RMD's World Class Enterprise: Supply Chain ... - Summit

[File Name or Event]Emerson Confidential27-Jun-01, Slide 1

[File Name or Event]Emerson Confidential27-Jun-01, Slide 2S&OP in a Configure to OrderEnvironment• S&OP Challenges for EmersonRosemount• Solution– Organization and Process– Oracle Demantra Enabled Linkages• Demand Plan & Budget• Demand Plan & Build Plan• Build Plan & Material Plan• Integrated Supply Chain

[File Name or Event]Emerson Confidential27-Jun-01, Slide 3Emerson At-A-Glance 2010$21 Billion in salesHeadquarters inSt. Louis, Missouri USANYSE: EMRDiversified globalmanufacturerand technology providerApproximately 127,700employees worldwide• Manufacturing and/or sales presence in more than 150 countries• 240 manufacturing locations worldwide• No. 117 on 2010 FORTUNE 500 list of America’s largest corporations• Founded in 1890

Emerson Is a Leader in Its CoreGlobal Businesses & Markets#1 AC & DC Power Systems#1 OEM Embedded Power#1 Precision Cooling Systems#1 Control Valves#1 Measurement Devices#1 Compressors#1 Controls#1 Alternators#1 Fluid Control#1 Ultrasonic Welding#1 Garbage Disposers#1 Appliance Components[File Name or Event]Emerson Confidential27-Jun-01, Slide 4#1 Fractional Motors #1 Storage Solutions #1 Plumbing Tools#1 Wet/Dry Vacuums#1 Pressing Tools/Jaws#1 CCTV Inspection Systems

[File Name or Event]Emerson Confidential27-Jun-01, Slide 5Emerson Divisions & Product BrandsExceeding $20 billion in salesfrom over 60 divisions

[File Name or Event]Emerson Confidential27-Jun-01, Slide 6• Headquartered in Chanhassen, MN– $1.42B sales worldwide in FY10TODAY• Approximately 6,500 employees worldwide and 1,700in the Twin Cities• World Leader in Pressure, Temperature, Level and FlowInstrumentation for the process control industry– Products built on Quality, Reliability and InnovativeTechnologiesPressure Temperature Level Flow

[File Name or Event]Emerson Confidential27-Jun-01, Slide 7Key Industries and Customersover 85,000 end-usercustomers worldwideChemical Dow Chemical Eastman Chemical KodakOil & Gas / Refining ExxonMobil BPPower Duke Energy American ElectricPulp & Paper International Paper Williamette IndustriesFood & Beverage Cargill Anheuser Busch General MillsPharmaceutical Eli Lilly Merck

[File Name or Event]Emerson Confidential27-Jun-01, Slide 8Emerson Process Management Products arein Almost Every Process PlantLevel inDistillationColumnControlSystemTemperatureAcrossColumnValveControllingFlowPressureinVesselFlow inPipeline

Rosemount Measurement17 Manufacturing Sites, footprint=1.3M ft 2•Minnesota, USA•World Wide HQ•Naestvad,Denmark•Chelyabinsk, Russia•Dist. Capabilities•Pressure•Temperature•Level•Wireless•Beijing, China•Eden Prairie, USA•Gothenburg,Sweden•Busan, Korea•Colorado, USA•London, U.K.•Shanghai,China•Texas, USA•Karlstein,Germany•Singapore•Sorocaba, Brazil•Wessling,Germany•Dubai, U.A.E.•Daman, India[File Name or Event]Emerson Confidential27-Jun-01, Slide 9•Manufacturing Strategy/Investment $•Position Distribution Close to Customer•Full Capability in each World Area•Risk Mitigated

Business ChallengesDecentralized & Non FormalS & OPNon-Integration of InfoInconsistent ForecastingLack of Forecast OwnershipIntuitive ForecastingLack of VisibilityNon-Timely ForecastCommunicationNo Bottom Up Forecasting

[File Name or Event]Emerson Confidential27-Jun-01, Slide 11We have a Global Supply Chain toSupport our Global FacilitiesDie Cast HousingMade in MalaysiaSST NameplateMade in MissouriStandard CoverMade in MalaysiaFeature BoardMade in ThailandMeter CoverMade in MalaysiaTerminal BlockMade in ThailandProcess CapMade in MinnesotaMeter GlassMade in IllinoisCableMade in WisconsinLCD ShroudMade in MinnesotaInvestment Cast ModuleMade in Minnesota

Our Complex Product Offerings of Model Family andOptions has been a Challenge to Improve Part Forecast

S&OP in a Configure to OrderEnvironment• S&OP Challenges for EmersonRosemount• Solution– Organization and Process– Oracle Demantra EnabledLinkages• Demand Plan & Budget• Demand Plan & Build Plan• Build Plan & Material Plan• Integrated Supply Chain

