1. © The Delos Partnership 2007 page 1 Integrated Enterprise Leadership Process Steps

2. © The Delos Partnership 2007 page 2 IEL Process Steps ACTIONACTION Week 1Week 2Week 3Week 4InnovationReviewInnovationReview CustomerDemandReviewCustomerDemandReview SupplyPlanReviewSupplyPlanReview PriorityReviewPriorityReview Stage 1 Stage 2 SeniorTeamReviewSeniorTeamReview Stage 5 Stage 7 Stage 3 SupportReviewSupportReview Stage 6 Stage 4

3. © The Delos Partnership 2007 page 3 Integrated Business Plan Integration of Innovation Innovation Supply Chain Demand Plan Support Activities

4. © The Delos Partnership 2007 page 4 Innovation step - Purpose 1.To manage all “new things” against strategic intent, and prioritise where needed 2.To review changes to plans and implications on other parts of the business 3.To review overall performance and managing projects It is not about managing projects, but must link to those other projects.

5. © The Delos Partnership 2007 page 5 Innovation What counts as innovation ?  New product  Change to existing product - line extension  New manufacturing process  Change to manufacturing process  Regulatory change  Capital expansion  ERP Project

6. © The Delos Partnership 2007 page 6 Integration of Innovation Innovation is carried out by many functions All innovation has impact on different areas Resources are finite Priorities need to be set for innovation projects

7. © The Delos Partnership 2007 page 7 Innovation Projects All share the following issues  Need Project Plan  Need business justification  Need co-ordination  Need cross project resource management  Difficult to forecast  Need integration into all other processes

8. © The Delos Partnership 2007 page 8 Management of Innovation needs a process Stage/Gate Process Gate 1 Gate 1 Gate 2 Gate 2 Gate 3 Gate 3 Gate 4 Gate 4 Gate 5 Gate 5 Stage 0 Stage 1 Stage 2 Stage 3 Stage 4 Review Initial Investigation Initial Investigation Research And Develop Full business Case Research And Develop Full business Case Develop Product in line With customer Requirements. Develop Product in line With customer Requirements. Test market products and service. Develop market Full production marketing and Sales of product Full production marketing and Sales of product Stage 5 Ideation Is it a good idea? Does it fit our criteria ? Business Case and prioritisation. Meets customer, supply and financial criteria. Meets customers’ and operations needs..

9. © The Delos Partnership 2007 page 9 Project Choices – the Five Questions for initial investigation Projec t Strategic Fit Strategic Fit Market Attractiveness Market Attractiveness Technology Fit Technology Fit Business Impact Change Orientation Change Orientation

10. © The Delos Partnership 2007 page 10 First Cut Priority Check ProjectStrategicMarketTechnologyBusiness Impact Change orientation Overall Average 1 10 10.0 2 1087 58.0 3 985887.6 4 767797.2 5 478956.6 6 389656.2 7 744585.6 8 655545.0 9 232373.4

11. © The Delos Partnership 2007 page 11 Financial justification for ideas Year 1Year 2Year 3Year 4Year 5 Volume100115120140150 Sales1012131517 Contribution22.52.752.52 Inc Overheads 0.5 Cash Flow1.52.02.2521.5 Wkg Capital10.50.2 Cap Expenditure 4 Net Cash Flow -3.51.52.051.81.3 Net Present Value @ 15 % =

12. © The Delos Partnership 2007 page 12 Prioritisation of ideas Project NameValue [£ m NPV]Strategic FitRiskRank ABC2055500 PQR5025500 VWY4552450 XYZ2054400 DEF3343396 RST255200 LMN555125 OPQ10011 FRG402180

13. © The Delos Partnership 2007 page 13 Financial Case Integrate into Business Plan Issues  How much  When

14. © The Delos Partnership 2007 page 14 Integration into Business Plan Year 1Year 2Year 3Year 4Year 5 Volume100115120140150 Sales1012131517 Contribution22.52.752.52 Inc Overheads0.5 Cash Flow1.52.02.2521.5 Wkg Capital10.50.2 Cap Expenditure 4 Net Cash Flow-3.51.52.051.81.3

15. © The Delos Partnership 2007 page 15 Management of Innovation Integrated Project Management – Programme Management

