2. About SCLinx
SCLinx is a management consulting firm specializing in executive supply chain coaching
for oilfield services companies
Target clients and engagement decision makers include:
• the executives to whom the supply chain reports
• the top supply chain executives in a firm, and
• the senior members of the supply chain team
Target engagements include:
• coaching engagement
- initial assessment: in-depth analysis of the company, its supply chain, and its
challenges resulting in the development of a strategic roadmap
- ongoing monthly coaching
• project-specific engagement
- specific deliverable as specified in a negotiated statement of work
.
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3. Our Approach
Supply chains must be customer-anchored to deliver competitive advantage
• we believe oilfield supply chains can deliver competitive advantage to products and
services companies only when their goals are anchored in the customer’s
requirements
Planning and repeatable execution are key
• we believe competitive advantage is achieved by pursuing excellence in planning,
repeatable execution, and by anchoring the supply chain in the customer’s needs
• planning and execution improvement must focus on the links in the value chain
- if the links are tightened, we can reduce inventory, lower costs and shrink lead times
- if the links in the value chain are loose, we must compensate with wasteful inventory investment,
higher costs, and extended lead times
Coaching builds sustainable improvement
• our approach is to coach supply chain leaders and their teams to create agile oilfield
service supply chains that deliver products and services as promised to the customer
• coaching builds skills in the executive and the team
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4. Anchoring in the Customer
Customer-application - a group of
customers with similar buying behavior
participating in an application with similar
requirements.
• Majors and NOCs in the deepwater
• Independents in US shale plays
• Pemex offshore
Service company success in a given
customer-application is driven by
critical success factors
• Cost
• Lead time
Supply chain strategic goals must focus on
• Imperatives
• Internal goals
• External goals
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5. product
line
Customer-Anchored S&OP
Traditional S&OP often fails to attract
top management
• Demand planned by geography
and product-line; customer-
application detail is lost
• Resource planning performed
by plant (and by vendor)
• S&OP meeting organized around
product lines
Customer-Anchored S&OP:
• Demand planning initiated by
customer-application by geography
• Resource planning performed by
plant and by vendor
• S&OP meeting organized around
customer-applications
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geography
customer-
application
6. We Wrote the Book
Section I Introducing the Customer-Anchored Supply Chain
Chapter 1 Customer-Anchored Supply Chains
Section II Planning
Chapter 2 Sales & Operations Planning
Chapter 3 Demand Management - Demand Planning
Chapter 4 Inventory Planning
Chapter 5 Resource Planning
Chapter 6 Performance Monitoring
Chapter 7 The Monthly Executive S&OP Meeting
Section III Execution
Chapter 8 Planning and Execution Strategies
Chapter 9 Demand Management Order Management and
Order Promising
Chapter 10 Materials Management The Master Schedule
Chapter 11 Materials Management Materials Requirements
Planning (MRP)
Chapter 12 Execution
Section IV Advanced Topics
Chapter 13 Dealing with Complexity and Variation Configure-
to-Order (CTO)
