Local needs, Global solution

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Local needs, Global solution

  1. 1. Business Turnaround of Baby Products Manufacturer in Thailand Partha Bhattacharyya Director, Enterprise Consulting JSG Co., Ltd. , Thailand [email_address] SCOR Users Seminar, Denver CO, 27 th Sep 2006 SCOR In Action © JSG Co., Ltd.
  2. 2. <ul><li>Royal Industries (Thailand) Public Company Limited (RI) is a 37-year old Baby Products manufacturer in Thailand, with 800 employees </li></ul><ul><li>RI exports 90% of its own brand and OEM products to EU and US, and has Tier 1 capabilities for Product Development. </li></ul><ul><li>In January 2006, RI was facing imminent threat of closure due to financial instability and operational interruptions from internal and external factors in its supply chain. </li></ul><ul><li>A New RI Management Team took charge with strong focus on Financial and Operational turnaround. The RI Team prepared itself for the challenge. </li></ul><ul><li>JSG was appointed Consultant for IT and Business Process Improvement for RI </li></ul><ul><li>JSG performed a 3-month Business Consulting exercise analyzing, improving and measuring the related business & operating processes….. </li></ul>Introduction & Background
  3. 3. Contents <ul><li>Strategic Issues Summary </li></ul><ul><li>Vision of Rapid Supply Chain Process Optimizer </li></ul><ul><li>The RSCPO Concept & Methodology </li></ul><ul><li>Prototype Demonstration </li></ul><ul><li>Recommendations: Strategic Topics Summary </li></ul><ul><li>Progress of Implementation </li></ul><ul><li>Benefits Realized so far… </li></ul><ul><li>Conclusion </li></ul>
  4. 4. Financial Issues Summary <ul><ul><li>Highly leveraged state, AP>>>AR </li></ul></ul><ul><ul><li>Long order to cash lead time (80 days) </li></ul></ul><ul><ul><li>Non cooperation of suppliers & vendors (due to AP) </li></ul></ul><ul><ul><li>Delayed & incomplete shipment (Supplier non-delivery, QC rejections) </li></ul></ul><ul><ul><li>Quality related issues (Tooling, Lack of visibility of RM standards, manufacturing defects) </li></ul></ul><ul><ul><li>Inadequate capacity utilization (Lack of proper scheduling) </li></ul></ul><ul><ul><li>High supply chain cost (Lack of Bargaining Power due to poor cash-flow) </li></ul></ul><ul><ul><li>Improper Product Costing data </li></ul></ul>
  5. 5. Customer Issues Summary <ul><ul><li>Fail to deliver on time to the customer </li></ul></ul><ul><ul><li>Fail to the deliver the correct quantity </li></ul></ul><ul><ul><li>High rejection on quality </li></ul></ul><ul><ul><li>Lack of full Tier I capability (Engineering, Tooling) </li></ul></ul><ul><ul><li>Lack of Marketing and new product development capability </li></ul></ul><ul><ul><li>Lack of KPI on customer satisfaction </li></ul></ul>
  6. 6. <ul><ul><li>Lack of visibility of operational cost (material, MFG, labor, overhead) </li></ul></ul><ul><ul><li>Cost of non delivery from vendor </li></ul></ul><ul><ul><li>Insufficient in-house injection capacity for components </li></ul></ul><ul><ul><li>No customer order visibility till shipment plan </li></ul></ul><ul><ul><li>Inadequate capacity utilization </li></ul></ul><ul><ul><li>Inadequate raw material availability on time </li></ul></ul><ul><ul><li>Obsolete production scheduling legacy system </li></ul></ul><ul><ul><li>High machine down time </li></ul></ul><ul><ul><li>High non value added activities </li></ul></ul><ul><ul><li>High accumulation of semi-FG/ FG inventory </li></ul></ul><ul><ul><li>High defects/ rejects and scraps </li></ul></ul><ul><ul><li>80% wasted time consumed by the follow up actions as a result of error and problem </li></ul></ul>Operations Issues Summary