16. © The Delos Partnership 2007 page 16 Integrated Enterprise Leadership -3-2 Demand Plan70 Actual Demand717580 Difference1510 Cum Diff616 Months 123456789 Last Demand Plan70 New Demand Plan Difference Cum Diff Months Q4Q1 210 -3-2 Supply Plan75 Actual Supply706971 Difference-5-6-4 Cum Diff-11-15 123456789 Last Supply Plan75 70 New Supply Plan Difference Cum Diff Q4Q1 210 -3-2 Order Book Plan615651 Actual Orders 66677382 Difference61731 123456789 Last Plan4641 New Plan Difference Q4Q1 41 Family ABC New Forecasts Impact on Supply

17. © The Delos Partnership 2007 page 17 Integration with Supply Chain Design Purchase Intermediate Manufacture Sub-assemble Finish Distribute Cumulative Lead Time Insert New Products Here Insert New Products Here

18. © The Delos Partnership 2007 page 18 Integrated Innovations Planning IDEAS COMMERCIAL SUCCESS IEL AT FAMILY LEVEL – VOLUME AND VALUE MPS AT PRODUCT LEVEL – VOLUME AND VALUE TIME MPS/MRP AT PRODUCT AND COMPONENT LEVEL – VOLUME

19. © The Delos Partnership 2007 page 19 New Product Development Performance  Definition  Purpose  Horizon  Source of information  Number of new products developed on time  Improve NPD process  New product development time  Activity schedule in planning system or project plans

20. © The Delos Partnership 2007 page 20 NPD Performance Report NPD Performance = 3/6 = 50 %

21. © The Delos Partnership 2007 page 21 Earned Value Measure Definition Purpose Horizon Source of Info Proportion of work completed in value compared with work scheduled to be completed To review cost versus budget status of project Length of Project Project Plan reports

22. © The Delos Partnership 2007 page 22 Earned Value Report ValueABCDEFTotal Planned100150100250200 1000 Earned100150100 2000650 % comp.100 401000 Variance000-1500-200-350 Actual Cost 9022080300220910 Variance to EV +10-70+20-200-20-260 Variance Spend +10-70+20-50-20+200-90 Activities/Time

23. © The Delos Partnership 2007 page 23 Culture/behaviour Over optimism on likely success of new product Failure to manage scope of project effectively Abilene syndrome – management of agreement Functional development – lack of focus on customer.

24. © The Delos Partnership 2007 page 24 Traditional functional management Stage/Gate Process Gate 1 Gate 1 Gate 2 Gate 2 Gate 3 Gate 3 Gate 4 Gate 4 Gate 5 Gate 5 Stage 0 Stage 1 Stage 2 Stage 3 Stage 4 Review Research Department Research Department Development Department Development Department Development Department Development Department Operations Department Operations Department Commercial Department Commercial Department Stage 5 Research Department Research Department

25. © The Delos Partnership 2007 page 25 Process or program management Stage/Gate Process Gate 1 Gate 1 Gate 2 Gate 2 Gate 3 Gate 3 Gate 4 Gate 4 Gate 5 Gate 5 Stage 0 Stage 1 Stage 2 Stage 3 Stage 4 Review Stage 5 Research Department Research Department Development Department Development Department Financial/Support Department Financial/Support Department Operations Department Operations Department Commercial Department Commercial Department

26. © The Delos Partnership 2007 page 26 Innovations Manager Strategy Innovation Manager Development Ideas Project Plans Development Plans Supply Plans Project System Prioritised Plans

27. © The Delos Partnership 2007 page 27 Innovations Review Meeting Strategy Priorities Update on projects Impact analysis Financial plans – forecasts, prices and costs Review against strategic criteria Performance Measures Projects prioritised Agreement on major new projects Decisions on impact On Financial plan Issues for further Review Improvements in process Inputs Outputs Agenda 1.Status on existing projects 2.Changes to milestone dates 3.Impact analysis 4.Recommendations on impacts 5.Performance Measures Agenda 1.Status on existing projects 2.Changes to milestone dates 3.Impact analysis 4.Recommendations on impacts 5.Performance Measures

28. © The Delos Partnership 2007 page 28 Framework for Process Review Process Name : Process owner : Inputs:Purpose:Outputs: People:Culture/Behaviour:Measures: System/module:Requirements: Expected Actions: Link to other processes :

