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Setanta Systems - Supply Chain Report and Analyses Module

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Supply chain report module that automatically analyses and converts data into meaningful business intelligence.

Supply chain report module that automatically analyses and converts data into meaningful business intelligence.

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  • 1. Business Simulation SoftwareSupply Chain Analytics 1
  • 2. ContentsDescription PageIntroduction……………………………………………………………..1Solution Scope………………………………………………………....2Supply chain management problems solved……………………..3Some practical questions answered………………………………..4Steps to build - Scenario……………………………………….…......5 – 6Steps to build - Analytics report……………………………….…….7Scenario Analytics Drilldown - Cost …..………………………...…8 - 30Scenario Analytics Drilldown - Cost change ……………….…….31 - 55Scenario Analytics Drilldown - Inventory………………………….56 - 60Scenario Analytics Drilldown - Inventory change……….…….…61 - 66Contact details………………………………………………………….67 2
  • 3. 1 IntroductionThe purpose of this paper is to demonstrate how the analysis andreporting of supply chain dynamic complexity does not need to be acomplex process, if fact, it can be made so simple as to be automated.This is made possible using our simulation software that enables decisionmakers model and simulate supply chain scenarios using the “Modelingand Simulation Module” then import each scenario into the “Supply ChainReporting and Analytics Module” as required. Once imported, practicallyeverything else is automated. There is no further delay in getting down tounderstanding the dynamics of one or more scenarios or the dynamicsresponsible for differences between multiple scenarios, all at the click ofa mouse.We demonstrate this capability by taking you behind the supply chainprofit and loss statement to reveal these dynamic complexities.The objective is very simple, to access actionable information that enablesdecision makers to measure, influence and manage future outcomesthrough greater awareness and understanding. 3
  • 4. 2 Solution ScopeModelling Simulation Analytics Optimization 4
  • 5. 3 Supply Chain Management Problems SolvedDiagnosticModel current and proposed change to the supply chain strategy in order toidentify opportunities for driving change for competitive advantage.SimulationHolistic model that simulates cause effect for risk assessment and decisionmaking.Planning & ControlSupports the integration of Lean, Six Sigma and ConstraintsTheory so that the outcome of the Diagnostic and Simulation isreflected in the business planning process, such as, rolling forecasting.AnalyticsConnect cause and effect so that threats and opportunities are understood andappropriate action is targeted for sustainable results. 5
  • 6. 4 Some practical questions answeredDiagnosticWhere and what drives cost and risk along the supply chain?What is the cost to serve?How can we evaluate the effectiveness of current and proposed change?SimulationHow can we test the sensitivity to change when change is applied to multipledrivers across the supply chain simultaneously.?How can we rely less on intuition when dealing with complexity?How do we select the right KPIs for our business needs?Planning & ControlHow can we more effectively integrate continuous process improvement andsupply chain management into mainstream business planning and control?AnalyticsHow can we more effectively acquire the business intelligence and insight in atimely manner to reduce risk and leverage the gain from opportunities? 6
  • 7. 5 Steps to build - Scenario Supply Chain Modelling & Simulation ModuleThe following two pages outline the assumptions and steps required tobuild the scenario database used as the basis for this paper, Supply Chain 1. Raw material sourced from China, Malaysia, USA, Ireland 2. Raw Material (excl Irish sourced) routed to Holland for onward distribution.3. Manufacturing occurs in IrelandTrade Terms1. Supplies - Ex Works2. Sales - DeliveredTask 1. Reduce lot size in order to improve quality and reduce inventory2. Analyse impact by highlighting resulting change in a) Product lot size change b) Product Lot Size yield improvement c) Supplies lot size reduction 7
  • 8. 6 Steps to build - Scenario Supply Chain Modelling & Simulation ModulePrepare Value Stream Map to represent Supply chain.Configure system model based on value stream map.Assign demand to drive resource requirements.Execute code to auto build resource demand, utilization, multi-dimensional cost structure and extended period cost and revenue.Output = Scenario DatabaseBuild additional Scenarios as required by modifying driver assumptions. 8
  • 9. 7 Steps to build – Analytics Report Supply Chain Modelling & Simulation ModuleOnly input required:-Assign sequence number and name for each scenario to be imported. Sequenceone is assigned to the base scenario which represents the current state or scenariofrom which change is measured.Automated Process:-Execute code to auto import data from Modelling and Simulation Module and buildSupply Chain Analytics Reports. 9