  7. 7. <ul><ul><li>Undefined Roles & Responsibility </li></ul></ul><ul><ul><li>Adhoc assignment of the right people to the right job </li></ul></ul><ul><ul><li>Inadequate resource capacity and capability utilization </li></ul></ul><ul><ul><li>Lack of resource development planning </li></ul></ul><ul><ul><li>Lack of resource management planning </li></ul></ul><ul><ul><li>Lack of ability to rotate worker in the production line </li></ul></ul><ul><ul><li>Lack of ability to develop internal resource to fulfill the requirement </li></ul></ul><ul><ul><li>High turn over of skilled and good people </li></ul></ul><ul><ul><li>Low resource productivity as a result of high non value added activities </li></ul></ul><ul><ul><li>Lack of the accountability of business process owner </li></ul></ul><ul><ul><li>Lack of skilled resources for the right job </li></ul></ul>Human Resources Issues Summary
  8. 8. Contents <ul><li>Strategic Issues Summary </li></ul><ul><li>Vision of Rapid Supply Chain Process Optimizer </li></ul><ul><li>The RSCPO Concept & Methodology </li></ul><ul><li>Prototype Demonstration </li></ul><ul><li>Recommendations: Strategic Topics Summary </li></ul><ul><li>Progress of Implementation </li></ul><ul><li>Benefits Realized so far… </li></ul><ul><li>Conclusion </li></ul>
  9. 9. Rapid Supply Chain Process Optimizer (RSCPO) Vision <ul><ul><li>SCOR based innovative tool and methodology to analyze each Supply Chain node ‘Asset’, consisting of: </li></ul></ul><ul><ul><li>Business Processes (Processing Inventory into Throughput) </li></ul></ul><ul><ul><li>Systems (Machines, application software) </li></ul></ul><ul><ul><li>People </li></ul></ul><ul><li>Apply SCOR Best Practices and KPIs to each Asset to optimize: </li></ul><ul><ul><li>Asset Utilization & Effectiveness, for Systems </li></ul></ul><ul><ul><li>Asset Efficiency, for Throughput and Inventory </li></ul></ul><ul><ul><li>Asset Integration, with other Assets. In addition, SCOR KPIs for each individual Asset is linked to overall Supply Chain KPIs </li></ul></ul><ul><li>This approach enables visibility, flexibility and manageability of the supply chain Assets and benefits all stakeholders by imparting industry best practices in improved business processes to achieve ready ROI </li></ul>
  10. 10. Bridging the Disconnect: RSCPO Vision, Mission Business Goals, Scorecards KPI’s Business Process Optimization Best Practices Business Blueprint ‘ Rapid Supply Chain Process Optimizer ’ methodology, provides an automated link between performance measurement criteria and business process improvement applying SCOR best practices. A SAP template-based solution can be configured downstream to achieve ‘Proof of Concept’ of implementing key processes.   The Disconnect RSCPO (using SCOR and Industry Best Practices)
  11. 11. Classic ERP Roadmap 1 2 3 4 5 Project Preparation Business Blueprint Realization Final Preparation Go-live and Support 0 BPR / Best Practice
  12. 12. RSCPO Replaces the First Two Phases 1 2 3 4 5 Project Preparation Business Blueprint Realization Final Preparation Go-live and Support 0 BPR / Best Practice
  13. 13. RSCPO : The New Phase 1 1 2 3 4 5 Business Blueprint Realization Final Preparation Go-live and Support RSCPO
  14. 14. Contents <ul><li>Strategic Issues Summary </li></ul><ul><li>Vision of Rapid Supply Chain Process Optimizer </li></ul><ul><li>The RSCPO Concept & Methodology </li></ul><ul><li>Prototype Demonstration </li></ul><ul><li>Recommendations: Strategic Topics Summary </li></ul><ul><li>Progress of Implementation </li></ul><ul><li>Benefits Realized so far… </li></ul><ul><li>Conclusion </li></ul>
  15. 15. Overview of RSCPO Methodology Measure ‘As-Is’ Process Model 2 Build ‘As-Is’ Process Model 1 Identify Best Practices from SCOR 3 Derive ‘To Be’ Process Model 4 Business Blueprint from Process Change Form 5 Business Goals and Target KPI’s 0
  16. 16. Business Goals and Target KPIs Target KPI’s 0 Management defines Business Goals. Using SCOR and ASAP database, RSCPO enables quick selection of relevant performance attributes and target KPIs.
