Thomas L. Dadmun, ADTRAN - Speaker at the marcus evans Manufacturing COO Summit, held in Las Vegas, NV, delivered his presentation entitled Business Intelligence and Analytics: A Command and Control Center for Supply Chain Excellence

1. Business Intelligence and Analytics:
Command and Control Center
C d dC t lC t
for the Chief Supply Chain Officer
Tom Dadmun
VP, Program Management Office

2. Session Agenda
ADTRAN – The Network Access Company
p y
Challenges Abound!! In today’s ever changing business landscape
RCA – Root Causal Analysis – What is the Problem
The Vision – Research & Benchmarking “ Best In Class “
Establishing Proof Points, Gaining Mindshare
Incorporating BI into the Culture / DNA of the company
Lessons Learned – Take Aways

3. Corporate Statistics
• FY2011 Revenue: $717 Million
• Large established Presence in Telecom
g
Equipment Industry
• Employees: ~1,800 total
• Headquarters: Cummings Research Park,
Huntsville, Alabama
• Sales offices around the world
• In‐house and outsourced manufacturing
• Long Term Financial Strength

4. Broadband
Mobility Demand Is Exploding
5B Mobile Phones Globally
Smartphones Are Pervasive
True Mobility Is No Longer A
Convenience Mobility
– Voice over Wi-Fi, Facetime
New D i
N Devices R l O Wi l
Rely On Wireless
Connectivity
Cloud
– iPADs
Mobile Data Traffic Is Growing
Exponentially
Wi-Fi Data Offload To Fixed
Network Is Necessary

5. Challenges Abound in Today’s Economy
• Significant Growth in telecom industry
• Government programs for BBS Broadband Stimulus
• E
Economy overall staggers ahead
ll t h d
• Forecasting with historical algorithms??
• Suppliers, subcontractors, manufacturing, customers!!!
• In a recession you have frantic competition

6. Current Landscape of Problems
• Current data everywhere – spreadsheet mania
• The old “ islands of information “ still exist
• How do you collaborate with disparate information?
• Spaghetti systems – Where’s the data?
• 80% - 20% Rule Reversal

7. Problem Statement
• Lack of ability to q
y quickly py provide
visibility into near time data
• Unable to quickly manage the
business,
business through KPI’s transactional
KPI s,
reporting and analysis.

8. And… Get the Data Right!
• Multiple documented studies
p p
show Spreadsheets are prone
to errors
– KPMG found 91% of 22 spreadsheets
taken from an industry sample
taken from an industry sample
contained errors.
– Olson & Nilsen found a 21% cell error
rate among experienced spreadsheet
t i d dh t
users.
– The University of Michigan found an
11.3% cell error rate among
inexperienced spreadsheet users.

9. The current business infrastructure provides limited visibility & synchronization
Th tb i i f t t id li it d i ibilit & h i ti
Suppliers Manufacturing Divisions Channels End Customer
Distributors
Carriers
CN
Subs
S b ADTRAN
Enterprise
EN
Distributors
VARs

10. Suppliers Manufacturing Divisions Channels End Customer
Supply Chain Planning Distributors
Carriers
CN Order Allocation & Promising
Supply Collaboration
S l C ll b ti ADTRAN
Demand Planning
Collaborative Sourcing EN Enterprise
Distributors
Transportation Mgt. Demand Collaboration
& Optimization
Ingram
VARs
Executive Business Intelligent Dashboard

11. Quotes worth mentioning……
“ If the rate of change inside your
“ If h f h i id
organization is slower than the
g
rate of change outside……..
the end is near”
Jack Welch
Jack Welch

12. Due Diligence
• Evaluated 8+ vendors, narrowed field down to two:
– Feature & functionality matrix comparison
• Engaged Industry Experts for Analysis
– Aberdeen, Gartner, Forrester and others
• C d t d
Conducted on site benchmark visits:
it b h k i it
– Vanderbilt University , Alabama Farmers Cooperative
• Reference Concalls
Reference Concalls
– Cisco, Alcatel –Lucent
• Academia
– Georgia Tech, UT, UAH

