Dirk Winkelhage - Supply Chain Council
Dirk Winkelhage - Supply Chain Council
Dirk Winkelhage - Supply Chain Council
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<strong>Supply</strong> <strong>Chain</strong> World EuropeMadrid, Spain21-23 October 2012© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 1 | 15 October 2012
<strong>Dirk</strong> <strong>Winkelhage</strong> VP Group Logistics & SC GovernanceWILO’S INTEGRATIVE STEPS IN SUPPLYCHAIN EVOLUTION TOWARDS A HIGHERMATURITY LEVEL© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 2 | 15 October 2012
Personal Profile<strong>Dirk</strong> <strong>Winkelhage</strong>Vice PresidentGroup Logistics & <strong>Supply</strong> <strong>Chain</strong> GovernanceMarried, three kids, 47 years old, living in GermanyDual Degree in Mechanical and Industrial Engineering20 years of international work experience in Logistics & Controllingin the mechanical engineering industrySAP consultancy for logistic, production and demand planning© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 3 | 15 October 2012
AgendaWILOGroupWILOP2GWILONextSteps© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 4 | 15 October 2012
WILO Business SituationWILO SE is one of the leading manufacturers of pumpsand pump systems for heating, cooling and air-conditioningtechnology, for water supply and sewage and drainage inthe market segments:Building ServicesWater ManagementIndustry.© 20125by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 5 | 15 October 2012
WILO - Business Situation WILO was founded in 1872 Is active on all five continents More than 6.700 employees 1.300 Suppliers 500 Mio€ purchase Volume 30.000 Finished Product Fifteen Production Sides Fifty Sales Subsidiaries 30.000 CustomerTurnover within Regions (Mio. EUR )2011 2010 Change %Europe 578,0 571,5 1,1Asia Pacific 226,2 214,0 5,7EMEA 168,7 141,6 19,1Others 97,6 94,3 3,5Total 1.070,5 1.021,4 4,8© 20126by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 6 | 15 October 2012
AgendaWILOGroupWILOP2GWILONextSteps© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 7 | 15 October 2012
What is <strong>Supply</strong> <strong>Chain</strong> Management at Wilo?PlanSourceMakeDeliverReturnSCOR ® Model - SC <strong>Council</strong><strong>Supply</strong> <strong>Chain</strong> Management means the company-wide steering and responsibility of materialand information flows along the entire value chain. Starting from the customers forecast,the order of the customer, via order management etc., sourcing, procurement, via allproduction steps, up to the delivery of the final product to the customer.© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 8 | 15 October 2012
Motivation to act on new supply chain processes Inhomogeneous purchasing landscape Planning process loosely integrated with poor visibility No control on in & outbound flows Numerous late deliveries and order changes Communication gaps between production and sales Bullwhip effects along the supply chain In transparent stock levels© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 10 | 15 October 2012
Overview Key Initiative <strong>Supply</strong> <strong>Chain</strong> PerformanceP2G Key Initiative “<strong>Supply</strong> <strong>Chain</strong> Performance”r fo r Source m a n c e ”Make K e y Plan I n i ti a ti v e “Su p Deliver p l y C h a i n PeKPIC o m m o d i tyGroupMa n a g e m e n tSu p p l y C h a i nSe g m e n tsSu p p l y C h a i nPl a n n i n g &GovernanceD i s tr i b u ti o nO p ti m i za ti o nSu p p l y C h a i nPe r fo r m a n c eMe a s u r e m e n tC o mmo d i t yG ro u p sPu rch a si n gO rg a n i za t i o nSc h e d u l e dO n -Sto c kOrderedC u s to m i ze dDesignedD e ma n d &Su p p l yMa n a g e me n tSa l e s &O p e ra t i o n sPl a n n i n gL o ca lI n ve n t o ryInboundL o g i st i csOutboundL o g i st i csPe rf o rma n ceMe a su re me n t© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 11 | 15 October 2012
Main stocking levels of the WILO <strong>Supply</strong> <strong>Chain</strong> ModelsScheduled On-StockOrdered Customized DesignedRaw Material, Partsand Components(RM/P/C)JITReplenishmentSingle OrdersSingle OrdersSingle OrdersSub AssembliesJITReplenishmentSingle OrdersSingle OrdersSingle OrdersFinished GoodsCentral WarehouseJITReplenishmentSingleOrdersSingleOrdersSingleOrdersFinished GoodsSales SubDirectdeliveryJITReplenishmentReplen.SingleOrdersSingleOrdersSingleOrdersSequenced Defined ResidualMain stockinglevel© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 13 | 15 October 2012