29. © The Delos Partnership 2007 page 29 Measures Close out of actions - are dates being met as at original project start date Projects started in right lead time? Information provided in right format? Outputs Revised resource plan Revised list of requirements Revised financial plan Inputs R&T:  New materials  New technologies  New surface treatments Environmental Requirements Feedback from previous cycle People Process Owner:  Patrick Monclar (ISO P2) R&T Project Managers GPT Representative S&OP Co-ordinator? Scope/Purpose Projects which impact critical resource:  Operations  Supply Chain Provide appropriate information to Supply/Customer Demand Review changes to existing projects (by exception) Links to Other Processes Global Planning Team “Global Innovation Planning – R&T” Process

30. © The Delos Partnership 2007 page 30 IEL Process Steps ACTIONACTION Week 1Week 2Week 3Week 4InnovationReviewInnovationReview CustomerDemandReviewCustomerDemandReview SupplyPlanReviewSupplyPlanReview PriorityReviewPriorityReview Stage 1 Stage 2 SeniorTeamReviewSeniorTeamReview Stage 5 Stage 7 Stage 3 SupportReviewSupportReview Stage 6 Stage 4

31. © The Delos Partnership 2007 page 31 Demand Planning and Management Horizon PLAN MANAGEEXECUTE Cumulative Lead Time Add or subtract To capacity Strong Link to Integrated Enterprise Leadership process Capacity and Materials “firm” Take Orders Today

32. © The Delos Partnership 2007 page 32 The Ten Rules of Forecasting 1.A forecast is necessary for planning supply and supporting financial and business plans 2.A forecast is never going to be right 3.A forecast is wrong because the assumptions were wrong 4.Accountability for the forecast rests with Sales and Marketing 5.Forecasting needs an application of intelligence 6.More accurate forecasting comes from your customers’ customer 7.Forecasts at an aggregate level are more accurate than the detail 8.Effective management of demand is key to managing forecast inaccuracy 9.A written policy for managing flexibility is essential 10.Measuring forecast accuracy will improve the process

33. © The Delos Partnership 2007 page 33 Common Reasons for Not Forecasting I can never make it 100% accurate My business has too many unforeseen peaks My business is different - you can’t forecast it I don’t know who’s responsible for it anyway It’s not in my objectives I’m measured on getting high sales - so who cares about the forecast The factory never make what I forecast anyway Nobody thanks me for it – so why bother ?

34. © The Delos Partnership 2007 page 34 Forecasting - is there a definition?

35. © The Delos Partnership 2007 page 35 Forecasting – Defined A forecast is a formal request to the Supply Management function from Sales and Marketing to have the product, materials and capacity available according to the quantity and at the time that they anticipate the demand will occur from the customer to ship the product to their premises

36. © The Delos Partnership 2007 page 36 Forecasting Needs a Simple Process FilterDemand Computeforecast CaptureActual C O N S E N S U S F O R E C A S T C O N S E N S U S F O R E C A S T Hold Demand Review Agree commercial plans plans Agree Exceptional demand Assumptions written down and agreed ReviewAccuracy

37. © The Delos Partnership 2007 page 37 Impact of Biassed Forecast Increase resources to meet higher demand OVERFORECASTING IS AS BAD AS UNDERFORECASTING More Stocks More Labour More Materials More Plant No Sales Cost of Goods increases OVERFORECASTING GROSS MARGIN GROSS MARGIN Stocks Low Labour Unavailable Short of Capacity Short of Materials Lost Sales Cost of Goods increases GROSS MARGIN GROSS MARGIN UNDERFORECASTING Resources insufficient to meet demand

38. © The Delos Partnership 2007 page 38 Execute Statistical Forecast Use demand history to produce trends and identify patterns Key influences to be derived : Base Trend Seasonality

39. © The Delos Partnership 2007 page 39 Sales Forecasting: Inputs New Customers New Products Pricing Initiatives Advertising And Promotions Cannibalisation Customers Own Forecast Competitors Activity External Factors

40. © The Delos Partnership 2007 page 40 Effect of New Products on Old Products Cannibalisation Definition: The impact (usually negative) of sales on old product from new product  Assess the impact - Timing Volume Finance  Review impact on run-out of old product – Product Life cycle effect

41. © The Delos Partnership 2007 page 41 Demand Creation Demand Facts  Population  Numbers between age 13-16  Children less than 11 Demand Drivers  Events (Xmas)  Desires  Technology Demand Controllers  Pricing  Promotion  Distribution  Advertising  Packaging ASSUMPTIONSASSUMPTIONS RESULTSRESULTS Market Share Market Reach Frequency of purchase