  17. 17. Build ‘As Is’ Process Model Build ‘As Is’ Process Model 1 RSCPO provides SCOR-standard templates and process segments, which can be dragged and dropped to build ‘as is’ process model Analyze process diagrams for each Asset in the Supply Chain
  18. 18. Process Measurement & Benchmarking RSCPO helps to measure performance of the different Assets in the supply chain. User can use a spreadsheet, or can interface to Simulation Software for faster simulation Measure ‘As Is’ Process Model 2 Measure Performance Supplier A Supplier B MFG C DC D SC Customer Days of Supply Cycle Time Simulate Asset Efficiencies Days of Supply Cycle Time or
  19. 19. Identify Relevant Best Practices RSCPO shows list of SCOR Best Practices and KPIs that can improve business process and measure performance. User selects the ones that are most suitable. Identify Best Practices from SCOR 3
  20. 20. Derive ‘To Be’ Process Model The ‘To Be’ Model is drawn after identifying the required Best Practices. The same is then translated into a simple high-level process diagram, with mapping to relevant SCOR elements Derive ‘To Be’ Process Model 4 High level Process Map with SCOR elements Supplier A Supplier B MFG C DC D SC Customer Link Assets 
  21. 21. Prepare Business Blueprint The Process Change Form generated by RSCPO is used to prepare the Business Blueprint, containing the “To-be” process. This is mapped to SAP or other ERP systems Use Process Change Form generated by RSCPO to prepare Business Blueprint 5 Create SCOR Process Change Form  A listing of each process element in the supply chain with the change that has been identified, estimated benefits (in relation to the metrics to improve) and cost of implementing the change.
  22. 22. Contents <ul><li>Strategic Issues Summary </li></ul><ul><li>Vision of Rapid Supply Chain Process Optimizer </li></ul><ul><li>The RSCPO Concept & Methodology </li></ul><ul><li>Prototype Demonstration </li></ul><ul><li>Recommendations: Strategic Topics Summary </li></ul><ul><li>Progress of Implementation </li></ul><ul><li>Benefits Realized so far… </li></ul><ul><li>Conclusion </li></ul>
  23. 23. <ul><li>RI managed two basic value chains </li></ul><ul><ul><li>Own brand Products </li></ul></ul><ul><ul><li>OEM Products </li></ul></ul>Value Chains Own brand products OEM-products <ul><li>Product BOM planning </li></ul><ul><li>ATP, order confirmation </li></ul><ul><li>Supplier collaboration </li></ul><ul><li>Channel inventory visibility, VMI </li></ul><ul><li>Supply visibility </li></ul><ul><li>Supplier collaboration </li></ul><ul><li>Quick update of demand changes </li></ul><ul><li>Demand-supply management </li></ul><ul><li>Production flexibility </li></ul><ul><li>Short mfg turnaround time </li></ul><ul><li>Bundling services, supply synchronization merge-in-transit </li></ul><ul><li>order visibility, delivery reliability </li></ul><ul><li>wide delivery network </li></ul>Supply Chain Capability Requirements RI coordinated processes PLAN SOURCE MAKE DELIVER PLAN SOURCE MAKE DELIVER RI managed processes
  24. 24. Contents <ul><li>Strategic Issues Summary </li></ul><ul><li>Vision of Rapid Supply Chain Process Optimizer </li></ul><ul><li>The RSCPO Concept & Methodology </li></ul><ul><li>Prototype Demonstration </li></ul><ul><li>Recommendations: Strategic Topics Summary </li></ul><ul><li>Progress of Implementation </li></ul><ul><li>Benefits Realized so far… </li></ul><ul><li>Conclusion </li></ul>
  25. 25. Recommendations: Strategic Topics Summary <ul><li>Reduce cycle times </li></ul><ul><ul><li>Dispute between departments and with suppliers </li></ul></ul><ul><ul><li>Setup In-house injection capacity for components </li></ul></ul><ul><li>Improve cash-flow by improved planning </li></ul><ul><li>Challenge current supply chain structure to optimize cost, service and cycle time </li></ul><ul><li>Where Make-To-Stock is required, implement proper MTS planning systems to avoid manual transactions </li></ul><ul><li>Improve integration with suppliers through collaborative planning, forecasting and replenishment </li></ul><ul><li>Improve integration with channel customers to smooth demand, improve availability, and reduce channel’s working capital </li></ul><ul><li>Improve forecasting and fulfillment processes to avoid ad-hoc processes </li></ul><ul><li>Implement pull-fulfillment both with end consumers and channel partners based on market required lead times and cost requirements </li></ul>
