The Aerospace & Defense Forum Orange County Chapter June 2, - - PDF document

The Aerospace & Defense Forum Orange County Chapter June 2, 2016 1

T R I V I S T A . C O M

The Real Business Value of SI OP

June 2, 2016

Presented By: Shelby Miller Vice President - TriVista

TRIVISTA.COM

A B O U T T R I V I S T A From factory to boardroom, your partner in operations

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TriVista is a boutique operations consulting firm, helping investors and managers build companies that are more productive, efficient, and valuable. Our experts average 10-35 years of experience running global

• perations for manufacturing and distribution companies. From factory to boardroom, we leverage this

knowledge to problem solve, accelerate financial and operational performance, and drive organic growth.

• Forecasting
• Inventory

Management

• Sales & Ops

Planning (SIOP)

• Strategic Sourcing
• Logistics &

Transportation

• Warehouse &

Distribution Supply Chain

• Greenfield Facility

Startups

• Facility

Relocations

• Footprint

Consolidations & Facility Closures

• Network

Optimization Footprint Optimization

• Lean Deployment
• Lean Training
• Six Sigma Problem

Solving

• Industrial

Engineering

• Process Redesign

Lean Six Sigma

Operational Excellence

• Strategic Planning
• Product

Development

• Innovation
• Portfolio

Management

• Voice of Customer

(VOC) Product Development & Innovation

Growth

• Strategic Planning
• Strategy

Deployment

• Operating

Strategy & Planning Operational Governance

Leadership

• Executive

Recruiting

• Interim

Management Executive Recruiting

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A B O U T M E

Shelby brings more than 20 years of global leadership experience and possesses a broad industry background with a track record of excelling in a variety of manufacturing and distribution environments. Shelby has extensive expertise in all aspects of supply chain management. He brings both real-world experience and a sincere passion in seeing companies succeed by assessing their current performance and designing improvement programs that deliver world-class results. EXPERIENCE

• TriVista’s Supply Chain Practice Leader

– Has supported 12 SIOP related engagements…and counting – Companies range in size from $30M – $400M – Relevant engagements:

• Multi site, global SIOP implementation for $200M industrial equipment manufacturer
• Global SIOP diagnostic and implementation for $150M manufacturer of HDPE and Glass

eyewear

• SIOP implementation and ERP support for $100M aerospace parts fabricator
• Results Achieved

– Increased fill rates an average of 60% – Increased customer OTD an average of 70% – Reduced working capital (inventory) an average of $3M per engagement – Enabled increased sales through improved forecasting and SKU rationalization QUALIFICATION

• 20+ years of Global Leadership Experience
• Sr. Director of Operations at ITT Industries, Cannon Division and Rockwell Collins
• Led multi-plant operations in the U.S. and Mexico for multi-billion dollar Aerospace, Industrial, and Technology

companies 3 Shelby Miller Vice President TRIVISTA.COM

T Y P I C A L S U P P L Y C H A I N & C O M M O N P A I N P O I N T S

Sales Inventory & Operations Planning (SIOP) influences every part of the Supply Chain and addresses the pain points 4 INFORMATION ERP SYSTEM

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T H E N E E D F O R S I O P

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Sales Inventory & Operations Planning (SIOP) focuses on predictably fulfilling customer orders by connecting the sales side of the business (product demand) to the supply side of the business (fulfilling that demand) Sales Team – Product Demand Production/Supply Team – Fulfilling Demand “If manufacturing could just keep up with our customers’ demand we wouldn’t have any issues” “I can’t keep up with today’s demand when I’m still working on yesterdays orders”

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W H A T I S S I O P ? What is SIOP?

An integrated business management process through which the organization continually achieves alignment and synchronization among all functions

What does SIOP do?

• Enables the sales side of the business to develop a realistic, achievable forecast by knowing what the

supply side is capable of producing and in what time frame

• Allows the supply side to know what Sales is trying to achieve, enabling them to plan and align resources

to support anticipated demand

• Establishes Proactive Communications

– Internally among departments – Externally with customers and suppliers

What are the results of SIOP?

• Improved Customer Experience
• Reduced Supply Chain Disruptions
• Reduced Supply Chain Costs
• Reduced Excess Inventory
• Improved Business Agility

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The Aerospace & Defense Forum Orange County Chapter June 2, 2016 4

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M Y S I O P S T O R Y

7 COMPANY: – Supplier to Tier 1 Commercial Aerospace Pilot Controls and IFE Manufacturer –

• Sr. Director of Operations- responsible for P&L and manufacturing plants in O.C. and

Mexico SITUATION: – Historical OTD was ~ 50% with $5M of past due shipments dating back as far as 2 years old – My goal was to improve OTD to >90% and reduce past due backlog to < $1M within twelve months, while not increasing inventory levels – Primary Pain Points

• We didn’t know the difference between forecast and demands
• We didn’t track demands against internal or external capacity
• We shipped customer orders randomly, not based on commitment or need

APPROACH: – Began by determining total monthly SKU/Revenue forecasts – Used historical demands to validate forecasts – Compared capacity needed to support all demand vs. available capacity – Implemented a rigorous process to discuss wants, needs, and constraints – Began scheduling demands based on capacity and focused on reducing the past due backlog – It took 5 months to see progress – we were consistently performing after 9 months – Used a manual process until we established a routine – used ERP to optimize the process RESULTS: – Improved OTD from 50% to 92% – Reduced past due backlog from $5M (~2 years aged) to <$1M (~90 days aged) – Reduced overtime 50% and increased utilization 30% – After 2 years, we were awarded supplier of the year in our category by our biggest tier 1 customer – achieved 100% OTD for 12 consecutive months and <250 DPM

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R E S U L T S M A T T E R

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C O M M O N S I O P R E S U L T S Improved Customer Experience

– Right Information – improved on-time delivery – Right Product – correct inventory levels – Right Quality – Right Time – responsiveness

Increased Margins

– Right Cost – material & freight cost reduction – Right People – labor productivity

Improved Working Capital

– Right Quantity - inventory

Improved Business Agility

– Right Information – Right Timing – Right Activities – Capitalize on unexpected customer and market conditions

• Quickly seize a sales opportunity
• Respond quickly to a downturn
• Environmental conditions

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(888) 694 - 1484 WWW.TRIVISTA.COM INFO@TRIVISTA.COM

SHELBY MILLER Vice President shelby.miller@trivista.com