Profitably Addressing Complexity in Manufacturing

Profitably Addressing Complexity in ManufacturingJDA Manufacturing Planning

Increasing Complexity Proves Problematic for ManufacturersChallenges and Opportunities

Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL

New Levels of Complexity Further Threaten Profit / Satisfaction

Customer Empowerment

Globalization

External FactorsExpanding Network

• Choice / Option• Expectation• Service Level• Now

• Shift from Regional• Disparate Views• Varying Local

Parameters• Emerging Markets

• Outsourcing• External Partners• Shifting Reliance

• Geopolitical / Natural Disaster

• Economic Uncertainty

• Cost Volatility


Product Proliferation:Consumers Drive Choice

100%Number of derivatives of a new car

model has increased

20%Source: McKinsey

Average product cycle for a new model has fallen

From 2002 to 2011


Manufacturers Turn to Choice:SKU Counts are Increasing

Number of SKUs in Grocery grew

50%between 2003 and

2010.

Source: Food Marketing Institute


Shifts in Supply and Delivery Factors

Skilled Labor Shortage40 million by 2020

Source: McKinsey

Commodity Price IncreasesRaw Materials by 50%

Source: McKinsey

Transportation & Energy Costs“Changing the Math”


Going Global:Accelerating Quickly

Global trade has accelerated twice as fast as US GDP for the past 20 years

Source: McKinsey

2/3 of surveyed high tech companies have presence in emerging markets.

Source: IDC


Symptoms of Failing to Manage Complexity

“I’m not meeting service levels targets, and I don’t see how they can improve.”

“Our plans are so inflexible that it’s always a major disruption and margin hit to take

advantage of a new opportunity or react to problems.”

“My operating and expediting costs are increasing, and it’s not as simple as passing the cost on to customers.”

“Achieving my production goal isn’t helping me achieve my sales goal.”

“My inventory is growing.”“My topline revenue isn’t growing.”

“I’m drowning in spreadsheets.” “My stakeholders are demanding more.”“I think these are my problems, but I’m not

sure.”

“I’m not meeting service levels targets, and I don’t see how they can improve.”

“Our plans are so inflexible that it’s always a major disruption and margin hit to take

advantage of a new opportunity or react to problems.”

“My operating and expediting costs are increasing, and it’s not as simple as passing the cost on to customers.”

“Achieving my production goal isn’t helping me achieve my sales goal.”

“My inventory is growing.”“My topline revenue isn’t growing.”

“I’m drowning in spreadsheets.” “My stakeholders are demanding more.”“I think these are my problems, but I’m not

sure.”


Symptoms of Failing to Manage Complexity

Results of Failing to Manage Complexity

Customer dissatisfactionMissed opportunities

Competing goals / incentivesStagnant growth / margin decline

Excess inventory and carrying costsMisallocated resources and assetsProductivity drain / data challengesUnhappy stockholders / leadership Compromised enterprise visibilityCompromised decision-making

Compromised timelinesCompromised accuracy


Manufacturing Must Shift

Inward-Focused

One-Size-Fits-All Structure

Lacked Flexibility

Misaligned Functions

Locally Optimized

Customer-Centric

Segmented to Serve Different Markets

Business Agility

Internal and ExternalSynchronization

Globally Optimized for Performance


JDA Manufacturing Planning Suite

Profitably Addressing Complexity

EXECUTION

Inventory Planning

Factory Planning

Master Planning

Demand Planning

JDAManufacturing

Planning

Sales & Operations Planning

STRATEGY

Process & PeopleStrategy and ProcessOrganizational DesignChange Leadership

Continuous Improvement

Access & DeliveryJDA Cloud

Business AgilitySustainable ROI

Upgrade & Optimization

Orchestratingmanufacturing and distribution operations …

by aligning universal and segmented demand …

with resources, materials, and

assets …

to optimize buy-make-move-store-deliver decisions …

across the enterprise.


