Intro to Control Tower

8/22/2019 Intro to Control Tower

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COPYRIGHT 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED.

ALCATEL-LUCENT INTERNAL PROPRIETARY USE PURSUANT TO COMPANY INSTRUCTION


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Before we get started, please have a quick look at the controls of this web-based training. The

*side panel allows you to see the outline, *view the voice-over script, or *search for a topic. The*control bar along the bottom allows you to play or pause, *go to next or previous page,indicates *current page and total number of pages and shows *the course status. You will alsosee *audio length by minute and seconds, and a *volume control. In addition, the *panels canbe minimized. *Attachments can be accessed from here.

When you are ready, select the Next page button to continue.


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Upon completion of this course, you should be able to:

*Understand the importance and benefits of Control Tower for Alcatel-Lucent and the SupplyChain environment

*Know The goal of the blueprint phase

*Understand what is changing - from the way we do business today to the future environment,and finally

*Understand the High level view of Control Tower capabilities


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The need for Control Tower came about because our end-to-end supply chain environment hasnot been performing in a way that meets our customers needs or supports our financial

requirements as a normal company. Alcatel-Lucents supply chain is significantlyunderperforming compared to our industry competitors.

Instead of the process and tools enabling better performance, it was often the blocking point forour performance. The tools and processes are holding people back from doing a better jobdespite their best efforts.

*The numbers shown here are roughly right but it gives you an idea of what needs to change.

We need to dramatically improve the cycle time of all our supply chain processes, resulting inshorter lead times for our customers: we need to move from an Order Fulfillment Lead Time thatis typically 40 days to a capability of delivery in 10 days.

We must dramatically improve our delivery performance to the customers requested date. Weneed to be able to quickly tell our customer yes, we can deliver it on this date and keep thatpromise. And finally we need to increase our inventory turns we need to increase the velocityof cash going through our company and become more efficient and cash flow positive.

For our customers this Control Tower project is important to them because we believe this will bethe primary change we make that enables shorter cycle times. This will eliminate the need to askour customers to tell us a year in advance what they are going to buy, we will be able to beresponsive to our customers and keep our promises.

That is what this project is all about providing our employees with simpler and a more effectiveprocess as well as simpler and a more sufficient set of tools for them to do a better job anddeliver a higher level of performance.


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*The Control Tower program includes in its scope all people, processes and tools involved in the

planning and management of Alcatel-Lucents end-to-end supply chain.*Spanning the end-to-end supply chain, from raw material component suppliers to our finishedgoods management. When the implementation roll-out is complete, all product divisions, allproducts, and all regions will be supported.

*Control Tower is re-engineering the current environment to take us to the required levels ofsupply chain performance .


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In September 2011, a core team was created to design a blueprint that the company could begin

to build upon in the beginning of 2012.Basically, the blueprint is a drawing to build a plan to best create a new supply chain environmentincluding, when is the best time to deploy to bring value creation for Alcatel-Lucent.

This blueprint phase brought together talent from Alcatel-Lucent, Celestica and some softwarevendors (such as Rapid Response and E2Open) to discuss how this will work, how much it willcost and how it will improve our performance in 2012.

The key deliverable of the blueprint phase is the Conceptual Design. The Conceptual Designexplains what capabilities will be enabled by the Control Tower.This includes documenting whatactivities will be performed by what roles and using information to achieve business goals.

*The concept of Control Tower Conceptual Design will be explained in upcoming training modules.


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The purpose of Control Tower is maintaining proper inventory and delivering it correctly to the customer as needed. It will have an immediate Additionally, it will affect delivery performance and our ability to commit. We will have a leaner Supply Chain with better visibility and efficiency

Control Tower accomplishes this, with two of the key changes targeting impacts being:

End-to-end visibility of the supply situation in our supply chain network, everything from raw materials to finished goods is refreshed daily.Supply chain planning and management tools analyze data with short cycle times, enabling just-in-time planning and monitoring of the supply/d

Leveraging these two key capabilities, supply chain planners and managers will work with up-to-date data and have the ability to respond quickl

Delivering on our commitments requires use of a demand supply balancing cycle. Historically, data collection began the Friday of the first weekafter collection. Control Tower intends to retrieve data on a daily basis, or more than once a day when necessary to perform demand/supply p

The current planning system in place covers only SLIs which are (Single Logistical Items). It stops at the finished goods level and it's weaknewhere we suffered most during the Tsumani in Japan. Control Tower will extend the current planning system from a finished goods level to enwill provide the desired results.

Our current planning system only covers major items. To deliver a proper solution, we also need to include installation related materials, OEM frequency of purchase, as well as various planning systems and teams attempting to compile data. The goal of Control Tower is to determine cservice for our internal project management community; and finally form a commitment. Traditionally, Alcatel-Lucent has not used statistics to inventory visibility.

Visibity. We are often stuck with e-mailing and phone calling to gather information. Control Tower creates end-to-end visibility across the entirthat requires feedback to determine current happenings and improvements needed. Clear and accurate reporting and valid business intelligenc

Today, we have a lot of people building a lot of excel reports and trying to figure out what is going on in order to make informed business decisto build automated reports enabling people to be more focused on planning.


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This slide and the next slide depict key changes from the way we do business today to how we

will do business when Control Tower is deployed.Each of the following areas will be discussed in further detail in the remaining courses:

Two of the four areas are Demand & Inventory Planning and Supply Demand Balancing.


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These other two areas will be discussed in further detail:

*Sourcing & Supplier Collaboration, and *Technical Architecture and Data

As you can see from these two slides many of the new processes and tools being introducedeither dont exist today or have been used in a limited capacity.


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Statistical forecasting is limited in todays supply chain planning activities.

