CONCURRENT DIGITALIZED VALUE CHAIN · ¾Gartner Top 25 2016: “For the majority of its products,...

EFESO © 2018 I Confidential

CONCURRENT DIGITALIZED VALUE CHAIN END TO END SYNCHRONIZATION PROGRESSION MODEL

Berlin , 26th -28th November 2018

2EFESO © 2018 I Confidential

THE MAGIC WORD

“CONCURRENTLY!!”


Eitel MonacoInternational Expert Manufacturing and E2E Value Chain

Eitel Monaco is Senior Vice President at EFESO and an international expert in Manufacturing and End to End Value Chain.

33 years at Procter & Gamble. Last assignment: North America Supply Chain Vice President, responsible for all Operations and Assets from manufacturing to customer service: 30bn$ business; 20,000 people; 10 categories.

Specialities:

E2E Supply Chain Synchronization

Planning Systems and Digital Innovation

Supply Chain as a Sales Tool

Manufacturing: TPM and HPWS

Eitel is Italian; he graduated from University of Rome with a Masters in Mechanical Engineering. He currently works and lives with his family in Geneva, Switzerland


Gartner Top 25 Supply ChainsMaster Class Award


Gartner Top 25 Supply ChainsP&G Master Class Award Motivations

¾Gartner Top 25 2017: “P&G continues to innovate through digital automation of workflows, and the use of algorithm-driven tools to enable end to end planning”

¾Gartner Top 25 2016: “For the majority of its products, P&G is running an end-to-end synchronization program. Every part of the supply chain operates based on the daily cadence of consumption, in some cases triggered by demand at the shelf”

¾Gartner Top 25 2015: “P&G was one of the first to characterize and embed the concept of a consumer/customer-driven supply chain”

CUSTOMER’S SURVEY


FMCG Industry Trends

The E2E Synchronized Supply Chain will SOURCE, PRODUCE and SHIP daily what the Customer require, and FLOW it seamlessly through the network

YEARS:

INDUSTRY:

P&G:

