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Applying Data-Driven Techniques for Supply Chain Excellence

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Applying Data-Driven Techniques for Supply Chain Excellence

  1. 1. CONFIDENTIAL Information contained in this report is strictly confidential and may be subject to legal professional privilege. It is the exclusive property of Orica Limited, and is solely for Orica Limited internal use. No part of it may be circulated, copied, quoted or otherwise referred to without prior written approval of Orica Limited. Applying DataApplying Data--Driven Techniques forDriven Techniques for Supply Chain ExcellenceSupply Chain Excellence Lean & Six Sigma Summit Chicago, IL April 29- May 2, 2008
  2. 2. Page 1 April 2008 © Steve Lesser Orica Mining ServicesOrica Mining Services Parent company- Orica Limited publicly traded on ASX Top 40 ASX company 14,000 employees in around 50 nations across six continents Headquarters Corporate- Melbourne Regional- Denver, Santiago, Troisdorf, and Sydney Business units Orica Mining Services- largest, global entity Orica Consumer Products Chemnet Chemical Services Minova
  3. 3. Page 2 April 2008 © Steve Lesser Orica Mining Services: Supply ChainOrica Mining Services: Supply Chain Two main supply chains- chemical (ammonium nitrate) and assembly (initiating systems)
  4. 4. Page 3 April 2008 © Steve Lesser Orica Mining Services: Global Supply Chain OrganizationOrica Mining Services: Global Supply Chain Organization Global Manufacturing and Supply Chain Leader Global Manufacturing and Supply Chain Team One Global Supply Chain Leader Four Regional Supply Chain Leaders Two Global Product Line Manufacturing Leaders- Ammonium Nitrate and Initiating Systems Management philosophy Drive standards particularly in systems, processes, and people Quarterly face to face reviews Monthly global Sales & Operations Planning conference calls Challenges Time zones: 2 pm Denver conference call equates to 4 pm Santiago, 10 pm Troisdorf, and 6 am Melbourne One Orica global desire, but regional GM model accountability Regulatory environment driving towards regional manufacturing Alaska supply chain example
  5. 5. Page 4 April 2008 © Steve Lesser Driving Change in North AmericaDriving Change in North America Objective in January 2006 Baseline current capability Set vision of future state Develop deployment strategy Phase 1- build structural foundation using SCOR basic principles Phase 2- institute change management methodology through Lean Six Sigma implementation Phase 3- accelerate project delivery Educate stakeholders Communicate progress throughout focusing on delivering financial results in each phase
  6. 6. Page 5 April 2008 © Steve Lesser Driving Change: Baseline Capability & Set VisionDriving Change: Baseline Capability & Set Vision Optimally utilized SAP Critical processes enabled by interfaced, hosted supply chain tools Clear supply chain architecture Data warehouse Global SAP Ad-hoc bolt-ons Dependency on Notes databases No supply chain architecture map Limited access to data, but improving via new reports Systems Six Sigma driven process work aligned to business strategy and bottom line impact Set documentation infrastructure SCOR standardization Visible metrics with targets and corrective action Spot process work Limited, formalized documentation Limited standards No set continuous improvement methodology Spot use of metrics Process Stable cross trained workforce Supply chain trained and certified team members Bench strength including active campus recruiting for entry level roles Monthly leadership team forum Constant churn leading to team with less than one year in current role Limited external supply chain expertise Battling negative perception Solid mining industry experience People Future StateCurrent State
  7. 7. Page 6 April 2008 © Steve Lesser Driving Change: Baseline Capability & Set VisionDriving Change: Baseline Capability & Set Vision 5= solid, sustainable year over year improvement 4= increasing improvement 3= stable progress 2= sustainable action started 1= one-time improvements 0= non-existent - 1.00 2.00 3.00 4.00 5.00 Baseline Sep06 Sep07 Future Systems Process People
  8. 8. Page 7 April 2008 © Steve Lesser Driving Change: Deployment StrategyDriving Change: Deployment Strategy-- SCOR AlignmentSCOR Alignment Balance resources with requirements and communicate plans Schedule inbound deliveries, warehouse management, and transportation management Identify and select supply sources Schedule production, issue product, produce and test, package, stage product, and release to deliver All order management steps Schedule outbound deliveries, warehouse management, and transportation management All return defective, MRO, and excessive product steps for both source and deliver processes Within Scope? YES YES NO YES YES PLAN SOURCE MAKE DELIVER PLANRETURN Supply Chain Operations Reference Model
  9. 9. Page 8 April 2008 © Steve Lesser Driving Change: Deployment StrategyDriving Change: Deployment Strategy-- SCOR AlignmentSCOR Alignment PLAN SCOR Processes (MAKE- under manufacturing organization) DELIVERSOURCE ENABLE Steve Lesser Vice President, Supply Chain Glenn Watt Logistics Director Nancy Bilodeau Client Services Manager Lewis Greig Compliance ManagerRoyden Brown Planning Director Sandy Rudolph AN Procurement Director Sebastien Pichette Procurement Director Open MBB Lean Six Sigma Kevin McBride Supply Chain Program Manager