  26. 26. Reduce cycle times <ul><li>Analysis indicated that RI was operating with longer cycle times than key competitors in several parts of the supply chain </li></ul><ul><ul><li>Disagreements between different parts of RI on the ability to ship on time. Unbalanced and improperly scheduled Procurement, Production, Assembly & Packing capacities resulting in incomplete shipment </li></ul></ul><ul><ul><li>Longer cycle time caused by material shortages, peaks in demand, quality issues. </li></ul></ul><ul><ul><li>Material shortages and demand peaks should be addressed by implementing improved planning systems and planning on a collaborative basis, more frequently with suppliers. </li></ul></ul><ul><ul><ul><li>Requires implementation of an advanced planning system such as SAP </li></ul></ul></ul><ul><ul><ul><li>Requires involving suppliers in the planning cycle </li></ul></ul></ul><ul><ul><ul><li>Requires giving suppliers earliest possible warning of demand changes </li></ul></ul></ul><ul><ul><ul><li>Requires direct planning relationship between engineering, sales and suppliers. Need “Available to promise” functionality in the advanced planning system </li></ul></ul></ul>
  27. 27. Reduce cycle times <ul><li>Long cycle times are already built into the process because of built times, ship times and material procurement times </li></ul><ul><ul><li>Either accept long lead times or hold inventory depending on the product range. Where inventory is held, a proper make-to-stock planning system should be used with updates to reflect changes in actual demand at the production centers. </li></ul></ul><ul><ul><li>The existing supply chain structure should be challenged to see if shipment can be achieved at short notice to reduce final assembly and delivery lead times. </li></ul></ul><ul><ul><li>Adopting a postponement strategy means that inventory could be held as module level, not at finished goods level, thereby reducing overall inventory holding for any given cycle time </li></ul></ul><ul><ul><ul><li>It is possible to hold product in module form or in semi-finished state so as to reduce the number of SKUs when compared with finished goods. The demand for modules and semi-finished goods should be smoother and more predictable therefore reducing the requirements for very short cycle times. </li></ul></ul></ul><ul><ul><li>Issues raised during the workshop included: </li></ul></ul><ul><ul><ul><li>out source production to a supplier which has lower overhead or is already outsourcing for other people so that they can afford to have more production capacity at short notice </li></ul></ul></ul><ul><ul><ul><li>simplify the product range so that final assembly is less complex </li></ul></ul></ul>
  28. 28. Improve integration with channel customers <ul><li>Channel customers currently serve their customers either through holding inventory or by ordering from RI as customers place orders on them </li></ul><ul><ul><li>When customers hold inventory they run the risk of obsolescence, and higher costs </li></ul></ul><ul><ul><li>When they order from RI, they run the risk that the lead times they offer are too long for their customers and they run the risk of losing customers </li></ul></ul><ul><ul><li>Collaborative planning, forecasting and replenishment (CPFR) process for main channel customers. </li></ul></ul><ul><ul><ul><li>Requires visibility of the customer’s sales out plus their inventory, normally achieved through an internet-based communications system linked to the customer’s in-house management system. </li></ul></ul></ul><ul><ul><ul><li>In return RI undertakes to maintain superior levels of product availability at the customer level whilst maintaining low levels of inventory </li></ul></ul></ul><ul><ul><ul><li>Forecasting is a collaborative process between RI and the channel customer </li></ul></ul></ul><ul><ul><li>This approach has many benefits: </li></ul></ul><ul><ul><ul><li>improves product availability at the channel customer and therefore increases sales </li></ul></ul></ul><ul><ul><ul><li>reduces working capital in the channel customer’s business, making RI products easier to sell </li></ul></ul></ul><ul><ul><ul><li>provides RI with better intelligence of end sales and therefore increases forecast accuracy </li></ul></ul></ul><ul><ul><ul><li>smoother demand flow & reduces the peak loading on supply chain volumes & costs </li></ul></ul></ul><ul><ul><ul><li>allows proactive marketing of incentives based on sell out rather than sell in </li></ul></ul></ul>