42. © The Delos Partnership 2007 page 42 Sales Planning Process EXAMPLE lSales vision and strategic framework lCarry out channel analysis and identify opportunities lEstablish sales development priorities and draft channel strategies lReview draft brand plans lIssue long term plans lDevelop detailed implementation plans lMonitor implementation P D A C

43. © The Delos Partnership 2007 page 43 Collaborative Planning - Progress Data Exchange Vendor Managed Inventory Co-Managed Inventory Trading Partnership Integrated Planning and Replenishment Ability to view Customer data No management process Possibly available on Internet Agreed process for managing inventory (VMI) – Supplier’s problem! Supplier schedules provided Agreed process for managing inventory Mutual availability of data and plans in joint systems Supplier schedules provided, and forecasts provided. Mutual sharing of long term plans Full briefing on long term strategy Joint improvement activities Joint forecast review Joint agreement on Business plans and inventory strategy Joint improvement activities Time

44. © The Delos Partnership 2007 page 44 Review “Exceptional” Demand Review large potential business  Tenders  New contracts  Large one time demand Decide whether to include in forecast or not  Avoid probabilities  Decide on hedging strategy  Agree on acceptance of risk

45. © The Delos Partnership 2007 page 45 Forecast Accuracy  Definition  Purpose  Horizon  Source of Information  Percent of items within a tolerance  Assess the degree of flexibility required by the supply side and to improve the process  Cumulative lead time (= purchasing plus manufacturing)  Forecasting module  Sales module

46. © The Delos Partnership 2007 page 46 Forecast Accuracy Report – by Error GroupProductForecastActualError% Error Product Group A Product 123100120+2020 Product 456200150-5025 Product 789300330+3010 Total600 017 % Product Group B Product 345200300+10050 Product 567500300-20040 Product 890600700+10017 Product 678200400+200100 Total1500170020040 %

47. © The Delos Partnership 2007 page 47 Forecast Quality and Bias Graph forecasts to display bias Bias

48. © The Delos Partnership 2007 page 48 Customer Service  Definition  Purpose  Horizon  Source of Information  Number of orders delivered to required date to customers’ premises  Flexibility required to meet customer needs  Make To Stock - none  Make To Order - product lead time  Sales order entry

49. © The Delos Partnership 2007 page 49 Customer Service Report – Against Request Date Customer Service = 2/6 = 33 %

50. © The Delos Partnership 2007 page 50 Sales and Marketing Focus Month 1 Region ARegion B Cust A Cust B Cust C Cust A Cust D Cust E Prod Group ABC Prod 1 Prod 2 Prod 3 Prod Group XYZ Prod 4 Prod 5 Prod 6 Month 2 Region ARegion B Cust A Cust B Cust C Cust A Cust D Cust E Prod Group ABC Prod 1 Prod 2 Prod 3 Prod Group XYZ Prod 4 Prod 5 Prod 6 Month 3 Region ARegion B Cust A Cust B Cust C Cust A Cust D Cust E Prod Group ABC Prod 1 Prod 2 Prod 3 Prod Group XYZ Prod 4 Prod 5 Prod 6 Month 4 Region ARegion B Cust A Cust B Cust C Cust A Cust D Cust E Prod Group ABC Prod 1 Prod 2 Prod 3 Prod Group XYZ Prod 4 Prod 5 Prod 6 Month 5 Region ARegion B Cust A Cust B Cust C Cust A Cust D Cust E Prod Group ABC Prod 1 Prod 2 Prod 3 Prod Group XYZ Prod 4 Prod 5 Prod 6 Month 6 Region ARegion B Cust A Cust B Cust C Cust A Cust D Cust E Prod Group ABC Prod 1 Prod 2 Prod 3 Prod Group XYZ Prod 4 Prod 5 Prod 6 Sales/ Account Managers Sales/ Account Managers Marketing One Set of Numbers One Set of Numbers

51. © The Delos Partnership 2007 page 51 Cultural issues 1.Over optimism or pessimism 2.Reforecasting to the budget 3.Not spending the time on forecasting 4.Forecasting what you want production to make and not what the customer wants 5.Not understanding forecast accuracy is a tool to improve the process.

