1. Syn Lean and Agile 1 © The Delos Partnership 2005 Lean and Agile Applying the ideas to the Demand side

2. Syn Lean and Agile 2 © The Delos Partnership 2005 The Delos Model Vision Strategy Prioritisation Prioritisation Innovation Innovation Demand Support Supply Supply

3. Syn Lean and Agile 3 © The Delos Partnership 2005 30 18 10 18 14 10 Price isn’t everything… Factors involved in the purchasing decision (%) McKinsey

4. Syn Lean and Agile 4 © The Delos Partnership 2005 Lowest Cost or Different? Price Value: Quality Benefits Aldi Kwiksave Sainsbury Tesco Waitrose Marks & Spencer

5. Syn Lean and Agile 5 © The Delos Partnership 2005 Value & Cost Perceived Value Cost x Rover Ford x Change in Cost Change in Value High Low High Skoda X Bentley X Both Volkswagen

6. Syn Lean and Agile 6 © The Delos Partnership 2005 Value & Cost - Agrochemicals Perceived Value Cost Change in Cost Change in Value High Low High Makhteshim X Bayer X Syngenta X Chinese Formulators X

7. Syn Lean and Agile 7 © The Delos Partnership 2005 Customer Value Pricing Product Score 1-5 Easy to use SafeBroad Spectrum Long Lasting Short Lead Time Customer Ranking 45315 Product Pack 24551 Formulation 13551 Case Size 15551 Active Ingredient 15551 Customer Requirements FEATURESFEATURES FEATURESFEATURES OnlyAvailable From Switzerland OnlyAvailable Could a higher price be achieved if it was easier to use? Could a higher price be achieved if it was available locally ?

8. Syn Lean and Agile 8 © The Delos Partnership 2005 Adding value…

9. Syn Lean and Agile 9 © The Delos Partnership 2005 Workshop What could be added to the ‘product-service bundle’ that customers would value…  Competitive advantage  Higher pricing e.g. - packaging - delivery - customisation - advice and after service

10. Syn Lean and Agile 10 © The Delos Partnership 2005 Value position Increasing Value Brand development Tailored service Flexible response Partnership Service support Understanding the customer’s customer Reducing Perceived Costs ( Price) Inventory reduction Reduced stockouts Improved cash flow Reduced handling / order processing

11. Syn Lean and Agile 11 © The Delos Partnership 2005 New Car Value Attributes Importance vs Satisfaction 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 Brand Product Characteristics Price Payment Terms Order/Delivery Time Dealer Reputation Staff at the Dealer Dealer Facilities After Sales Service Importance Satisfaction Cardiff Business School New car - Competitive Factors

12. Syn Lean and Agile 12 © The Delos Partnership 2005 Identify Competitive Factors Factor12345 COST Price Pressure Not a key issueOnly fair issueImportantVery importantKey issue Our ability to produce at low cost ? NoneFairReasonableStrongExcellent VOLUME Variation in Sales month to month +/-10 %+/-20 %+/30 %+/-50 %> +/-50 % We can vary production volumes +/-10 %+/-20%+/30%+/-50%> +/50 % MIX Market demand of range 0-45-1920-4950-99> 100 We can easily make 0-45-1920-4950-99> 100 RESPONSE Market Pressure for quick LittleFairModerateGreatKey Our ability to provide quick NoneFairModerateStrongVery capable

13. Syn Lean and Agile 13 © The Delos Partnership 2005 Workshop Workshop on Competitive Factors – what is the source of Syngenta’s competitive advantage in value versus Bayer etc. ?

14. Syn Lean and Agile 14 © The Delos Partnership 2005 Product Mapping Volume Demand variability Demand lead time Variety Product Life Cycle Margin (profitability) % cost breakdown (labour content)

15. Syn Lean and Agile 15 © The Delos Partnership 2005 Volume Clusters AB ‘Runners’ ‘Repeaters’ ‘Strangers’ SALES PRODUCTS C

16. © The Delos Partnership 2005 Product profiles AB D C Sales Volume time

17. Syn Lean and Agile 17 © The Delos Partnership 2005 High Demand Variability Low Low Volume High Volume / Variability Analysis

18. Syn Lean and Agile 18 © The Delos Partnership 2005 High Demand Variability Low Low Volume High Volume / Variability Analysis

19. Syn Lean and Agile 19 © The Delos Partnership 2005 PP 321/Karate Analysis

20. Syn Lean and Agile 20 © The Delos Partnership 2005 Workshop What is the demand variability/volume profile for your products ?