  29. 29. Implement new forecasting & demand fulfillment processes <ul><li>If the supply chain structure is optimized in terms of work centers, assembly centers, inventory holding and lead times, new forecasting and demand fulfillment processes should be introduced </li></ul><ul><ul><li>Existing separation between forecasting, planning and fulfillment identified </li></ul></ul><ul><ul><li>Need capability to forecast at multiple levels and to allow orders to consume the forecast according to business rules </li></ul></ul><ul><ul><li>Reduce the level of manual processes and work-around solutions, making the business smoother and easier to manage </li></ul></ul><ul><ul><li>Better planning to enable rapid fulfillment at short notice as the orders come in </li></ul></ul><ul><ul><li>If it is necessary to hold inventory because of cycle time constraints, the planning system should manage the replenishment of the inventory so that the cost of holding inventory, service levels, manufacturing and distribution efficiencies are all optimized </li></ul></ul><ul><ul><li>Link planning system to suppliers’ systems so as to reduce overall planning cycle time and to allow more frequent planning </li></ul></ul>
  30. 30. Implement new pull-fulfillment strategies <ul><li>Pull-fulfillment strategies both for end customers and for channel customers </li></ul><ul><ul><li>Service level expectations: Currently a blanket 60 days is given, but is this right? Is this what all customers are demanding? What is the optimum time? Define target lead times by product group by market/customer group. </li></ul></ul><ul><ul><li>Implement pull-fulfillment approach for the end customer market based on the right balance of cost and service, closer to the markets within cost constraints </li></ul></ul><ul><ul><li>Implement pull-fulfillment approach for channel customers. If cycle times are short enough, channel customers may be able to eliminate inventory. </li></ul></ul><ul><ul><li>To implement a pull-fulfillment approach, the customer interface should be linked in to “Available to promise” and order tracking functionality, since reliability of lead time is frequently as important, if not more important, as quoted lead time. </li></ul></ul><ul><ul><li>The “available to promise” system should be updated of changes made to supply allocation to customers, & immediately notify changes to agreed delivery dates. </li></ul></ul>
  31. 31. Contents <ul><li>Strategic Issues Summary </li></ul><ul><li>Vision of Rapid Supply Chain Process Optimizer </li></ul><ul><li>The RSCPO Concept & Methodology </li></ul><ul><li>Prototype Demonstration </li></ul><ul><li>Recommendations: Strategic Topics Summary </li></ul><ul><li>Progress of Implementation </li></ul><ul><li>Benefits Realized so far… </li></ul><ul><li>Conclusion </li></ul>
  32. 32. Business Process Improvement Workshop Road Map Conduct Focus Group workshop List and Classify the current issues and concerns As-is KPI Prioritise the change action needs Identify Business Opportunities & Recommend Solutions Identify the change action needs Assess an Issue Status Identify Opportunities Review Enterprise Business Analysis and Validation Business System & processes Business Issue & Root Cause Analysis System Issue & Root Cause Analysis Objectives: Strategy Workshop Transition plan
  33. 33. Business Process Improvement workshop plan Week 1 Week 2 Week 5 Week 6 Review Enterprise Business Analysis and Validation Recommendation Business Process Assessment Week 8 25,27 July, 1Aug 06 20 & 21Jun 06 3, 4, 15,16 Demand Management & Operation Planning 20-July-06 19-Jun-06 10,20 Accounting Cycle & Closing process 28 June, 14 July 06 15 & 16 Jun 06 6,7,9,12 Procurement to Pay 26 June, 19 July 06 13 & 14 Jun 06 5,17,18,19 Order to Cash 22 June, 18 July 06 9 & 12 Jun 06 8,11, 13,14 In-house Production & Capacity Planning Analysis Phase Reviews Phase RI Initiative Ref No. Key Supply Chain Process