52. © The Delos Partnership 2007 page 52 Demand Management Strategy Demand Manager Sales and Marketing System Forecast Plan Manufacturing And Purchasing ERP System Consensus Forecast

53. © The Delos Partnership 2007 page 53 Demand Review Meeting Strategy Update on Assumptions New Product developments Major changes to Forecasts Competitive threats/opportunities Performance Measures Unconstrained Demand Agreement on Risks and mitigation Actions to close gaps Financial Projections Actions for improving process Inputs Outputs Agenda 1.Revised Forecasts 2.New Products 3.Competitor analysis 4.Gaps to strategic plan and proposals 5.Performance Measures Agenda 1.Revised Forecasts 2.New Products 3.Competitor analysis 4.Gaps to strategic plan and proposals 5.Performance Measures

54. © The Delos Partnership 2007 page 54 Framework for Process Review Process Name : Process owner : Inputs:Purpose:Outputs: People:Culture/Behaviour:Measures: System/module:Requirements: Expected Actions: Link to other processes :

55. © The Delos Partnership 2007 page 55 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

56. © The Delos Partnership 2007 page 56 IEL Process Steps ACTIONACTION Week 1Week 2Week 3Week 4InnovationReviewInnovationReview CustomerDemandReviewCustomerDemandReview SupplyPlanReviewSupplyPlanReview PriorityReviewPriorityReview Stage 1 Stage 2 SeniorTeamReviewSeniorTeamReview Stage 5 Stage 7 Stage 3 SupportReviewSupportReview Stage 6 Stage 4

57. © The Delos Partnership 2007 page 57 Supply Chain Management Horizon PLAN MANAGEEXECUTE Cumulative Lead Time Add or subtract To capacity Strong Link to Integrated Enterprise Leadership Process Capacity and Materials “firm” Release Orders

58. © The Delos Partnership 2007 page 58 Supply Planning should happen at two levels.. -3-2 Supply Plan125 Actual Supply119118121 Difference-6-7-4 Cum Diff-13-17 123456789 Last Supply Plan125 120 New Supply Plan Difference Cum Diff Q4Q1 360 Family Detail Master \Schedule Capacity Requirements Plan Component Plan Rough Cut Rough Cut MRP/CRP

59. © The Delos Partnership 2007 page 59 Rough Cut Capacity Planning Objective  Translate Family Volumes into capacity requirements  Test validity of plan against demonstrated capacity How  Use planning profiles  Use critical resources  Use demonstrated capacity Result  Possible problem areas

60. © The Delos Partnership 2007 page 60 Rough Cut Capacity Planning Required Capacity Demonstrated Capacity Family Volumes x Rate per hour Family Volumes x Rate per hour Actual Production Per month Actual Production Per month Critical Resources

61. © The Delos Partnership 2007 page 61 Rough Cut Profile Key Resources UnitsFamilies ABCDEF Supplier A Lts2.13.44.21.3 Warehouse Pallet s 121420510 Quality Assurance Hrs3531072 Line ABC Hrs2515.6 Labeller Hrs4725 Filling m/c Hrs37925 Hours per 000 units

62. © The Delos Partnership 2007 page 62 Rough Cut 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

63. © The Delos Partnership 2007 page 63 Rough Cut Result – Month 5

64. © The Delos Partnership 2007 page 64 Rough Cut Result – Graph by Resource

65. © The Delos Partnership 2007 page 65 Rough Cut Result Capacity Requirement

66. © The Delos Partnership 2007 page 66 Objectives of Master Schedule State forward production plan by Stock Keeping Unit (SKU) Summarise what the business can do Provide Available to Promise information for Sales/Customer Service Provide stability to the supply organisation  Firm Planned Orders

67. © The Delos Partnership 2007 page 67 Master Schedule Link to IEL Product B3 Product B2 MPS Product B1 IEL Family B 1616 6Cum Diff 1010 51Difference 8080 7575 7171 Actual Demand 7070 7070 7070 Demand Plan -1 -2-2 -3-3 Months 7070 4 7070 5 7070 6 7070 7 7070 8 7070 3 Cum Diff Difference New Demand Plan 7070 7070 7070 Last Demand Plan 921 Months 210210 210210 Q1Q1 Q4Q4 -15-15 -11-11 Cum Diff -4-4 -6-6 -5-5 Difference 7171 6969 7070 Actual Supply 7575 7575 7575 Supply Plan -1 -2-2 -3-3 7070 4 7070 5 7070 6 7070 7 7070 8 7070 3 Cum Diff Difference New Supply Plan 7070 7575 7575 Last Supply Plan 921 210210 210210 Q1Q1 Q4Q4 3131 1717 6Difference 8282 7373 6767 Actual Orders 66 5151 5656 6161 Order Book Plan -1 -2-2 -3-3 4141 4 4141 5 4141 6 4141 7 4141 8 4141 3 Difference New Plan 4141 4141 4646 Last Plan 921 4141 4141 Q1Q1 Q4Q4 Make – To- Order

68. © The Delos Partnership 2007 page 68 Basic Formula Item Data BOM’s And Routes Stock And Capacity Master Schedule ForecastsOrders Suppliers Factories What do they Actually Want ? What have We got ? What does it need ? What do we need to do ? What do we think they Want ?