TPMTQA Real Time

QA PR/IWS E2E Sync

90’s - Efficiency80’s - Quality 2000 - Time


Customersand

ConsumersSuppliers Source Make Deliver

Plan

Technology Development

Product Development

Supply Chain

Inno

vatio

n C

hain

Level 1Factory Operational

Excellence

Level 2Integrated

Supply Chain

Level 3Extended

Value Chain

Traditional Supply Chain Model


VALUE NETWORK

RestoredStandards Defined,

Foundations ensured

LEVEL 1

Real Time NetworkSales growth and value creation in interconnected

network

LEVEL 5

DESIGN & PORTFOLIO PLANNING SUPPLIER & SOURCE MAKE DELIVERY SALES & CUSTOMER

SILOS

E2E Integrated &Synchronized VC

End to End Integration based on Customer

Demand Pull

LEVEL 4

ResponsiveFlexibility and Speed

Agile, Simplified,Effective

LEVEL 3

In-ControlStandards Adherence

Performing to Standard

LEVEL 2

Cos

ts X

Cas

h X

Rev

enue

sC

osts

, Cas

h, R

even

ues

SUPPLY CHAIN

Business NeedMargin/Cash/Sales

CO

NC

UR

REN

TPR

OG

RES

SIO

N

Concurrent Digitalized Value Chain - The CDVC model

REAL TIME NETWORKSALES/VALUE BOOST WITH LATEST DIGITAL TOOLS

RESTOREDSTANDARDS ARE DEFINED E2E

IN CONTROLSTANDARDS ARE FOLLOWED E2E

E2E INTEGRATED & SYNCHRONIZEDE2E INVOLVEMENT OF SUPPLIERS/CUSTOMERS

RESPONSIVESTANDARDS ARE IMPROVED E2E TO INCREASE AGILITY


VALUE NETWORK


Foundations ensured

LEVEL 1


network

LEVEL 5


SILOS



Demand Pull

LEVEL 4



LEVEL 3



LEVEL 2

Cos

ts X

Cas

h X

Rev

enue

sC

osts

, Cas

h, R

even

ues

SUPPLY CHAIN


CO

NC

UR

REN

TPR

OG

RES

SIO

N

Concurrent Digitalized Value Chain - The CDVC model

REAL TIME NETWORKSALES/VALUE BOOST WITH LATEST DIGITAL TOOLS

RESTOREDSTANDARDS ARE DEFINED E2E

STANDARDS ARE FOLLOWED E2E

E2E INTEGRATED & SYNCHRONIZEDEND TO END INVOLVEMENT OF SUPPLIERS/CUSTOMERS

RESPONSIVESTANDARDS ARE IMPROVED END TO END TO INCREASE AGILITY

60% OF THE TOTAL LOSSES HAPPEN BETWEEN SILOS


TOP 10 GOLDEN TRICKSIn common on most successfully synchronized companies

BENCHMARK: KNOW YOUR STARTING POINT5

EXPAND TPM/OPEX INTO E2E AGILITY4

E2E PCS3

3 LEGS 2

E2E CONCURRENTLY: Include SALES!!!1


From a few spots of Excellence… … to an E2E Concurrent Program

Human DynamicsDigital ToolsProcess

One E2E concurrent program

CUSTOMERSERVICE

PLANNING

MAKE

SOURCING

LOGISTIC

SALES





E2E PCS3

3 LEGS 2



+ONE INTEGRATED

PROGRAMME

3 Legs for E2E synchronization

+

PROCESSES

DIGITAL TOOLS

PEOPLE


Self Driving Supply Chain - The Vision

“The Supply Chain of the future will have only two employees: a man and a dog.

The man will be there to feed the dog.

The dog will be there to keep the man from touching the planning system.”Alessandro de Luca, CIO Merck, November 2018

(inspired by Warren Bennis, 1991)


Concurrent Digitalized Value Chain - CDVCDigital Architecture to support CDVC Processes

¾ Artificial Intelligence – Closed Loop¾ Deep Learning¾ Intelligent Decision Making

THE PLATINUM LEVEL - SELF DRIVING SUPPLY CHAIN

CO

NC

UR

REN

TPR

OG

RES

SIO

N

LEVEL 5

DIG

ITAL

TO

OLS

PR

OG

RES

SIO

N

LEVEL 4

LEVEL 1

LEVEL 2

LEVEL 3

¾ Advanced Analytics Forecast¾ Machine Learning¾ Demand Sensing

FORWARD LOOKING - PREDICTIVE

¾ AI driven prescription¾ Reinforcement Learning¾ Operationalised Supply

DETERMINISTIC - PRESCRIPTIVE

¾ End2End visibility¾ ONE Number Concept¾ One source of Truth

REAL TIME - INTEGRATED

¾ Operations Digital Maturity Baselining¾ Product, Info Flow Mapping¾ SC Decisional Tree Mapping

BASELINING AND PREPARATION

Sales growth and value creation in interconnected network

REAL TIME NETWORK

End to End Integration based onCustomer Demand Pull

E2E INTEGRATED & SYNCHRONISED VC

Standards Defined, Foundations ensured

RESTORED

Standards Adherence Performing to Standard

IN CONTROL

Flexibility and Speed Agile, Simplified,Effective

RESPONSIVE


80% of Supply Chain initiatives fail becouse of people issues...

New Research launched Dec 2015 delivered by a joint HD-SC team


Leadership & BehaviourFramework

Leadership Behaviour

Leadership Value

Organising for ChangeAlignment to Business StrategyEngage and InspireInfluencing SkillsStrategic ThinkingGlobal /Holistic Thinking

Building TrustBuilding CommitmentClear Power Distribution

Innovative Towards the FutureFocus on Facts and DataFocus on CustomerRational Values

Act on Short Term WinsCommitment to GoalsAchievement Values

Building TrustShared LeadershipAffiliation ValuesGroup Values

Interpersonal RelationshipsEmpowering EmployeesDevelopment Values





E2E PCS3

3 LEGS 2



Strategy Deployment

BusinessGoals

BusinessResults

Performance Control Systems (PCS) applies across the E2E Supply Chain

Supply Chain Segmentation

Mission & Vision

Result plans

KPI targets

1

Loss paretos

2

3

Kaizen /Improvement

teams

4

5Standards

6Process control

Shift meeting

78Daily meeting

9Weekly meeting

10

Actions

11Review

Daily control to minimize deviations

The Daily control

Stepwise continuous improvements

Execution Defect Deployments

Service Level Performance

Standards & Policy

Performance Behaviour &

Control (PDCA)STANDARDS





E2E PCS3

3 LEGS 2



Include KPI’s on Agility/Responsiveness

MANUFACTURING SYNC:¾ % Volume in daily planning¾ % Volume produced on PTD (replenish buffer)¾ % Volume produced on PTO (volume produces

based on an actual order)¾ % Reduction in DBNR/Cycle Time/MOQ¾ % Schedule Adherence¾ % SKU within inventory limits

CUSTOMER SYNC:¾ % XDOC to Stores¾ % Positive STVR (Short Term Volume Request)¾ Order LeadTime¾ Late Stage Differentiation¾ Total Inventory including Retail DC¾ VSM (Value Stream Mapping) with top retailers

LOGISTIC SYNC:¾ % Volume internal XDOC¾ Retail Delivery Frequency¾ DRP frequency¾ % No orders/IR¾ Total SC Reaction Time