21. Syn Lean and Agile 21 © The Delos Partnership 2005 Forecasting/Demand Strategy Runners Repeaters Strangers Make to Stock – End item Forecast Assemble to Order – Family Forecast Forecast of capacity required

22. Syn Lean and Agile 22 © The Delos Partnership 2005 Forecasting Needs a Simple Process Filter Demand Execute Forecast Capture Actual C O N S E N S U S F O R E C A S T Review Commercial Plans Review Exceptional Demand Hold Demand Review Assumptions written down and agreed

23. Syn Lean and Agile 23 © The Delos Partnership 2005 Sales Forecasting: Inputs New Customers New Products Pricing Initiatives Advertising And Promotions Cannibalisation Customers Own Forecast Competitors Activity External Factors

24. Syn Lean and Agile 24 © The Delos Partnership 2005 Customer Relationship Management Strategy Customer relationship Manager Sales and Marketing System Forecast Plan Manufacturing And Purchasing ERP System Consensus Forecast

25. Syn Lean and Agile 25 © The Delos Partnership 2005 Get Input From Customer’s Plans Will require understanding of Customers Plans Needs effective Sales Planning Process May be linked into Customer Replenishment Planning Process

26. Syn Lean and Agile 26 © The Delos Partnership 2005 Alignment with Customers Customer Company Customer Now? Future!  Common Language  Their Financial year data  Common measures  Customer Service  Customer Profit  Common logistics Company Customer Common Objectives Common Objectives

27. Syn Lean and Agile 27 © The Delos Partnership 2005 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

28. Syn Lean and Agile 28 © The Delos Partnership 2005 COLLABORATIVE FORECASTING CPR Collaborate Plan Replenish SEAMLESSSEAMLESS CUSTOMER OUR COMPANY Vision Strategy Prioritisation Prioritisation Innovation Innovation Demand Support Supply Supply Vision Strategy Prioritisation Prioritisation Innovation Innovation Demand Support Supply Supply

29. Syn Lean and Agile 29 © The Delos Partnership 2005 Global Supply Chain Planning Extension of make to stock environment Used when geography separates make from sell Allows for visibility in chain to maximise inventory control

30. Syn Lean and Agile 30 © The Delos Partnership 2005 Global Supply Chain Planning Bill of Distribution Same Product Code : Location code needed

31. Syn Lean and Agile 31 © The Delos Partnership 2005 Demand Planning Workshop What needs to be done to create a lean and agile supply chain in terms of Demand Planning ?

32. Syn Lean and Agile 32 © The Delos Partnership 2005 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 LT)  Forecasting module  Sales module

33. Syn Lean and Agile 33 © The Delos Partnership 2005 Forecast Accuracy Report - MAD 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 %

34. Syn Lean and Agile 34 © The Delos Partnership 2005 MRP scheduling Modular design Skill flexibility Mixed model cells Collaborative forecasts Design for postponement Kanban to stock point Mixed model cells Flexible working hours Spare capacity Collaborative forecasts MRP scheduling Modular design Mixed model cells Collaborative forecasts Kanban scheduling Focussed factories Dedicated cells Calculated forecasts High Demand Variability Low Low High Volume Operations / Design impact

35. Syn Lean and Agile 35 © The Delos Partnership 2005 Switzerland Turkey SwitzerlandTaiwan High Demand Variability Low Low Volume High Clusters: Supply chain design

36. Syn Lean and Agile 36 © The Delos Partnership 2005 The Value Chain Co-op/dealer Farmer Food Chain Customer Distribution Customer Distribution Europe Americas Far East Europe Syngenta AI And Form’n Syngenta AI And Form’n Raw Material Transport GOODS CASH Shareholders/Stakeholders INFORMATION HIGH VARIABILITY LOW VOLUME LOW VARIABILITY HIGH VOLUME HIGH VARIABILITY HIGH VOLUME LOW VARIABILITY LOW VOLUME

37. Syn Lean and Agile 37 © The Delos Partnership 2005 Demand Planning 1.Categorise Product Range and Customer Base 2.Determine appropriate stocking/forecasting strategy 3.Forecast at highest level possible 4.Measure accuracy of forecasts to eliminate variation and understand variability