Problem Solved:Customer-Centric Supply Chain

Scrambling to Adapt to Forecast MisfiresLow Ability to Detect Market Changes

Lack of Forecasting DepthCompromised Service Levels

BEFORE JDAManufacturing Planning

Earlier Identification of Market ChangesImproved Forecast Accuracy

Ability to Plan at Lower LevelsBetter Service Level

AFTER JDA Manufacturing Planning

Underperforming Forecasts | Low Loyalty Improved Customer Understanding | Higher Loyalty

Increased customer service rating to 99.5% while reducing inventory 17%


Problem Solved:Segmented Supply Chain

One-Size-Fits-All Approach to CustomersLack of Ability to Align Business Goals

Compromised ProfitabilityBoilerplate Offerings


Differentiated Service by CustomerImproved Business Goal Alignment

Improved Order PrioritizationSegmented Demand View

Improved Profitability


Standard Offerings | One-Size-Fits-All Customer View Customized Approaches | Improved Profitability

Grew stronger connections to customers, reduced cost / complexity, improved internal collaboration and forecasting..


Problem Solved:Profitable & Agile Supply Chain

Limited View into Global EnterpriseSluggish Planning Integration

Long Response CyclesInflexible Processes


Comprehensive Enterprise InformationAbility to Reconfigure Supply Chain

Agility and Quick ResponsesSupply / Demand Cohesion

Improved Profitability


Siloed Functions | Sluggish Turnarounds Improved Responsiveness | New Opportunities

Doubled inventory turns; Enabled rapid response to dynamic market conditions


Problem Solved:Synchronized Supply Chain

Alignment of Supply, Demand, Finance, Etc.Greater Flexibility and Response TimeImproved Asset/Resource UtilizationScenario-Based Decision Support

Improved Agility

AFTER JDAManufacturing Planning

Failure to Bridge Strategy and ExecutionInaccurate Order Promising

Compromised Service LevelsLack of Decision Support

Waste of Assets

BEFORE JDA Manufacturing Planning

Guesswork | Failure to Adapt and Execute Supply Chain Responsiveness | Profitability

Centralized planning into one process; Cut forecast lead time from 4 weeks to 2 weeks, reducing planning effort by 30%, errors by 90%


Problem Solved:Optimized Supply Chain

Improved Utilization of Assets, Inventory, etc.Improved ROI / Time-to-Value

Reduced Excess InventoryImproved Service Levels

AFTER JDAManufacturing Planning

Hidden Opportunities for ImprovementCompromised Service Levels

Expensive MiscalculationsFlat Metrics


Missed Opportunity for Higher Investment Return Maximized Margin | Improved Customer Satisfaction

Decreased inventory by 50%Increased on-time deliveries 90%


JDA Manufacturing Planning: End-to-End

“JDA has enabled us to actually take market share by being able to

deliver product on time.”

Fujitsu Network Communications

ONLY

High Value Functionality • High Adoption • Greater Productivity


20-25% Forecast Accuracy55-94% Order Promising Accuracy

5-8% Inventory Turns11% Production Line Efficiency

.5-5% Service Level Improvement42% Planning Effort Reduction 4-15% Safety Stock Reduction

4-8% Overall Inventory Reduction5-12% Lost Sales Reduction

JDA Manufacturing Planning:Agile, Aligned, Optimized

Optimizing Opportunities for Growth


Putting an End to anImpossible Choice

PROFIT SATISFACTION

• Tighter integration of strategy to plan to execution• Improved alignment of investments with returns• Increased efficiencies and cost savings• Decisions supported with dynamic scenarios• Decreased inventory

• Tighter integration of strategy to plan to execution• Improved alignment of investments with returns• Increased efficiencies and cost savings• Decisions supported with dynamic scenarios• Decreased inventory

• Improved OTIF• Greater agility in responding to changes• Priorities based on segmentation• Global and expanded network resources

available to meet customer expectations

• Improved OTIF• Greater agility in responding to changes• Priorities based on segmentation• Global and expanded network resources

available to meet customer expectations

ONLY

+


Guiding the Industry’s Leading Supply Chains

500+38+

Manufacturers

Countries

Image courtesy: alpha

20 of Gartner Top 25 Supply Chains


Optimizing Manufacturing Across the Enterprise

Demand Planning

Sales & Operations Planning

Master Planning

Factory Planning

Inventory Planning

ONLY

Profitability • Customer Satisfaction • Alignment • Agility


http://www.jda.com/solutions/manufacturing-planning/

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