*Our intention to use Statistical Forecasting to provide a baseline, or starting point, forecast thatcan be enhanced with additional customer and market knowledge. This will be managed in theregional team.

Spending less time manually building the forecast each month, thus spending more time onunderstanding the potential demands of critical customers and their programs.

We intend for the baseline statistical forecast to project demands out for 15 months closing a gapwe currently have where customers visibility to their future needs is limited. This extendedvisibility is much needed to support our long term component capacity and price managementactivities.

*The concept of Statistical Forecasting will be explained in the upcoming training module focusedon our end-to-end Demand Planning and Sales and Operating Planning process.


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Todays planning processes are built around Monthly and Weekly activities, often using data that

has aged.*While some milestone activities will still be executed once per month, the planning activity willbecome more continuous, acted on each day with refreshed data and alerts to events in thesupply and demand situation.

The latest supply snapshot will be pegged to the current view of customer demands on a dailybasis, with two way communications between the Control Tower and the regional ordermanagement / project management teams. The Control Tower will see any adjustments made tocustomer sales orders by the regions, and the Control Tower will inform the regions of anychanges to the projected availability of material for delivery.

*These changes will be discussed in the training module focused on the Demand / SupplyBalancing capabilities of the Control Tower.


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Todays planning processes are focused on the Single Logistical Items that are delivered to our

customers. We make assumptions about our capabilities to supply those SLIs in the monthlyplanning cycle, because several iterations of cascaded MRP evaluations in the supply nodes(spanning several weeks) are required to determine whether there are any constraints in thesupply of lower level assemblies or components.

We also do not provide a concise, complete set of information to our component suppliers, or ourcommodity and supplier management teams. Their visibility to our long-term supply requirementsis limited, making it difficult for us to secure supply particularly for longer lead time items.

*In the Control Tower, we will provide visibility to demands at all levels of the product via acentralized explosion of the bills of material. Besides giving better visibility to our suppliers andcommodity teams, this also allows the Control Tower to quickly assess the feasibility of demandplans, considering supply and capacity constraints at any level.

*These capabilities will be discussed in the Critical Component Management, and DemandPlanning modules of this training.


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Todays supply chain planning is built around a push model, whereby forecasted demands at

higher levels of the supply chain are cascaded to lower levels. This can result in inflated levels ofinventory and a supply chain that is slow to respond to changes in demand.

*With the Control Tower deployment we will be greatly increasing our use of pull replenishmenttechniques for inventory management. Using inventory optimization tools that considerparameters including our targeted on-time customer delivery performance, the forecasteddemand and historical demand variation, and the level of inventory we can afford, we willdetermine the proper locations and sizes of inventory buffers from finished goods to rawmaterials.

In the pull replenishment mode, inventory is replenished only when it has been consumed by ahard demand. For example, finished goods will only be replenished by their suppliers when theyhave been pulled from the warehouse to fulfill a customer sales order.

*The concept of ofa pull replenishment will be discussed in the Inventory Optimization module ofthis training program.


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Currently, the centralized demand and supply planning processes have limited visibility, lacking

information regarding the supply / demand situation in supply nodes below the finished goodslevel.

The supply node information is managed on a node by node basis, making it very challenging topiece together an end to end view for any product.

*In the Control Tower, we will be modeling the end-to-end supply chain for each product,showing the buy/sell relationships between each of the supply nodes involved. Supply andDemand information will be pulled from each of those nodes on a daily basis and made availablein the Control Tower platforms.

*End-to-End visibility is a key concept of Control Tower, elements of this will be discussed inseveral of the following training modules.


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Control Tower is being developed in parallel with changes to our physical supply chain network

and our operating model.Outsourcing and consolidation of some of our manufacturing locations, we are evolving towardsa regional campus model for our manufacturing, integration and distribution activities.

In partnership with the Control Tower, the sizing and position of inventory in planned buffers willbe optimized, balancing our customer delivery requirements with our cash flow and affordabilityobjectives. These buffers will be managed in a pull replenishment model. To minimize theworking capital impacts of these buffers, Vendor Managed Inventory arrangements will be usedas much as possible.

In line with the pull replenishment strategy, we will use the Configure-to-Order fulfillment modelas much as possible. In CTO, inventory is buffered just before the point where it must becustomized per customer order requirements, and then it is pulled from those buffers only when

needed to fulfill a customer order.


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To summarize

- Control Tower will become the central point for end-to-end supply chain visibility, planning, andmanagement, utilizing daily updates of snapshots from all nodes in our supply chain network.

- Control Tower will direct the sizing of the buffers managed in each supply node, as well asdirecting order fulfillment activities based on the supply / demand situation and priorities.

- Control Tower will interact with regional Project Management and Order Management activitiesvia the ERP systems which remain our systems of record for all Customer Sales Order information.


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Good job! You succeeded in attending this course. Its a great start.

Now lets go to the next step: A short quiz to confirm your newly acquired knowledge. Click on the Next button to start the quiz!


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Please stay connected to the Control Tower project.

Check out these communication vehicles where you will find additional information on ControlTower, view interviews with Senior leaders, as well as Engage with the Control Tower team.

To access these links please click on the appropriate icons.

*The goal of these vehicles are to provide you with simplified , timely and targeted two-waycommunications about the Control Tower Project.


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COPYRIGHT 2011 ALCATEL LUCENT ALL RIGHTS RESERVED

CTP01000W_020.mp3

This completes the course Introduction to Control Tower Conceptual Design Training. Pleaseproceed to our next training course in this series Introduction to the Control Tower Blueprintand Conceptual Design.

Intro to Control Tower

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Transcript of Intro to Control Tower