  10. 10. Page 9 April 2008 © Steve Lesser Driving Change: Deployment StrategyDriving Change: Deployment Strategy-- Lean Six SigmaLean Six Sigma Why Lean Six Sigma? Methodology to drive improvement in cost, quality, capital, and lead- time through identification and correction of the activities that cause our customer’s critical-to-quality issues and create the longest time delays. LeanFocus SixSigmaFocus Lean Six Sigma Shorter Delivery Times Improved Product Quality Lower Product Costs
  11. 11. Page 10 April 2008 © Steve Lesser Driving Change: Deployment StrategyDriving Change: Deployment Strategy-- Lean Six SigmaLean Six Sigma Five major work streams identified Growth/Acquisitions Integration Optimize Supply Chain Trade Working Capital Improvement Lean Manufacturing Global EBS Manufacturing First wave of Black Belts with Green Belts nominated to five specific projects in addition to the Global EBS trained resources Initial Training Plan Black Belt training concluded in February 2007 Green Belt training in USA concluded in November 2006 Green Belt training in Canada concluded in January 2007 Second wave of Black Belts with Green Belts nominated for early January 2008 start and training
  12. 12. Page 11 April 2008 © Steve Lesser Driving Change: Deployment StrategyDriving Change: Deployment Strategy-- Accelerate Project DeliveryAccelerate Project Delivery BusinessNeed Productivity- Hard Productivity- CostAvoidance Risk Management Infrastructure Time-Duration Required Resources Change Management Implementation Costs Percentage Complete Goal Link Project Six Sigma 15 15 5 15 10 5 5 5 10 15 Total Owner Supply Chain and Six Sigma Project Listing Strategy Execution Weighted Value With foundation set and change management methodology in place, the focus shifts to project prioritization and delivery Projects ranked based on strategic benefit and execution
  13. 13. Page 12 April 2008 © Steve Lesser Driving Change: Educate StakeholdersDriving Change: Educate Stakeholders E =E = ff (Q x A)(Q x A) The Effectiveness of any initiative in achieving results, is a function of the Quality of the technical solution times its Acceptance within the culture. Organizational Effectiveness Model
  14. 14. Page 13 April 2008 © Steve Lesser Driving Change: Communicate ProgressDriving Change: Communicate Progress FY07 target= Mobility Project delivered FY07= FY07 target= USD FY07 stretch= USD System ImplementationNorth America Supply Chain Productivity Initiatives TMS launched FY07=Forecast FY07= USD FY06= USD* Current Month= YTD= Net Promoter Score YTD Savings/Costs= TBD FY07 target= % YTD NA adoption= % FY07 target= % Lean Six Sigma DeploymentS&OP YTD Trained BB/GB= FY07 Target= YTD Global mtgs= FY07 target= FY07 target= (budget) FY07 stretch= Inventory Turns FY07 target= % (budget) FY07 stretch= % FY07 target= FY07 stretch= Supply Chain Fixed Costs/Gross Margin (FY07 + Upton, AN Consulting, & more Global Procurement - Compliance) Category 2+ Distribution Incidents Creative Customer SolutionsWorking Together Feb07= FY06= YTD= % FY06= % YTD= FY06= Commercial OwnershipSafety, Health, & Environment
  15. 15. Page 14 April 2008 © Steve Lesser Weekly Monthly Quarterly Annually BB Coaching With MBB Coach 4 Block Report Updated (sent to Steve, MBB Coach, & Sponsor) Driving Change: Communicate ProgressDriving Change: Communicate Progress 4 Block Report Updated Top 10 excl Six Sigma (sent to Steve) NA Training & Project Sharing (Training or Conf Call) Global Best Practice Sharing Conf Call NABT Leadership Update- BRR Lean Six Sigma Supply Chain Combined NA Supply Chain Sub-process Leader Coaching with Steve NA Supply Chain Leadership Conf Call NA BB/MBB Best Practice Sharing Forum NA Supply Chain Leadership Forum (start 2007) Six Sigma Annual Global Conference NA Supply Chain Annual Conference (under review) NABT Leadership Update Global S&OP Conf Call (Steve only) NA Executive S&OP M&SC Global Conf Call (Steve only) M&SC Global Leadership Forum (Steve only) NA Leadership Conference (as approved) EBS Leadership Conf Call (Steve only) NA/Global Procurement Conf Call
  16. 16. Page 15 April 2008 © Steve Lesser Maintain Control while Delivering ProductivityMaintain Control while Delivering Productivity Driving change will yield the productivity improvements, but safety cannot be compromised in the explosives industry No injuries to anyone, ever The brass ring and the underground mine Risk Management techniques are employed to identify gaps and projects to reduce the gaps Example- ammonium nitrate prill delivered in railcars
  17. 17. Page 16 April 2008 © Steve Lesser Seal and locking policy obviously not effective due to the condition of the railcar gates Pictures to be inserted for presentationPictures to be inserted for presentation
  18. 18. Page 17 April 2008 © Steve Lesser Maintain Control while Delivering ProductivityMaintain Control while Delivering Productivity Texas City Disaster- April 16, 1947 Two freighters, Grandcamp and High Flyer, full of ammonium nitrate fertilizer destined for war torn Europe caught fire and exploded sixteen hours apart. Almost 600 dead; 3,500 injured Worst industrial disaster in American history Pictures to be inserted for presentationPictures to be inserted for presentation
  19. 19. Page 18 April 2008 © Steve Lesser Maintain Control while Delivering ProductivityMaintain Control while Delivering Productivity
  20. 20. Page 19 April 2008 © Steve Lesser Maintain Control while Delivering ProductivityMaintain Control while Delivering Productivity AFTER BEFORE Pictures to be inserted for presentationPictures to be inserted for presentation
  21. 21. Page 20 April 2008 © Steve Lesser Questions?

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