good bottleneck work centers Scheduling of Resources

 ECC MRP runs nightly on raw materials  Exceptions in MD06 Raw Material Purchasing Plan Finished Roll Printed Stock Raw Paper Stock

300 DAY HORIZON TIME VOLUME Capacity Demand Production Plan Today

33 Benefits Standard Work Robust use of the Planning Board Efficient Planning Highly trusted plan Strategic Resource Planning- Units  Overtime 

Key Learnings  Supply Chain Linkages  From Go Live to Current State  Applying Planning Board Techniques  Scheduling Resources / Raw Materials Planning  Setting Production Plans / Metrics

Data for illustrative purposes only Setting Production Plans Production goals set weekly with Manufacturing

Data for illustrative purposes only Example – Party packaging and component requirements Work overtime Carry over into following week Balance volume between weeks Setting Production Plans

37 Metric - Evaluation Data for illustrative purposes only - Evaluation of orders not meeting on-time completion goal - LEAN Problem solving / root cause analysis Late orders Performance: On-time Completion

Manufacturing/ Procurement On-time Completion Raw Materials Inventory Production Planning Executable Plan Inventory Planning Inventory Levels Metric Linkage Serviceability Asset Utilization

 Production Planning Linkages / Relationships  Technical Application of APO Planning Board  Capacity Feasible Production Plans Learning Points

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