S&OP Program at Emerson• Deploy Emerson Level 1 Standards and BestPractices• Product Hierarchy• Location Hierarchy• Time Series ( lowest level)• Conducted Demantra Pilot Project ( 2008)• Rosemount Measurement Division• Global enterprise planning organization• Multi-site mfg with interdependencies• Started with limited number of product families to gainexperience and reduce risk• Oracle applications: Demantra, ASCP and Oracle eBS

Demand Planning and S&OP – Maturity andTechnology RoadmapMaturityLevelsPhase 1 Phase 2 Phase 3 Phase 4Advanced(Optional)TechnologyEnablerMS Excel and Other dataconsolidation toolsDemantra Demand ManagementDemantra Real Time S&OPDemantra AdvForecastingTechnologyDescriptionManualcollection ofdemand andmanually inputto Excel•Dissimilardata formatsMinimumversioncontrol•Multi-sourcecollection andvisibility ofdemand andsupply data•Consolidates datainto Excel orother dataconsolidationtools with versionmanagement•Share drive andemail coordination•Consolidationof demand data•Capability toperform “What ifScenarios”•Integration ERPsystem(s)•Use manualprocess forConsensus FC•ComponentForecasting(Planning BOM)•Collaboration•Use Work flowsfor approvals•Integration ofSupply-data tounderstandsupply impact ofeach plan•Facilitate End-to-End DemandAnalysis•Define KeyBusiness Metrics•Use of Causalfactors,econometrics•Advancedstatisticalanalysis (Ifapplicable)Demantra is introduced during Phase 3 level to build integration ofdemand driven value stream.

Established a Consistent, ActionableConsensus Planning Process: “One Plan”$PlanBudgetUpsideSC PlannersWAMarketingProjectPursuit TeamHistoricalDemandMarketIntelligenceMega ProjectInputDemand Plan($ & Unit)UnitPlanBuild PlanMaterialPlanPlannedOrder(SupplierForecast)Firmed PO(Actual PO)SupplierDemand Plan• Model FamilyVolume & Mix(monthly ModelFamily forecast)Build Plan• WeeklyProductionPlan byProductionLineMaster Scheduling• Mix Percent• Weekly Material Planto support Build Plan(option piece parts)MRP iSupplier Portal• FDS• MOQ• Safety Stock• Default PO LTetc16

We Maintain Robust CommunicationAmong Groups To Close the LoopWeek Week 1 Week Week 2 Week Week 3 Week Week 4GlobeGlobeMarineProcessProductsWorld AreaS&OPReviewWorld AreaDistributionWorldWorldAreaAreaWorldAreaSalesPlanGlobalProductMarketingWorldAreaFactoryBuildPlanF/APrimaryProducerBuildPlan S/AMaterial Plan/Option MixHistoricalHistoricalSalesSalesDataData++ProjectProjectTemplateTemplateInInDemantraDemantraSupplier Plan

S&OP in a Configure to OrderEnvironment• S&OP Challenges for EmersonRosemount• Solution– Organization and Process– Oracle Demantra EnabledLinkages• Demand Plan & Budget• Demand Plan & Build Plan• Build Plan & Material Plan• Integrated Supply Chain

Emerson’s use of VCP to Enable S&OPand Global Demand Planning ProcessesWorld AreaMarketingSupply ChainPlanningInputData links within OracleAutomated Seebeyond linkbase modelforecastAnalyze marketing,financial F/C, andshipping history toget to Materials F/Cat the base modelE-Global Supply ChainData from multiplesourcesDemantraWhat ifAnalysisConsensusForecastConsensusForecastASCPRosemountConsolidatedPlanned OrdersBooking/shipmentHistory &forecastGlobal Data WarehouseAmericas PrimaryProducer/Hub(Oracle)Booking/shipmenthistoryGlobal PrimaryProducers/Hubs(JDE, SAP, Syteline, Jeeves)ConsensusForecast tolegacy MRPsJDE MRPPlanned OrdersPurchasePartForecastVersions forpurchase partforecast

Rosemount Implemented Demantra to ImproveForecast Accuracy and Enable Plan LinkagesHistoricaldataMultiplecausalfactorsSeasonalityCausalAnalysisOutlierDetectionBayesianEstimatorBayesianOptimizerPromotionEventsCombinedmodelTrendCyclicalPatternsForecast• Statistical Forecasting– Bayesian-Markov Mixed Model– Causal Forecasting• Consensus Planning• Linkage Between Demand, Build, &Material Plan– Option Mix is Defined for IndividualModel and Applied to its RespectiveModel Family Growth• EconometricsResults:‣ Result of 5 sites (make up 70% of RMDrevenue) that are supported by Demantra(Global Planning) and IPO (CentralizedBuying):‣ Business declined by 7.6%‣ Raw inventory reduced by 35%‣ Material Fill rate improved by 43%Closed Loop President Led Process20