  34. 34. Process cycle team are impacted by respective issue Finding of Common Issues           Cannot achieve the target or hit the KPI 10           High turnover (lose skilled people then get unskilled people) 11     Insufficient or inadequate quality, capability, capacity of resource (skilled people, machine, equipment, system, working environment) 9           Lack of visibility, traceability, reliability, transparency both of internal & external process cycle 8   Incorrect information and or unreliable information (Low accuracy and untimely info.) 7           Communication, human, work error 6           Take long lead time, unpredictable expected date & time 5           Inconsistent quantity, quality of work, product, services 4           Wasted time, high unnecessary cost, high defect & rejection 3           High rework, revised, duplicated work, manual work, reconciliation, cancellation, unnecessary work 2           Delay work completion led late response & submission 1 Accounting Demand & Planning Production P2P O2C Impacted process cycle Issues Item
  35. 35. Analysis of Common Root Cause           Business process are not well designed and are not update to support new requirement/issue 10     Unbalance workload, lack of tool to support workload management 9           Internal capacity resource constraints, old machine, people, low reliability of machine, people, unskilled, low skilled, no people/knowledge development, no machine maintenance 8   Inadequate assign and manage the people on the job and Inadequate well manage the employee salary package, benefit and motivation program 7           Old/traditional management style led no strategic and KPI measurement 6           Complexity of work (high dependency, constraint) pressure from external factor 5           People are not strictly follow the process, policy and procedure and lack of the internal control and audit process 4           Lacking of good system support, non-integrated system, No any support tool, system provided to the people 3           Unclear, criteria, policy and direction and or lack of ownership of decision maker 2           People related (inactive, uncommitted, unresponsive, high turn over of skilled resource, human error, communication error, unskilled people) 1 Accounting Demand & Planning Production P2P O2C Cause occurred in the process cycle Root Cause Item
  36. 36. Root cause type led by respective issue Cause Type Analysis of Common Issues           Cannot achieve the target or hit the KPI 10           High turnover (lose skilled people then get unskilled people) 11     Insufficient or inadequate quality, capability, capacity of resource (skilled people, machine, equipment, system, working environment) 9           Lack of visibility, traceability, reliability, transparency both of internal & external process cycle 8   Incorrect information and or unreliable information (Low accuracy and untimely info.) 7           Communication, human, work error 6           Take long lead time, unpredictable expected date & time 5           Inconsistent quantity, quality of work, product, services 4           Wasted time, high unnecessary cost, high defect & rejection 3           High rework, revised, duplicated work, manual work, reconciliation, cancellation, unnecessary work 2           Delay work completion led late response & submission 1 Organization & Com. Culture Policy System Process People Root Cause Type Issues Item
  37. 37. <ul><li>Lose opportunity of cash as a result of long order to cash lead time </li></ul><ul><li>Lose sales opportunities as a result of delay, incomplete, incorrect delivery </li></ul><ul><li>Sales decline led by the decrease of customer satisfaction </li></ul><ul><li>Less profitability as a result of higher cost and under customer claim situation </li></ul><ul><li>Uncompetitive in the market as a result of high operation cost </li></ul><ul><li>Capital Lock up from the high accumulate inventory investment </li></ul><ul><li>Lose customer loyalty </li></ul><ul><li>Lose market coverage and share </li></ul><ul><li>Lose capital utilization opportunity </li></ul><ul><li>Lose product and company creditability, image and reputation </li></ul><ul><li>Lose opportunity of business expansion or new market/product penetration </li></ul><ul><li>Poor business performance and low shared holder value </li></ul><ul><li>Barrier to achieve “Market Leader” position </li></ul>Key Business Impact Caused by the issues