S&OP - Motivation to act Decoupled plans in Sales and Operations Different levels of aggregations Various intervals of planning Maturity in planning processes and system use vary Lack of trust in sales estimation and missing market information Communication often on „ad hoc“ basis Non-transparent stock levels and inventory targets© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 14 | 15 October 2012
Planning horizon<strong>Supply</strong> <strong>Chain</strong> Planning Levels (WILO 2009)3+yearsLong-term PlanningBusiness Planning› Budget› ForecastThere was a missing link between realcustomer demands and tacticalplanning.Operations was planning purely based onstatistics without market information.Sales & Operations Planning› Sales Quantity PlanningTactical Planning› Purchasing controlling› Material requirement planning› Order managementweekly/dailyScheduling› Production› Transportation› Short-term capacityDegree of detailing© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 15 | 15 October 2012
Group Demand & <strong>Supply</strong> and S&OP (WILO 2012)S&OP is a common sense and accepted process It follows a monthly planning review cycle It facilitates the integration of plans forboth customer expectations and internal operations It supports top-management decision making andannual business planningClear responsibilities and role profilesDemand&<strong>Supply</strong>OperationsSales It fosters accuracy, process accountability, lessons learned,and future risk management© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 16 | 15 October 2012
The supply chain complexity is mainly handledin the monthly Plan process – Top Plan viewIdentify, Assess and Aggregate<strong>Supply</strong> <strong>Chain</strong> ResourcesIdentify, Prioritize and Aggregate<strong>Supply</strong> <strong>Chain</strong> Requirements<strong>Supply</strong> PlanningBalance <strong>Supply</strong> <strong>Chain</strong>Resources and RequirementsDemandPlanningCapa & <strong>Supply</strong>ProvisionS&OPPlanningDemand &<strong>Supply</strong>ConsumptionProductionManagementOrderManagementEstablish and Communicate<strong>Supply</strong> <strong>Chain</strong> PlansEstablish and Communicate<strong>Supply</strong> <strong>Chain</strong> Plans© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 17 | 15 October 2012
Multidimensional Planning ApproachDimension Planning levels ExampleCompanyCompany-CodePlantWILO SEPompesSalmsonWILOHungaryWILO NLWILORussiaProductBrandDivisionPBUProduct FamilyProduct GroupPlanning GroupProductWILO Salmson EMB M&P CPLLi Com CircStdLi Com CircEC commuCom CircECcommunMulti VertFixed SpMixers 2-Stage GearSales Region /Sales AreaSales Region /Sales AreaDACH/D DACH/A DACH/CH EU+/FBNL EMEA/AfricaTimeYearMonthNov. 2011 Dec. 2011 Jan. 2012 Feb. 2012 Mar. 2012PlanningmethodClassificationPr. GroupmanualplannedPr. Groupexc. basedplannedPr. GroupautomicalplannedProductmanualplannedProductexc. basedplanned© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 18 | 15 October 2012
S&OP Information flow and visibilityDemand Planning<strong>Supply</strong> Network PlanningSource<strong>Supply</strong>CapacityProductionOrdersInventoryThebalancing actActualOrdersDemandDemandPlanningInput:Output: Historical sales quantitiesfrom Group MarginReporting Statistical forecastcalculation Market intelligence Sales Plan (input for<strong>Supply</strong> Network Planning)Input:Output:From Demand Planning: Sales PlanFrom ERP systems (SAP, Navision): Stock information Open sales orders Production plan Replenishment parameters Transit times „Netted“ Sales Plan (input forMRP in SAP ERP) Feasibility check of sales planagainst production planSAP-SCMSAP-SCM© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 19 | 15 October 2012
Demand Planning in SAP-SCMHistory CorrectionCreation of Statistical Forecast© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 20 | 15 October 2012
Demand Planning in SAP-SCM© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 21 | 15 October 2012
<strong>Supply</strong> Network Planning in SAP-SCM© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 22 | 15 October 2012
The Benefits Reduced instability in inventory levels due to improved forecast accuracy Improved planning accuracy due to integration with production scheduling Improved order fulfillment and customer service Visualization in alert monitor and planning book Improved raw material forecasting for suppliers Production plan based on real constrains and market information Optimized safety stock levels based on service levels and profit objectives© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 23 | 15 October 2012