S&OP in a Configure to OrderEnvironment• S&OP Challenges for EmersonRosemount• Solution– Organization and Process– Oracle Demantra EnabledLinkages• Demand Plan & Budget• Demand Plan & Build Plan• Build Plan & Material Plan• Integrated Supply Chain

Demantra Enabled Global Consensus DemandPlanning, Supported by Statistical ForecastFY08FY09FY10* Includes all Transmitter Models

Demantra Pricing Model AUP Analysis andMaintenance Template: Japan Example

Business Strategy Verified Through LinkedBudget (POR) and S&OPUnit price conversions for each World Areausing Global Data Warehouse (same as Vendavo)

S&OP in a Configure to OrderEnvironment• S&OP Challenges for EmersonRosemount• Solution– Organization and Process– Oracle Demantra EnabledLinkages• Demand Plan & Budget• Demand Plan & Build Plan• Build Plan & Material Plan• Integrated Supply Chain

Demantra then Links The World AreaDemand Plan to Hub Build Plan…1. Demand Plan +/- Intracompanydemands2. Smooth out large buckets of backlog3. Do not plan builds and material forfinished goods

Demand Plans are Linked To ProductionLine (Build) Plans, Incorporating CapacityActual BuildMax CapacityMin CapacityBuild Plan

Hub Build Plans are Linked to PrimaryProduction Build PlansPrimary Producer Plan is TightlyLinked to Hub Plans40%30%Primary ProducerPlan is Independentof the Hub PlansRTC Total WW Supply5%F/AForecastOracle ASCPRTC S&OP15%F/AForecast15%PlannedOrder toRTCWessling S&OPPlannedOrder toRTCWessling MRP SMMC MRP Beijing MRPF/AForecastSMMC S&OPF/AForecastPlannedOrder toRTCBeijing S&OPF/AForecastOracle ASCPRTC S&OPF/AForecastWessling MRP SMMC MRP Beijing MRPWessling S&OPF/AForecastSMMC S&OPF/AForecastBeijing S&OPGlobal SupplyChain PlannerAfter DemantraRTC PlannerWesslingPlannerSMMCPlannerBefore Demantra

S&OP in a Configure to OrderEnvironment• S&OP Challenges for EmersonRosemount• Solution– Organization and Process– Oracle Demantra EnabledLinkages• Demand Plan & Budget• Demand Plan & Build Plan• Build Plan & Material Plan• Integrated Supply Chain

Model Family Options Were Disconnected fromPiece-part Forecast (Without Demantra)Flange MixHistorical UsageHistorical Mix %Forecast based onHighest UsageGrowth Rate225 770 50015% 52% 33%1495 X (1+10%) =2173326 + 1130 + 717=2173DisconnectForecastGrowth Rate50020%110010%75825%3007%3051SC3051C Rev 1 3051C Rev 53095Forecast Mix did not Account forDifferent Model Growth Rates

Option Piece-parts Connected to IndividualModel Family Forecasts (Through Demantra)3051SC3051C Rev 1 3051C Rev 53095DirectConnectModel ForecastGrowth Rate50020%3051SC Flange Mix110010%Rev 1 Flange Mix75825%Rev 5 Flange Mix3007%3095 Flange MixModelFamily Mix %10% 25% 40%20% 45% 10%15% 40% 20%0% 30% 45%Flange Forecast395 + 1038 + 629=2062Forecast Mix Completely Accounts forEach Model Mix Change and Growth Rate

S&OP in a Configure to OrderEnvironment• S&OP Challenges for EmersonRosemount• Solution– Organization and Process– Oracle Demantra EnabledLinkages• Demand Plan & Budget• Demand Plan & Build Plan• Build Plan & Material Plan• Integrated Supply Chain

The Integrated Value Chain is Aligning theOrganization to Drive Customer LoyaltyGame ChangersIn combination the three pillars improve our responsivenessand act as a Demand Driven Supply ChainSupply ChainSynchronization• Sales & Ops Planning• Inv Optimization• 5 day delivery Supply• Advance Quality PlanningDemandManagement• Project Management Office• Part Classification• Customer Demand Expected LTProduct PortfolioManagement• Design For DistributionProductIntegrated Supply Chain Organization DevelopmentVariation Variation VariationGlobalSupply ChainWorld AreaCustomer CareProductCompanies

Aligning Business Processes toTechnology EnablersS&OPDemand ManagementOracle DemantraMaster Scheduleand Resource CapacityPlanningOracle ASCP andGlobal Order PromiseInventoryOptimizationOracle InventoryOptimization and DemantraDaily Level LoadedSchedulingKanBan Planning &ExecutionExecutionOracle ASCP (MRP) andProduction SchedulingOracle KanbanDeveloping long term end vision with technology roadmaps with businessprocess standards and deployment phases34