13. Analyst Ratings – Ab d
A l t R ti Aberdeen Group
G

14. Process Methodology
• Conducted demos to cross functional user group of 20
g p
members
• Presented business assessment of BI toolset to Steering
Committee
C itt
– Business Case
– ROI
– Expected Results
– Timeline
– Measurement Criteria
– Program Management Reviews
– Contingencies

15. Quotes worth mentioning……
"There is nothing more difficult to take in
hand,
more perilous to conduct,
or more uncertain in its success,
than to take the lead in the introduction of a
new order of things"
things
Jean Jacques
Jean-Jacques Rousseau

16. Return on Investment
Solutions reviewed had costs including:
g
Initial Investment
Implementation Costs
Ongoing Service Costs
Ongoing Service Costs
Training Costs
• This would support up to 175 users.
• Based on anticipated cost savings, a 142% ROI will be
realized in year one. (7.1 month payback)
• IT savings alone will be approx. $150K. Individual
l ll b $ d d l
departments could pay for their own licenses based
on their own projected usage / savings
on their own projected usage / savings

17. Benefits / Risks
B fit / Ri k
Benefits:
– Abstracts reporting from underlying database allowing for easier
plug in to different applications. (e.g. new ERP)
– Ability to understand rearrange and dig into results on your
understand,
desktop
– Provide a single data point for all metrics, eliminate need for re-
working numbers through Excel
Risks:
– Oracle Portal is nearing EOL.
– All reports will have to be rewritten if we replace/upgrade Baan
– Excel is prone to mistakes and consistently p
p y provides different
values from different perspectives.

18. Anticipated Cost Savings
Number of hours spent each week running reports and hand
processing in Excel that could be saved each week:
Functional Area Hrs / Week
7 Departments 102.98
In addition up to 80 hours/week could be saved developing
custom reports in IT
That is potentially 4.73 people or $355K / year

19. Project Milestones

20. ADTRAN’s Hierarchy of Supply Chain Metrics
Demand Visibility
Demand Visibility Forecast
Accuracy
Performance Tradeoffs On Time
Delivery
SC
Cost
Inventory Revenue Margin
Supply Chain
Performance Turns /
S&OP Capacity Headcount
DOS
Management
Inv. Logistics Mat’l % of Cycle Count Mfg.
Aging Spend Revenue Accuracy Cycle
Time
Inventoryy Weeklyy Purchase Negotiated
g RM/FG DC OTD
Operational Projection
Accuracy
Freight
Spend
Price
Variance
Savings Efficiency Root Cause
Effectiveness
Contract Quarterly Turnkey vs. NPO Open Material Planned Build
Manufacturer Material $’s RMS % Requisitions P.O. OTD FG Plan
Performance Spend Deliveries

21. Roll out - Deployment
Phase one
Ph
Sales Portal
Executive Dashboard
Executive Dashboard
Supply Chain Analytics
Operations
O ti
Procurement
Planning / Forecasting
Planning / Forecasting
S&OP Meetings
Finance
BOD Presentations

22. Quotes worth mentioning……
“ There is nothing so useless as doing
efficiently that which should not be
done at all
done at all”
• Peter Drucker

23. Phase Two - Prioritization
• Manufacturing
• Q
Quality
y
• Inside Sales
• Transportation
• Treasury
• Cost Accounting
• Human Resources
• Marketing

24. Results
• IT department stated that the project was able to
reduce the effort by 50% on 10 people who spent
40% of their time currently developing reports.
• In accounting and operations, it was identified that
100 hours per week was saved amongst early
adopters.
• With this success and the momentum growing we
expect to utilize this tool across the entire enterprise.

25. Wrap Up
• Normal “behavioral change” hurdles to
l “b h l h ” h dl
overcome
• Training methodology needs to be managed
g gy g
• Consistency versus “Out of Control!”
Consistency versus Out of Control!
• Champions emerge

26. Thank you
y
Tom Dadmun, VP, PMO
ADTRAN
256‐963‐6872
Tom.dadmun@adtran.com