  • 10. 8 Scenario Analytics Drilldown - Cost Supply Chain Report & Analytics ModuleThe screen shot in the next page represents the incremental change in thesupply chain P&L Statement from the current to the future state. The“Base Scenario” in this case focuses on the execution of the currentsupply chain strategy whereby the operational strategy is to maximiseproduct lot size.In this example the decision maker needs to understand what the outcomeof a decision to reduce the lot size would be from a holistic perspectiveand how each component of change contributed to the total. In order tounderstand this the change is subdivided into the follows increments, 1. Large to small product lot size 2. First pass yield improvement resulting from smaller lot size 3. Raw material lot size reduction.The objective of the Scenario Drill Down is to provide decision makerswith a total understanding of the base scenario before moving ontoreviewing the impact of each of the incremental changes above. 10
  • 11. 911
  • 12. 10 Scenario Analytics Drilldown - Cost Supply Chain Report & Analytics ModuleFrom the Variance report in the previous page the decision maker selectsthe Base Scenario to extract the Supply Chain P&L Summary for the“Large Product Lot Size”. This format provides insight, at a summarylevel, into the profit and loss based on the three segments of the demanddriven supply chain as follows, Supply Process Demand Process Product ProcessThe objective of this report is to provide decision makers with insight tothe dynamics of the supply chain performance from the perspective ofeach segment. Also, to serve as a launch pad from which decision makerscan drill down to understand the dynamic complexities of each segmentand the part that each plays in order overall supply chain financialperformance 12
  • 13. 1113
  • 14. 12 Scenario Analytics Drilldown - Cost Supply Chain Report & Analytics ModuleFrom the Base Scenario P&L Summary in the previous page there is onesignificant line item that stands out, Resource Imbalance - - As it suggests is the difference between Resources made available to support the supply chain strategy And Current demand for these resourcesBut this is just the starting point and just one of many consequences ofcurrent state that we need to understand. There is no actionableinformation at this level. We need to drill down to understand what drivesthis outcome and how we can better influence, measure and manage thecurrent state before driving change towards the future state. 14
  • 15. 13 Scenario Analytics Drilldown - Cost Supply Chain Report & Analytics Module Support ProcessThe objective of the next two pages is to drill down behind the SupportProcess in order to understand, 1. The scope and cost in providing these support processes 2. The scope and cost of each support process and identify opportunities for driving change. 3. Identify, in order of magnitude, which raw material items drive the greatest activity and cost for each process task. 4. Identify the key attributes and resource source that is responsible for driving cost for each process task.Actionable Outcome – We know where to affect change and canmeasure and manage the outcome. 15
  • 16. 14 Scenario Analytics Drilldown - CostSupply Chain Report & Analytics Module Supply Support Process Summary Configuration 16
  • 17. 15 Scenario Analytics Drilldown - CostSupply Chain Report & Analytics Module Supply Support Process Driver - Cyclecounting Activity Driver Attributes 17
  • 18. 16 Scenario Analytics Drilldown - Cost Supply Chain Report & Analytics Module Material CostThe objective of the next page is to drill down behind the Material Cost inorder to understand, 1. Material Cost by Part 2. Identify the key driver attributes, such as, purchase price, qty per, current process yield, first pass yield. Also, the routing step and product where demand for materials is driven.Actionable Outcome – We know where to affect change and canmeasure and manage the outcome. 18
  • 19. 17 Scenario Analytics Drilldown - CostSupply Chain Report & Analytics Module Material Cost Summary Driver Attributes 19
  • 20. 18 Scenario Analytics Drilldown - Cost Supply Chain Report & Analytics Module Logistics CostThe objective of the next two pages is to drill down behind the LogisticsCost in order to understand, 1. Scope and Cost of Logistics 2. Logistics Cost by raw material item 3. Identify the key driver attributes that drive logistics cost.Actionable Outcome – We know where to affect change and canmeasure and manage the outcome. 20
  • 21. 19 Scenario Analytics Drilldown - CostSupply Chain Report & Analytics Module Logistics Cost Expense Summary Freight - By Raw Material Item 21
  • 22. 20 Scenario Analytics Drilldown - CostSupply Chain Report & Analytics Module Logistics Cost Logistics Cost Driver Attributes 22