  38. 38. Contents <ul><li>Strategic Issues Summary </li></ul><ul><li>Vision of Rapid Supply Chain Process Optimizer </li></ul><ul><li>The RSCPO Concept & Methodology </li></ul><ul><li>Prototype Demonstration </li></ul><ul><li>Recommendations: Strategic Topics Summary </li></ul><ul><li>Progress of Implementation </li></ul><ul><li>Benefits Realized so far… </li></ul><ul><li>Conclusion </li></ul>
  39. 39. Issue List Process Improvements Implemented <ul><li>Plan: </li></ul><ul><li>Demand management and forecasting process (New) </li></ul><ul><li>Sales & operation planning (New) </li></ul><ul><li>Pricing </li></ul><ul><li>Source: </li></ul><ul><li>Procurement process </li></ul><ul><li>Replenishment planning both of RI and RI’s business partner </li></ul><ul><li>Credit & collection process (cash in & cash out) </li></ul><ul><li>Make: </li></ul><ul><li>New Product Introduction process (NPI) </li></ul><ul><li>Master Production Scheduling process (New) </li></ul><ul><li>Manufacturing Resource Planning process (New) </li></ul><ul><li>Production execution and sales operation execution alignment </li></ul><ul><li>Deliver: </li></ul><ul><li>Order and product allocation management process </li></ul><ul><li>Shipping and transportation thru billing process </li></ul>
  40. 40. Issue List Benefits Realized so far… <ul><li>Order to Cash cycle time of 35 days (down from 80 days) </li></ul><ul><li>Production volume more than doubled, without addl cash-injection for RM </li></ul><ul><li>Sales Revenues up from $0.9m to $1.6m per month, better cash-flow </li></ul><ul><li>90% On-time delivery (shipping) </li></ul><ul><li>50% reduction of FG Inventory through Sales ($3m) </li></ul><ul><li>100% reduction in obsolete semi FG Inventory through scrap sales </li></ul><ul><li>JIT Procurement of Silicone and Pigments (Supplier collaboration) </li></ul><ul><li>Acquired 50% in-house injection capacity </li></ul><ul><li>Reduction of Suppliers’ AP by 70% (currently at 45 days) </li></ul><ul><li>Individual Project Teams dedicated for each Customer Group from Sales Order through Delivery Processes </li></ul><ul><li>Recruitment of Engineering and Tooling team </li></ul><ul><li>Implementing New SAP system </li></ul><ul><li>Financial Restructuring with Private Equity in progress </li></ul>
  41. 41. Contents <ul><li>Strategic Issues Summary </li></ul><ul><li>Vision of Rapid Supply Chain Process Optimizer </li></ul><ul><li>The RSCPO Concept & Methodology </li></ul><ul><li>Prototype Demonstration </li></ul><ul><li>Recommendations: Strategic Topics Summary </li></ul><ul><li>Progress of Implementation </li></ul><ul><li>Benefits Realized so far… </li></ul><ul><li>Conclusion </li></ul>
  42. 42. Conclusion <ul><li>Supply chain and related strategic opportunities were utilized RI’s operational performance. </li></ul><ul><ul><li>Potential to restructure the supply chain </li></ul></ul><ul><ul><ul><li>Pull manufacturing, streamline inventory holding </li></ul></ul></ul><ul><ul><ul><li>BTO/BTS balance </li></ul></ul></ul><ul><ul><ul><li>lead-time reduction </li></ul></ul></ul><ul><ul><li>Policy and process changes </li></ul></ul><ul><ul><ul><li>Emphasis and support for forecasting, demand management, and customer management </li></ul></ul></ul><ul><ul><ul><li>Fulfillment policies consistent with forecasted demand and to allocation </li></ul></ul></ul><ul><ul><ul><li>Sharing information and collaboration with channel partners and key suppliers </li></ul></ul></ul><ul><ul><ul><li>Product management strategy and clear supply strategy </li></ul></ul></ul><ul><ul><ul><li>Monthly inventory planning </li></ul></ul></ul><ul><ul><li>System changes </li></ul></ul><ul><ul><ul><li>Application of SAP to enable collaboration effort, ATP, and other constraint planning requirements </li></ul></ul></ul><ul><ul><li>Stakeholder commitment and KPI </li></ul></ul><ul><ul><ul><li>KPIs that holistically measure and are aligned to corporate targets </li></ul></ul></ul>
  43. 43. <ul><ul><li>For further information: </li></ul></ul><ul><ul><li>Contact Us: www.jsg.co.th </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Harvest & </li></ul></ul><ul><ul><li>Flourish! </li></ul></ul>Identify & Plan <ul><ul><li>Deploy & Change </li></ul></ul>Thank You

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