Chapter 14 Capital Planning and Spares Planning
Chapter 15 Competency Management
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Customer-
Anchored
Supply
Chains
an executive’s guide to
building competitive
advantage in the
oil patch
Gary Flaharty
Noman Waheed
7. Why Engage SCLinx?
Balance sheet improvement
• too much inventory, too much debt
- free up capital / de-lever
- improve economic value added,
improve return of shareholder’s
equity and debt
Service level improvement
• lead time reliability
• lead time reduction
Cost improvement
• operational efficiency
Customer-anchored business planning
• developing a unified go-to-business
game plan supporting the customer
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New market realities
• North America market over-supplied
unconventional gas and oil
• service companies slashing staff
• oil companies looking for price
concessions
• both must look at the underlying
processes
Strategy focus
• tactical imperatives squeezing time
available for strategic thinking
• SCLinx helps executives leverage
limited time for strategic thinking
• another set of experienced eyes
Coaching-oriented model
improving economic returns on investment
8. SCLinx Capabilities
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our toolkit and experience
Supply chain executive and
team coaching
Enterprise Resource Planning
implementation
Sales and Operations Planning
Demand planning
Resource planning
Materials Requirements Planning
Master Production Scheduling
Spare parts planning
Inventory planning and optimization
Statistical forecasting
Supply chain operational efficiency
Competency assessment and training
Operating models and organizational designs
Supply chain simulation (Linx)
When the engagement requires additional resources SCLinx will assist the
client with engaging a fit-for-purpose source of additional resources
9. The Annual Assessment
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Elements of the annual assessment
• strategy
- imperatives, external, and internal
• processes
- sales and operations planning, order management
and commitment, inventory planning, materials
management, master scheduling and execution,
spare parts planning
• people & culture
- standard work & competency management
- skills assessment
- RACI development
• technology
- IT infrastructure assessment
- advanced planning systems
Gap assessment, priorities and road map
Benefits case
Balanced scorecard
The Assessment
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Detail
Strategic
• Strategic – (do the employees understand the company’s strategy?)
• Does everyone understand the critical success factors of the company?
• How is the communications between the field operations and supply chain operations?
• Do we know what the customer’s needs are?
• Do you understand the what makes the customer’s customer successful?
• Do you understand what your role is in the broader energy supply chain?
Sales & Operations Planning
• Is there a core S&OP planning process for the company?
• If so, who participates in the S&OP meeting?
• How is the data collected for the S&OP meeting?
• How often is the S&OP meeting conducted?
• Is there an action log documented during the S&OP meeting?
The Assessment
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Detail
Demand Planning
• What is the demand planning methodology?
• Can the demand plan translated in a language that can be understood by the resource
planning team?
• Are there other plans other than S&OP plan?
• Is demand forecast and it’s bias measured?
• Is there a supporting technology to generate demand plan or is the organization
planning with spreadsheet?
• Is the demand planning process documented in standard work and adhered to?
Inventory Planning
• Is the inventory pegged to the customer?
• Is the inventory considered by the company as capital investment or “free”?
• Do we intentionally build inventory for seasonality is it just in case?
• How is the inventory build: “tribal knowledge” or “calculated”?
The Assessment
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Detail
Inventory Planning continued…
• How is the inventory performance measured and how is optimal inventory incented?
• What are the company’s strategies to reduce inventory?
• Does the company know how much inventory it should carry?
Resource Planning
• What are the critical resources (human, machine, materials etc.) for the company?
• Is the demand fulfilled by the resources available by the company and the strategic
suppliers?
• Do the sales force understand the capacity constraints of the resource planning?
• Does the company understand the vendor capacities?
• Does the company employ “demand shaping” strategies to close the gap between
demand and supply?
• Is there an understanding between the field operations and supply chain the the
resource plan is realistic?
Implementation Roadmap
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Phased Roadmap
Business Analysis
& Benchmarking
4 to 6 weeks
Process development
& Rollout Planning
8 To 10 weeks
Pilot
12 to 16 weeks
Scale
Diagnose Design Deploy
Mobilize
Plan
Phase I Phase II
• Understand the as-is
process via
documentation and
interviews.
• Rate as-is process with
SCLinx Common,
Progressive, and world
class benchmarks
• Using the agreed
hypothesis, create a
opportunity
assessment summary
deck for the
leadership team
• Compute KPIs for root
cause analysis
• Form hypothesis
based on the KPI
results
• Test hypothesis with
S&OP Team
• Iterate until root case is
identified.
Qualitative
Analysis
Root Cause
Analysis
Leadership
Feedback
Pre-Work
• Build the extended team
• Communicate
objectives of the project
to leadership and
extended team
• Obtain S&OP KPI data
• Prepare an introductory
communications
package
Activities:
Deliverables: • List of key stake holders
and their contact
information
• Communications Deck
• Series of hypothesis to
test further with data
• Series of questions for
any follow up interviews
• Prioritized list of gaps
supported by data
analysis and interviews.