  • 23. 21 Scenario Analytics Drilldown - Cost Supply Chain Report & Analytics Module Transformation CostThe objective of the next two pages is to drill down behind the SupplyProcess Transformation Costs in order to understand, 1. Total transformation cost by routing step & value type 2. Transformation Cost & Value Type by activity. 3. Driver Activity cost by raw material item. 4. Driver Attributes, such as, cycle time, batch size, sample size, demand activity, pack configuration, resource utilization.Actionable Outcome – We know where to affect change and canmeasure and manage the outcome. 23
  • 24. Scenario Analytics Drilldown - Cost 22Supply Chain Report & Analytics Module Transformation Cost Summary By Routing Step Activity Cost By Routing Step 24
  • 25. Scenario Analytics Drilldown - Cost 23Supply Chain Report & Analytics Module Transformation Cost Driver Activity Cost By Raw Material Item Activity Driver Attributes 25
  • 26. 24 Scenario Analytics Drilldown - Cost Supply Chain Report & Analytics Module Resource Imbalance CostThe objective of the next two pages is to drill down behind the ResourceImbalance Cost in order to understand, 1. Resource Imbalance by Process Type 2. Resource Imbalance by Resource Cell 3. Resource Assignment summary 4. Resource Cell Spend SummaryActionable Outcome – We know the source, period cost, whereresources are consumed and the resulting imbalance so that wecan determine how best to optimise the utilization of resourcesfrom a holistic perspective rather that optimization on a silo bysilo basis. Involves a review of strategy and tactical plans. 26
  • 27. Scenario Analytics Drilldown - Cost 25Supply Chain Report & Analytics Module Resource Imbalance Cost Process Type Summary Process Resource Type Summary 27
  • 28. Scenario Analytics Drilldown - Cost 26Supply Chain Report & Analytics Module Resource Imbalance Cost Resource Cell Assignment Summary Resource Cell Spend Summary 28
  • 29. 27 Scenario Analytics Drilldown - Cost Supply Chain Report & Analytics Module Cost Of CapitalThe objective of the next two pages is to drill down behind the Cost OfCapital in order to understand, 1.Cost of capital by process and driver source, such as, process cycle time, idle resources, vendor credit, customer credit. 2. Cost of capital summary by driver source, e.g.., raw material process cycle time cost of capital. 3. Cost of capital by driver source detail, such as, process cycle time, cumulative flow time, resource cost, CoC rate Actionable Outcome – We know the source, period cost, whereresources are consumed, process cycle time, total time in process,cost of capital interest rate applied and the resulting cost ofcapital. All necessary information to decide best tactical plan toaffect cost of capital reduction. 29
  • 30. Scenario Analytics Drilldown - Cost 28Supply Chain Report & Analytics Module Cost Of Capital Process & Cost Of Capital Type Summary Process Cycle Time Cost Of Capital Driver 30
  • 31. Scenario Analytics Drilldown - Cost 29Supply Chain Report & Analytics Module Cost Of Capital Driver – Process Cycle Time Detail 31
  • 32. Scenario Analytics Drilldown - Cost 30 Supply Chain Report & Analytics Module ConclusionThe scenario drilldown process presented for the “Supply” segment of thesupply chain is repeated for both the “Demand and Product” segmentswhen completed,Actionable Outcome – Thorough understanding and insight into resourceand cost for each segment of the current supply chain scenario, keydrivers and attributes. Understanding of where improvement can be drivenacross the supply chain and where a review of strategic and tactical planswarrant further analysis and possible change.Next Learning Process – The remainder of the paper focuses onunderstanding how the change from a large to a small lot size drivesperformance improvement across the supply chain. 32
  • 33. 31 Scenario Analytics Drilldown - Cost Change Supply Chain Report & Analytics ModuleThe objective of this phase of the supply chain change review isunderstand how and where the cost and overall performance of the supplychain has been affected by a reduction in Lot Size.Each change resulting from a reduction in the Lot Size can be representedand analysed in the same way as the preceding pages. The purpose of thefollowing section of the paper is to demonstrate that the affect of areduction in Lot Size could be viewed from the perspective of 1. Batch Affect – Unit cost increase for batch based processes 2. Quality Affect – Research has demonstrated that improvement in product quality can result from lower lot sizing. 3. Frequency Affect – Increase in frequency for support and transformational processes that affect both batch and non batched based activities. 33
  • 34. 32 Scenario Analytics Drilldown - Cost Change Supply Chain Report & Analytics ModuleBased on the selection of scenarios for comparison the interactive reportand drill down capability automatically analyses the change from onescenario to another.The objective of this drill down is to provide decision makers with athorough understanding and insight into how a change as simple as a lotsize reduction can have such an impact on both supply chain cost andinventory holding.Replaces intuition with fact based understanding and therefore a sounderfoundation on which to influence and manage change. 34