69. © The Delos Partnership 2007 page 69 Planned Orders Planned Orders Capacity Requirements Plan Component Plan Red Item 14356 Sub-Item 43781 2 per Automatic re-plan Plans Matched sets of Parts Plans hours for CRP

70. © The Delos Partnership 2007 page 70 Capacity Requirements Plan Opn No Work Centr e Operatio n SetRun 1045Inspect0.50.10 2055Mix1.00.5 3065Pack1.00.2 Routing Work Centre Information 8 Planned Order Release 0Projected Available Balance 25Scheduled Receipts 202020Projected Gross Requirements 97654321 Periods 5 5 5 5 10 10 -15 -15 10 10 -10 25 25 15 15

71. © The Delos Partnership 2007 page 71 Capacity Plan resolution

72. © The Delos Partnership 2007 page 72 Time Fence Policy Horizon PLAN MANAGEEXECUTE Cumulative Lead Time Add or subtract To capacity Strong Link to Integrated Enterprise Leadership Process Capacity and Materials “firm” Release Orders Open SesameFirmNO !

73. © The Delos Partnership 2007 page 73 Time Fence Policy Should relate to Cumulative Lead Time (CLT)  Requires review of CLT by product  Could be different by product group Should state who can change and when Should be clear about “Emergency Changes” Must be adhered to !

74. © The Delos Partnership 2007 page 74 Integrated Enterprise Leadership -3-2 Demand Plan120 Actual Demand119125132 Difference512 Cum Diff416 Months 123456789 Last Demand Plan120 New Demand Plan Difference Cum Diff Months Q4Q1 360 -3-2 Supply Plan125 Actual Supply119118121 Difference-6-7-4 Cum Diff-13-17 123456789 Last Supply Plan125 120 New Supply Plan Difference Cum Diff Q4Q1 360 -3-2 Stock Plan717681 Actual Stock 66665948 Difference-5-17-33 123456789 Last Stock Plan8691 New Stock Plan Difference Q4Q1 Make – To- Stock Senior Team Focus MPS Focus

75. © The Delos Partnership 2007 page 75 Master Schedule Definition Purpose Horizon Source of Information Valid Material and Capacity plans and stability of those plans Improve planning process, and provide desired stability to supply chain Product’s Cumulative Lead Time Master Scheduling module

76. © The Delos Partnership 2007 page 76 Master Schedule Achievement Schedule Achievement = 5/6 = 84 %

77. © The Delos Partnership 2007 page 77 Right First Time Report Commentary Right First Time suffered from new component supplier Product specs not updated

78. © The Delos Partnership 2007 page 78 Supplier Performance  Definition  Purpose  Horizon  Source of Information  Number of deliveries received into stock on or before due date/time  Improve supplier delivery process  Purchasing Lead Time or Time Fence  Vendor Schedule or Purchase Order`

79. © The Delos Partnership 2007 page 79 Supplier Achievement Report Commentary Supplier achievement suffered from alternative supplier having quality problems The new product caused untold problems

80. © The Delos Partnership 2007 page 80 Master Scheduler Strategy Sales Forecasts Customer Orders Manufacturing Plan Purchasing Plan MRP System Balanced Plan Master Scheduler

81. © The Delos Partnership 2007 page 81 Supply Review Meeting Update on new Products/Projects Latest Forecast of unconstrained demand Rough Cut and Demonstrated Capacity Detailed capacity issues Material constraints Performance Measures Recommendations for resolving issues Actions to meet plan Agreed Supply Plan Proposals for improving process Inputs Outputs Agenda 1.Required production plan 2.Issues in meeting plan 3.Proposals for resolving issues 4.Capex projects 5.Performance Measures Agenda 1.Required production plan 2.Issues in meeting plan 3.Proposals for resolving issues 4.Capex projects 5.Performance Measures

