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IMPLEMENTING SUSTAINABLE SOLUTIONS FOR SUPPLY CHAIN EXECUTION IN A - - PowerPoint PPT Presentation
IMPLEMENTING SUSTAINABLE SOLUTIONS FOR SUPPLY CHAIN EXECUTION IN A - - PowerPoint PPT Presentation
IMPLEMENTING SUSTAINABLE SOLUTIONS FOR SUPPLY CHAIN EXECUTION IN A GROWING BUSINESS Michelin low cost division 1 File ref./subject Author/Dept.: Date created: Classification: D3 Retain for: WA Page LEAN NOT CHEAP BACK TO BASICS . IOT,
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THIERRY GAUDET DIT TRAFIT
VP SC, LOGISTICS & ISIT – LOW COST DIVISION
Master in industrial Engineering – CPIM - 55 years old – Married – 4 children – French http://th.linkedin.com/pub/thierry-gaudet/17/826/765 Past 30 years :
- Supply chain
- Logistics
- Manufacturing
- Systems
- Projects
- Mostly automotive and textile industry, but also pharmacy, food & electronics
- 14 years in Asia (Philippines, Singapore, Thailand), 5 years in Hungary
One of the founders of the low cost division of Michelin (world perimeter) :
- design a disruptive and customer centric business model
- creation of the business processes supporting it : coherent, lean and effective manner across all the functions
- design and implementation of the ERP
- Launch & management of the operation with successful outcome since 2013
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AGENDA
- Michelin low cost division : brief history & context
- A specific business model
- Customer centricity & sustainability
- The winning battle of SC : tactical horizon
- The excellence in execution
- Conclusion / Key take-aways
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Michelin low cost division Brief history & context
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T1 39% T2 18% T3 43%
ZONE EUR - YTD 09-2017
MARKET SPLIT BY TIER
TOTAL
+0.8%
T1
- 3.1%
T2
+3.9%
T3
+3.2%
- 4%
- 3%
- 2%
- 1%
0% 1% 2% 3% 4%
ZONE EUR - YTD 09-2017
MARKET GROWTH
TYRES MARKET 2017 : TIER 3 MARKET BIGGER THAN T1 ;
T2 & T3 MARKETS GROW FASTER THAN T1
A WORLD LASTING TREND OF THE PAST YEARS .
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TIER 3 BUSINESS CAN BRING A DECENT MARGIN
.
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TIER 3 COMPETITIVE ENVIRONMENT
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MOSTLY SIZABLE ASIAN GROUPS - 200M PIECES TYRES ASIAN OVERCAPACITY MOST OF THE WESTERN MANUFACTURER ALSO HAVE AN OFFER
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TIER 3 COMPETITIVE ENVIRONMENT MORE THAN 170 BRANDS
.
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LOW COST DIVISION MANDATE FROM MICHELIN GROUP SINCE 2012
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Provide growth & value creation on T3 segment Create competition on the battle field of Asian Tigers Maintain credible complete offer to our distribution partners
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ANSWER TO THE MANDATE = A NEW BUSINESS MODEL METHODOLOGY & MAIN POINTS
.
- Customer interviews : pains
& gains
- Competition mapping
- Distribution mapping
- Economic simulations
Conception of complete coherent vision : sales, marketing, SC, logistics, finance, industry, …
Blue ocean strategy method
Reliable supply of Quality budget tires Supported by Easy and Profitable Business
- ffers
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SUSTAINABLE SC ALIGNED WITH BIZ MODEL - EXAMPLES
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Reliable SC – Short lead time – Value creation Customer pains & gains
Biz model
MT Flexibility & ST reactivity Full use of factory capacity xx xx Low stock
Key success factors
Make to
- rder
Products standardization – Late differentiation Specific customer’s contract = capacity reservation + forecast with tolerances on mix
SC & Biz principles
Product & process design to maximize flexibility Go to Market / distribution model
Industry – sales - … processes
Monthly demand review Monthly capacity planning in each plant / Flexibility planning Commitment / reservation of production by order Allocation of stock by priority of order / commitment Full truck only shipment to customers / mono or multidrop
SC processes
Holistic consistent processes
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SC winning battlefield : tactical horizon
3 key highlights
- Demand management
- Capacity planning
- S&Op
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MONTHLY TACTICAL PROCESS : INTERNATIONAL BEST PRACTICES ADAPTED WITH BIZ MODEL SPECIFICS
1-6
Local demand planning Central division Country / region Factory Demand review Sourcing MT Capacity planning Supply / stock / service planning Cost & investment options Executive S&Op meeting : choices & arbitration Post S&Op = commu- nication Execution Execution Monitor & ST arbitrations
6-10 10-15 15-20 20-25 Time in each month
Management team key moment every month : not a plan but a risk /
- pportunity planning
device (Qty & €) Sales owner of data / SC owner
- f process
Partially constrained by division
- bjectives / available capacity
MRP2 type geared at flexibility anticipation Pre defined rules Vs S&Op choices
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Excellence in execution : operational horizon
- SC, Logistics & customer service
- Lean & respect of biz model promises
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AUTOMATED DEMAND CAPTURE AND PROCESSING
Lean customer service & digitalized SC Customer centricity
B2B portal Commitment that can be executed Automated supply planning Make to order Portal
- Order management
- Contracts and invoices
- Stock planned availability
- Product catalog & evolution
- Marketing material
- …
Supply planning
- Short term sourcing & stock netting
- Prod planning by plant / workshop (2-4 months horizon)
- Commitment to customer by priority
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THE INTEGRATED ERP SUPPORTS ALL
Consistent data / paperless
Ex : WMS
- Classical Storage management : every pallet identified + FIFO /
date of production (fresh tyres required in some markets)
- Traceability of customer delivered for every tyre
- Allocation of tyre by order / customer in respect of priority
- Invoice generation when picking completed / truck loaded
- Quality system :
- Process described
- ERP fully integrated and aligned with
processes & Biz model
- Specific Devt only on core of biz model,
absolutely standard elsewhere
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EXECUTION CONTROL
The operational team members are empowered Central team manage only the exceptions
- Weekly process
- Participation of customer service, factory planning, warehouse manager, central supply planner
- Led by sales assistant
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SOME EXECUTION RESULTS
- EMEA market share doubled since 2013
- The division creates value now and supports
the amortization of the massive capacity creation investment
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Conclusion / Key take-aways
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SUSTAINABLE SOLUTIONS FOR SUPPLY CHAIN
- Required in any kind of business, especially if growing and very
competitive market
- Plan and finance the required projects (Logistics, planning systems, flexible factory, …)
- Part of a strategic vision of the company
- Must implement consistency
- Strategy & business model / tactical /operational
- Engineered & documented processes implemented through ERP
- All company functions aligned / not only SC
- Based on international SC standards
- Well know but often not implemented : back to basic
- Specific adaptations only for core functions of the biz model
- Implementing / developing it is a process / long project
- Chose the priorities with the rest of the business : agile method
- Digital is tool not an obligation : be selective
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