  • 35. 33Scenario Analytics Drilldown - Cost Change Supply Chain Report & Analytics Module 35
  • 36. 34 Scenario Analytics Drilldown - Cost Change Supply Chain Report & Analytics Module Support ProcessThe objective of the next two pages is to drill down to understand theaffect of change from large to small lot size on supply chain supportprocesses, as follows, 1. Change at Segment Level. (Supply, Demand, Product) 2. Change at process level (business support process by segment) 3. Change at task level (by business support process) 4. Change at task driver level (by Part) 5. Change at task driver attribute level. (Process cycle time, Batch Size, Sample Size, Activity)Actionable Outcome – We know where and how a change insupport process cost has arisen and how we can influence,measure and manage the outcome. 36
  • 37. Scenario Analytics Drilldown - Cost Change 35 Supply Chain Report & Analytics Module Support Process Supply Chain Segment Change Summary Supply Process Change Supply Process Task Change 37
  • 38. Scenario Analytics Drilldown - Cost Change 36 Supply Chain Report & Analytics Module Support Process Driver Change Driver Attribute Change 38
  • 39. Scenario Analytics Drilldown - Cost Change 37 Supply Chain Report & Analytics Module Material CostThe objective of the next three pages is to drill down to understand theaffect of change from large to small lot size on supply chain material cost, 1. Change at part level. 2. Change at part level where used 3. Change in Material cost drivers where used. (change in Currency, price change, Qty Per, Current process yield, First pass yield, volume.)Actionable Outcome – We know where and how a change inmaterial cost has arisen and how we can influence, measure andmanage the outcome. 39
  • 40. Scenario Analytics Drilldown - Cost Change 38 Supply Chain Report & Analytics Module Material Summary 40
  • 41. Scenario Analytics Drilldown - Cost Change 39 Supply Chain Report & Analytics Module Material Where Used 41
  • 42. Scenario Analytics Drilldown - Cost Change 40 Supply Chain Report & Analytics Module Material Driver Attributes 42
  • 43. Scenario Analytics Drilldown - Cost Change 41 Supply Chain Report & Analytics Module Logistics Cost The objective of the next three pages is to drill down to understand theaffect of change from large to small lot size on supply chain logistics, asfollows, 1. Change at segment level. (Supply, Demand, Product) 2. Change at Expense line item level. (by segment) 3. Change at Expense line item level. (by Part) 4. Change at driver attribute level,. (Exp rate, Currency, price change, component Packaging weight, Volume.) Actionable Outcome – We know where and how a change inlogistics cost has arisen and how we can influence, measure andmanage the outcome. 43
  • 44. Scenario Analytics Drilldown - Cost Change 42 Supply Chain Report & Analytics Module Logistics Supply Chain Segment Change Summary Spend Change 44
  • 45. Scenario Analytics Drilldown - Cost Change 43 Supply Chain Report & Analytics Module Logistics Freight by Driver Change 45
  • 46. Scenario Analytics Drilldown - Cost Change 44 Supply Chain Report & Analytics Module Logistics Freight Cost Driver Attribute Change 46
  • 47. Scenario Analytics Drilldown - Cost Change 45 Supply Chain Report & Analytics Module Transformation Cost The objective of the next two pages is to drill down to understand theaffect of change from large to small lot size on supply chaintransformation costs, as follows, 1. Change at Segment Level. (Supply, Demand, Product) 2. Change at Routing level (by process) 3. Change at task level (by routing step) 4. Change at Task Driver Attribute level (Process cycle time, Current process yield, First pass yield, Lot Size, Volume. Actionable Outcome – We know where and how a change intransformation cost has arisen and how we can influence, measureand manage the outcome. 47
  • 48. Scenario Analytics Drilldown - Cost Change 46 Supply Chain Report & Analytics Module Transformation Cost Supply Chain Segment Change SummaryProduct Process Step Transformation Cost Change 48
  • 49. Scenario Analytics Drilldown - Cost Change 47 Supply Chain Report & Analytics Module Transformation Cost Task Cost Change Volume Based Task Change Lot Size Based Task Change 49
  • 50. Scenario Analytics Drilldown - Cost Change 48 Supply Chain Report & Analytics Module Resource Imbalance The objective of the next three pages is to drill down to understand theaffect of change from large to small lot size on supply chain resourceImbalance Cost, as follows, 1. Change at segment level (Supply, Demand, Product). 2. Change at process type level. (Transformation and Business Process) 3. Change at Resource cell Level (where resource are located) 4. Change at Driver Attribute level ( Resource spend, Resource assignment)Actionable Outcome – We know where and how a change inresource imbalance cost has arisen and how we can influence,measure and manage the outcome. 50