82. © The Delos Partnership 2007 page 82 Framework for Process Review Process Name : Process owner : Inputs:Purpose:Outputs: People:Culture/Behaviour:Measures: System/module:Requirements: Expected Actions: Link to other processes :

83. © The Delos Partnership 2007 page 83 By Site SUPPLY PLANNING PROFORMA (1) Site Load & Capacity Profile Critical Workcentre Load & Capacity Profiles Other Workcentre Load & Capacity Profiles 5 year horizon - Rolling first 24 months - Fixed years 3 to 5 (re-establishment of year 5 @ Roll 1) OE by programme Spares by major parts (product/process)

84. © The Delos Partnership 2007 page 84 Measures Schedule adherence MPS stability Expedited parts internal/external Concessions Actual/planned capacity Outputs Load/capacity issues Statement of policy decisions Supply plan Requirements for cap-ex Security stocks Recording of actions taken “What if?” scenarios & alternatives for resolving issues Identification of risk on materials See slides 29-30Inputs Supply Planning:  Material Planning (MRP)  Capacity Planning  Maintenance Planning  Make/Buy  Operations Assumptions: Demonstrated capacities Arrears management Lead-times  Supplier Partnerships  Purchase schedules  Performance measurements  Quality Feedback from previous cycle People Process Owner: Process Owner:  L. Schneider-Maunoury (ISO P6) Site Operations Managers Maintenance Quality Master scheduler Site procurement/Supply Chain Mgr’s Global procurement GPT S&OP Co-ordinator Human resources Scope/Purpose Produce a realistic Manufacturing & Supply Plan Balance required capacity vs. planned capacity Define mismatches on capacity Resolve Operating Plan only issues Improve:  Process  Quality  Job satisfaction  Flow to increase capacity NOT to solve all issues Links to Other Processes Make/buy Load/capacity reviews MPS - where applied GPT “Supply Planning” Process

85. © The Delos Partnership 2007 page 85 IEL Process Steps ACTIONACTION Week 1Week 2Week 3Week 4InnovationReviewInnovationReview CustomerDemandReviewCustomerDemandReview SupplyPlanReviewSupplyPlanReview PriorityReviewPriorityReview Stage 1 Stage 2 SeniorTeamReviewSeniorTeamReview Stage 5 Stage 7 Stage 3 SupportReviewSupportReview Stage 6 Stage 4

86. © The Delos Partnership 2007 page 86 Support What are the support activities? They will depend on your particular organisation – one person’s critical activity is another’s support role! Examples: Finance IT Quality Engineering Human Resources

87. © The Delos Partnership 2007 page 87 Support step Establish the resource needs and priorities for all support activities – e.g.  Finance  Human Resources  Information Technology  Engineering Provide financial base for decisions Highlight resource issues in these areas, which are relevant To ensure that all plans – innovation, demand and supply – are underpinned by the appropriate support resources.

88. © The Delos Partnership 2007 page 88 Financial plan Pull together all the volume plans into one financial picture Volume x price = revenue Volume x cost = variable cost Margin = revenue – variable cost Overheads are fixed Profit is the result Assumptions on assets Cash Flow calculation

89. © The Delos Partnership 2007 page 89 Revised Financial Plan

90. © The Delos Partnership 2007 page 90 Reviewing the Gap Aspiration

91. © The Delos Partnership 2007 page 91 Budget

92. © The Delos Partnership 2007 page 92 Preparation of the budget Financial projection enables  Visibility of current year outturn – early  Visibility of subsequent year(s) to enable budget to be one set of numbers – early Requires culture change  No six month process  No sandbagging of the numbers  Simple cut-off period  “Roughly right” rather than “precisely wrong”

93. © The Delos Partnership 2007 page 93 Budgets – the issues Annual budgets irrelevant in a fast changing world It is a game played by any number of players Budget is used as a “control mechanism” – but it does not work

94. © The Delos Partnership 2007 page 94 Information Resources I have been trying to get that report on Customer Service written for six months. You can never get anything out of that department ! How am I expected to get something out of nothing

95. © The Delos Partnership 2007 page 95 IT Resources Scheduler Strategy Project Plans Help Desk Enquiries Infrastructure plan Resource Requirements Maintenance Plan Balanced Plan IT Resources Scheduler

96. © The Delos Partnership 2007 page 96 Information Resources Integrated Project Management