SUPPLIERS SYNC:¾ SRM/SJBP¾ VSM with top 5 suppliers¾ E2E Loss Elimination

HUMAN DYNAMIC:¾ % Leaders trained as E2E Leaders





E2E PCS3

3 LEGS 2



VALUE NETWORK


Foundations ensured

LEVEL 1


network

LEVEL 5


SILOS



Demand Pull

LEVEL 4



LEVEL 3



LEVEL 2

Cos

ts X

Cas

h X

Rev

enue

sC

osts

, Cas

h, R

even

ues

SUPPLY CHAIN


CO

NC

UR

REN

TPR

OG

RES

SIO

N

Concurrent Progression in Value Chain - CDVCAssessment and Target Setting

CompanyTargeted

Level

CompanyAssessed

Level

CompanyAssessed

Level

CompanyAssessed

LevelCompanyAssessed

Level

CompanyTargeted

Level

CompanyTargeted

Level

CompanyTargeted

Level

CompanyTargeted

LevelCompanyTargeted

Level

CompanyAssessed

Level

CompanyAssessed

Level


CDVC - Last 10 Companies Assessment Map


Foundations ensured

LEVEL 1


network

LEVEL 5




Demand Pull

LEVEL 4



LEVEL 3



LEVEL 2

Cos

ts X

Cas

h X

Rev

enue

sC

osts

, Cas

h, R

even

ues


CO

NC

UR

REN

TPR

OG

RES

SIO

N

1

1

1 11

3

3

3

33

4

4

4

4

5

5

5

5

5

5

6

6

6

6

66

7

7

7

7

7

7

9

9

9

999

10

10

10

10

10

108

8

8

8

8

2

2

2

22

2

SILOS

SUPPLY CHAIN

VALUE NETWORK

1


Each CDVC section is assessed according to 4 key dimensions

SUPPLY CHAIN

VALUE NETWORK

SILOS

ProcessMethod

Process standards known , followed and in

control

2+ Process aligned across organizations,

enabling Flexibility and Agility

3+ Process Aligned E2E including external partners, enabling

synchronization and Value Creation

4+ Process are designed for network and enable

Real Time actions/reactions

Process standards known and partially

followed

Practice Enablers

and DigitalSystems

Basic Enablers and Digital tools in place

Best Enablers and Digital tools in place to

match changing business needs

Adoption of latest E2E thinking, latest Digital

tools in place integrated with

Customers/Suppliers

Expert user and developer, tools reapplied from

customers/suppliers, joint SC and Sales Real

Time tools

Absence of Basic Enablers and digital tools

in place

PeopleDynamics

Roles and skills known, training in place to close

gaps

2+ Skills actively managed, skills aligned

across organizations

3+ Skill gaps monitored, closed autonomously,

HP Teams, cross functional, full

involvement of external partners in gap definition

4+ Advanced knowledge management, including

Sales Fundamentalsfor non Sales People

There is a gap in roles and skills known,

training

Performance Metrics

Performance indicator defined, measured and in

control, supporting strategy

Performance indicators segmented, aligned

across organizations and linked to strategy

Performance Indicators aligned E2E including external partners, and enabling E2E overall

optimization

PIs including Sales automatically aligned across Organizations

E2E, with common network

objectives/targets

Performance indicator defined and measured

poorly

-

+


Foundations ensured

LEVEL 1


network

LEVEL 5



Demand Pull

LEVEL 4



LEVEL 3



LEVEL 2

Cos

ts X

Cas

h X

Rev

enue

sC

osts

, Cas

h, R

even

ues

CO

NC

UR

REN

TPR

OG

RES

SIO

N



VALUE CHAIN DIGITAL MATURITY ASSESSMENT


Scope &Vision

Human Dynamic journey within the CDVC frameworkHow the People are behaving at different levels of the maturity matrix

Internalshort-term

Internallong-term

ExternalMid-term

ExternalSynchronized

Future

InnovativeHolisticFuture

CollaborationDecision-making

Agility

Internal collaborations

Internal E2Ecollaborations

External E2Ecollaborations

Eco-systemcollaborations

Low levels of collaborations

SolidGradual

Re-active

CoherentResponsive

IntelligiblePro-active

High velocitySynergetic

ScatteredGradual

Re-active

SiloStatic

Division inter-dependence

Agile way of working

Synchronized

Real TimeIntegrated


THE MAGIC WORD

“CONCURRENTLY!!”



...10

...9

...8

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E2E PCS3

3 LEGS 2


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CONCURRENT DIGITALIZED VALUE CHAIN · ¾Gartner Top 25 2016: “For the majority of its products,...

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