  • 51. Scenario Analytics Drilldown - Cost Change 49 Supply Chain Report & Analytics Module Resource Imbalance Cost Supply Chain Segment Change SummaryProduct Process Resource Imbalance Cost Change 51
  • 52. Scenario Analytics Drilldown - Cost Change 50 Supply Chain Report & Analytics Module Resource Imbalance Cost Resource Imbalance Change 52
  • 53. Scenario Analytics Drilldown - Cost Change 51 Supply Chain Report & Analytics Module Resource Imbalance Cost Change Spend Change 53
  • 54. Scenario Analytics Drilldown - Cost Change 52 Supply Chain Report & Analytics Module Cost Of CapitalThe objective of the next three pages is to drill down to understand theaffect of change from large to small lot size on supply chain cost ofcapital, as follows, 1. Change at segment level (Supply, Demand, Product). 2. Change at process type level. (Transformation and Business Process) 3. Change at Driver Level (Cycle time, Idle time, Vendor and customer credit) 4. Change at Driver Attribute level ( Forecast cost, Cost of Capital rate, credit terms, cycle time, idle time).Actionable Outcome – We know where and how a change in cost ofcapital has arisen and how we can influence, measure and managethe outcome. 54
  • 55. Scenario Analytics Drilldown - Cost Change 53 Supply Chain Report & Analytics Module Cost Of Capital Supply Chain Segment Change Summary Supply Process Cost Of Capital Change 55
  • 56. Scenario Analytics Drilldown - Cost Change 54 Supply Chain Report & Analytics Module Cost Of CapitalVendor Credit Cost Of Capital Change Summary 56
  • 57. Scenario Analytics Drilldown - Cost Change 55 Supply Chain Report & Analytics Module Cost Of CapitalVendor Credit Cost Of Capital Change by Part 57
  • 58. Scenario Analytics Drilldown - Inventory 56 Supply Chain Report & Analytics Module InventoryThe objective of the following four pages is to drill down from a summaryto a part or product inventory level in order to understand where and howinventory cost accumulates across the supply chain. Also, to exposewhere effort should be focused in driving process improvement that willresult in inventory reduction.Actionable Outcome Understanding what drives inventory across thesupply chain, we are enabled to drive inventory reduction. This isachieved by focusing effort on driver attribute improvement, such ascycle time, total flow time, quality, forecasting etc. 58
  • 59. Scenario Analytics Drilldown - Inventory 57Supply Chain Report & Analytics Module Raw Material Inventory Summary 59
  • 60. Scenario Analytics Drilldown - Inventory 58Supply Chain Report & Analytics Module Raw Material Inventory 60
  • 61. Scenario Analytics Drilldown - Inventory 59Supply Chain Report & Analytics Module W.I.P & Finished Goods Inventory Summary 61
  • 62. Scenario Analytics Drilldown - Inventory 60 Supply Chain Report & Analytics ModuleW.I.P & Finished Goods Inventory Flow & Cost Accumulation 62
  • 63. Scenario Analytics Drilldown – Inventory Change 61 Supply Chain Report & Analytics Module Inventory ChangeThe purpose of the following six pages is to drill down to understandhow change applied to driver attributes such as lot size, quality affect andprocess improvement etc. affect the flow and accumulation of inventoryacross the supply chain. Earlier in this paper we demonstrated how achange in lot size drives change across the supply chain and howanalytics enable us to understand the dynamic complexity of what occursas a consequence of change. What we learned from this helps to explainhow change at driver attribute level affects inventory flow and costaccumulation across the supply chain.Actionable Outcome By understanding how change applied to driverattributes affect inventory flow and accumulation across the supply chainwe are enabled to influence and target change that will result in greateragility, flexibility, reduce risk, increase competiveness and supportsustainable competitive advantage. 63
  • 64. Scenario Analytics Drilldown – Inventory Change 62 Supply Chain Report & Analytics Module Inventory Change Summary 64
  • 65. Scenario Analytics Drilldown – Inventory Change 63 Supply Chain Report & Analytics Module Raw Material Inventory Change 65
  • 66. Scenario Analytics Drilldown – Inventory Change 64 Supply Chain Report & Analytics ModuleRaw Material Inventory Flow & Cost Accumulation Change 66
  • 67. Scenario Analytics Drilldown – Inventory Change 65 Supply Chain Report & Analytics Module W.I.P & Finished Goods Inventory Change 67
  • 68. Scenario Analytics Drilldown – Inventory Change 66 Supply Chain Report & Analytics ModuleW.I.P & Fin Goods Inventory Flow & Cost Accumulation Change 68
  • 69. 67 Contact UsCyril Bourke ceoSetanta Business Systems LtdAddress:Redmondstown House,Redmondstown,ClonmelCo. TipperaryIrelandPhone: 353-52-6125476Email: cyrilbourke@setantasystems.com 69