97. © The Delos Partnership 2007 page 97 Customer Service Report – Against Request Date Customer Service = 2/6 = 33 %

98. © The Delos Partnership 2007 page 98 Customer Service Report – Against Promise Date Customer Service = 6/6 =100 %

99. © The Delos Partnership 2007 page 99 Human Resources 1.Plan for Direct and Indirect labour requirements 2.Organisational development 3.Training plans by individual as a result of Training Needs analysis What financial benefits being delivered ? What resource issues exist ? 4.Management of Pay negotiations Move to Annualised hours 5.Downsizing, Rightsizing, upsizing, outsourcing

100. © The Delos Partnership 2007 page 100 Quality Assurance Time period 2005 Q3 2005 Q4 2006 Q1 2006 Q2 2006 Q3 2006 Q4 >>>> >> 2010 Q4 Numbers of units Unit Of Measure 75 100 150 QA on manufacturing and assembly 12 181614 18 New product project A (Strategic plan ref # 12) 1232100 New product project B (Strategic plan ref # 06) 0012330 New Layout Project (Strategic plan ref # 15) 1112410 Total # of people 14152322 18

101. © The Delos Partnership 2007 page 101 Support Review Meeting Update on new Products/Projects Latest projection of demand and supply and inventory/shipments in Financial terms Projection of Overheads Assumptions on debtors creditors/debtors Performance Measures Strategic financial plan Recommendations for resolving issues Actions to meet plan Agreed revised financial plan Proposals for improving process Inputs Outputs Agenda 1.Latest projections on Profit and cash flow 2.Issues in meeting strategic plan 3.Proposals for resolving issues 4.Performance Measures Agenda 1.Latest projections on Profit and cash flow 2.Issues in meeting strategic plan 3.Proposals for resolving issues 4.Performance Measures

102. © The Delos Partnership 2007 page 102 Framework for Process Review Process Name : Process owner : Inputs:Purpose:Outputs: People:Culture/Behaviour:Measures: System/module:Requirements: Expected Actions: Link to other processes :

103. © The Delos Partnership 2007 page 103 Need for Multi-Level Integrated Planning LOCAL/COUNTRY Brand Development Customer’s Tastes REGIONAL/ SECTOR GLOBAL Manufacturing Economics Research Costs Financing Competition LEVEL 1 LEVEL 2 LEVEL 3

104. © The Delos Partnership 2007 page 104 Where do the main processes occur ? Innovation Customer Relationships Supply Management Financial Priorities Strategic Review LEVEL 1 Customer/Country/ Market LEVEL 2 Region/Country Grouping/Business Sector LEVEL 3 Region/Global

105. © The Delos Partnership 2007 page 105 Multi-Level Integrated Enterprise Planning Week 1Week 2Week 3Week 4 Demand Planning Demand Planning Demand Planning Demand Planning Demand Planning Customer New Activity Review Innovation Supply Review Supply Review Supply Review Supply Review Financial Priorities Consolidated Recocniliation Financial Priorities Corporate Review Senior Team Review GLOBALLOCALGLOBALLOCAL LEVEL 1 Country/ Market LEVEL 2 Region/ Business Unit LEVEL 3 Europe/ Global HQ

106. © The Delos Partnership 2007 page 106 Top Level GS&OP Process Diagram: Top Level GS&OP Process Diagram: Global Innovation Customer Demand Supply Planning Priority Planning Senior Team Week 1Week 2Week 3Week 4 LEVEL 1 Country LEVEL 2 Business Unit LEVEL 3 Global R&T Intersite Demand BU Demand CS Demand Site Demand BU/CS Priority Planning Senior Team Review Global Planning Priority Planning By Site Innovation @ Sites Supply Planning By Site

107. © The Delos Partnership 2007 page 107 Revised Top Level GS&OP Cycle: Week 3 Week 2 Week 1 Week 4 MTWFT 5678 Calendar Month 1 12 9 1213141516 1920212223 26 2728 30 29 BU Demand CS Demand STR Global Planning Site Priority Planning R&T Site Demand Innovation @ Sites Intersite Demand BU/CS Priority Planning Supply Planning By Site Supply Planning By Site MTWFT Calendar Month 2 6 2 3 4 5 13 9 10 11 12 20 16 17 18 19 27 23 24 25 26 3031 STR Global Planning BU Demand CS Demand Site Demand Innovation @ Sites Intersite Demand Site Priority Planning BU/CS Priority Planning R&T