Success Factors Stable R3 needed before building up S&OP Migration of sales history from various EDP systems is very complex,R3 data must be correct Automated master data interfaces Allocate business resources early in the project Full realization takes up to 3 years, so be patient! Use highly experienced consultancies with personal reference for support Calculate consulting support also after going life© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 24 | 15 October 2012
<strong>Supply</strong> <strong>Chain</strong> Metrics – KPIs“Measurement is the first step that leads to controland eventually to improvement.If you can’t measure something, you can’t understand it.If you can’t understand it, you can’t control it.If you can’t control it, you can’t improve it.”*© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 25 | 15 October 2012* by Dr. H. James Harrington* Dr. H. James Harrington
SCOR <strong>Supply</strong> <strong>Chain</strong> Metrics – KPIsReliabilityL1 Perfect Order Fulfillment % of ordered delivered in full Delivery performanceto customer Documentation accuracy Perfect condition Forecast AccuracyResponsivenessL1 Order Fulfillment Cycle Time Source cycle time Make cycle time Deliver cycle timeDelivery item accuracyDelivery quality accuracyCustomer date achievementDelivery location accuracyFlexibility/AgilityUpside/Downside<strong>Supply</strong> <strong>Chain</strong> FlexibilityNumber of days required to achieve anunplanned sustainable x% increase(decrease) in quantities delivered-Downside with no cost andinventory impactAssetsL1 Cash-to-Cash Cycle Time Inventory days of supply + Days sales outstanding % Days Payable outstandingCostsL1 Total <strong>Supply</strong> <strong>Chain</strong> Management Costs (TSCMC) Cost to Plan+Source+Make(COGS)+Deliver+Return- to Source- to Make- to Deliver- to Return© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 26 | 15 October 2012
Forecast Accuracy / Days of <strong>Supply</strong>9530© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 27 | 15 October 2012
AgendaWILOGroupWILOP2GWILONextSteps© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 28 | 15 October 2012
The project “<strong>Supply</strong> <strong>Chain</strong> Performance” within the P2GKey Initiative reflect the end-to-end transformation approach© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 29 | 15 October 2012
ActivitiesMaturity LevelWilo <strong>Supply</strong> <strong>Chain</strong> - End-to-End collaborative„Demand Driven <strong>Supply</strong> <strong>Chain</strong>“LEADING EDGECOMPETITIVEPARITYLAGGINGFocusFunctionalFocusInternalIntegrationExternalIntegrationE2E – Value <strong>Chain</strong>IntegrationCross EnterpriseCollaboration• Discrete <strong>Supply</strong> <strong>Chain</strong>processes and data flowswell documented andunderstood• Resources managed atdepartment level andperformance measuredat the functional level• Company-wide processand data model continuouslymeasured and managedat the company,process and diagnosticlevels• Resources managed atboth functional and crossfunctionallevels• Stable standard processes,methods & tools• HR-Development, Talent-Management• Elimination of bottlenecks,increasing flexibility, agility• Strategic partners (suppliers/customers) throughout theglobal <strong>Supply</strong> <strong>Chain</strong> to collaborateto:- identify joint businessobjectives and action plans- enforce common processesand data sharing- define, monitor, and reactto performance metrics• Risk management•„Green SCM“• Integrated IT (e-business)systems and solutions enable acolloaborative <strong>Supply</strong> <strong>Chain</strong>strategy that:- aligns participating companies‘business objectives andassociated processes- results in real-time planning,decision making, and executionof supply chain responses tocustomer requirements© 2012 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 30 | 15 October 2012
<strong>Supply</strong> <strong>Chain</strong> Excellence RoadmapStrategic vision and “North-Star”- Wilo Demand Driven <strong>Supply</strong> <strong>Chain</strong> (DDSC)Positioning of the <strong>Supply</strong> <strong>Chain</strong> EvolutionFrom Informal Organization to value chain integrationDefinition of performance attributes forGovernance, Logistics, Purchasing and Demand & <strong>Supply</strong>Prioritization of performance attributes,Definition of Complexity, Benefit & EffortRoadmap to “Excellence”Action plans and targets per year© 20123by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 31 | 15 October 20121
<strong>Supply</strong> <strong>Chain</strong> Rope at WILODo not be afraid to start somethingnew, remember the titanic was buildby experts, Noah’s ark bya non-professional .*© 2012 32 by WILO SE <strong>Dirk</strong>. <strong>Winkelhage</strong> ALL RIGHTS RESERVED. | Slide 32 | 15 October 2012* Arno Backhaus (*1950) German Christian Songwriter