• As-is state documented
• Opportunity assessment
summary
• Commitment from
Leadership to support
and pursue change.
10. Linx
Supply Chain Simulation Game
Linx is a supply chain simulation game designed to illustrate certain supply chain principles
Linx supply chain simulation performs like a real supply chain and, it breaks down like a
real supply chain
• SCLinx facilitators coach participants to apply new concepts and make connections
between how the simulation breaks down and what happens in real life
• the problems and solutions proposed in the game parallel real life situations and
solutions to supply chain challenges in oilfield service supply chains
Linx is most effective when the client firm’s participants represent a wide variety of
operational and supply chain roles
Linx is customized to the client firm’s processes to closely model what the firm sells and
the nuances of its operations and supply chain
Linx illustrates management principle critical to the success of the firm
A Linx engagement includes customization of the Linx simulations game to the client’s firm
and operating model
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11. The Case for Strategic Change
Unconventional gas-directed drilling in the 6th year of decline
Unconventional oil-directed drilling in the first leg of decline
US oil production increasing (O 1.1-1.2 mbd last 3 years)
• US shale supplied 100% of the world’s incremental need over the last 3 years
• US oil production continues to increase (2 year lag)
• inventory of drilled and not fracked growing
Saudi’s cutting development budget by 25%
• Oil-directed drilling will remain depressed absent a swing producer
Rig count suggests only 400-600 rigs needed to offset declines!
The old playbook is … old
• Cutting people and vendor prices to protect margins and lower F&D costs will not work
for this structural change
• Supply chain executives need to think strategic while corporate screams for
immediate results.
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12. Gary Flaharty
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Managing Partner
Gary Flaharty is a founder and a managing partner at SCLinx Incorporated. Prior
to starting SCLinx in 2014, he worked at Baker Hughes Incorporated for
thirty-three years including three years as vice president, materials and 15
years as vice president, investor relations.
As an executive with diverse experience both as an investor relations officer and
as a supply chain executive, Gary creates value when he empowers diverse
teams to collaborate to solve a business challenge and deliver results. He
charters teams with the right mix of skilled professionals, clear objectives, and
the right processes, tools and data to succeed at simplifying the problem at
hand and making the very complex comprehensible and manageable.
Gary holds bachelors degrees in Computer Science and Mathematics and MBA in Operations
Management and Management Information Systems from the University of Houston. He lives in Houston
with his wife Kim. They have one son, Sean, a 2014 graduate of Auburn University. In his free time
Gary enjoys University of Houston sports, Auburn football, serving at Bellaire United Methodist Church
and enjoys photography. Gary is also a director of the Texas Southern University Wesley Foundation
and former president of Westbury Little League.
13. Noman Waheed
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Managing Partner
Noman Waheed is a founder and a managing partner at SCLinx Incorporated.
Prior to starting SCLinx in 2014, he worked as a strategy consultant at Accenture
for twenty years and notable is his two years as a vice president, sales and
operations planning at Baker Hughes where he redesigned the planning
organization with new processes, supporting technology and organization.
Mr. Waheed has extensive experience transforming Fortune 100 companies'
supply chains. He has worked in multiple industry verticals but his passion has
always been the energy sector.
Noman's greatest strengths are his knowledge of supply chain and it's application
in the oil field services. He is creative, driven and sought out for his thought
leadership. He thrives on challenges, particularly those that expand the
company's reach. His most recent accomplishment involved creating sales & operations strategy for
Baker Hughes where demand and supply was balanced across all product lines globally.
Noman holds a bachelors degree in Electrical Engineering and masters degree in Electrical Engineering
and Computer Science from University of Illinois. He lives in Houston and in his free time, Noman likes
climbing mountains, long distance bicycle riding and motorcycle touring.