Shutterfly Demand Planning

1. Planning Process
APRIL 09, 2015
Provide current state and future state of planning tasks. This
document can be used as a reference for improvement projects
and training.

2. 2
• Planner Responsibilities
• Required Tools & Reporting
• Planning Process Map
• Breakdown of Each Planning Process
o Oracle Standard Process
o Problem Statement
o Current State
o Future State
• Commodity Intricacies
• Q&A
Table of Contents

3. 3
• Weekly Review
o Material Forecast at Network/Supplier Level
o Drive and implement new product, op’s, ERP, and internal project initiatives. Update JIRA accordingly
• Quarterly Review
o E&O Evaluation
o Item Clean-up: Inactivate items, material transition plans, partner/site transitions
o Material Forecast at Site/Partner Level
• Update Min-Max
• Set-up Blanket Quantities
• Bi-Annual Review
o Standard Cost Update
o Audit Reporting: Network Inventory, S&OP, COGNOS
o Audit Planning File and update details (Material list, planning %, etc.)
• Annual Review
o BOM Audit/Updates
o Complete Supplier Scorecards
o Negotiate Contracts
• Adhoc
o Improve and/or develop reporting and tools
o Review and improve existing product lines
o Complete cost-savings projects
o Root-cause Network Shortages/Stock-outs
Planner Responsibilities

4. 4
• COGNOS [OMS & Lab (only Pasadena)]/MicroStrategy [MyPub]
o All brands need to utilize same tool and format – currently Oracle data not in data warehouse (few self-service
options)
o TL needs to be assigned to each product for easier reference (need standardized product hierarchy and
common language across tools – forecast SKUs should map to production SKUs)
o Improved product to raw material mapping
o Data is provided in a table format vs pivot (MicroStrategy has pivot capability and better excel add-in)
• Tool extraction for COGNOS data
o Planners have to create special tools in excel to extract COGNOS data into meaningful information
• Commodity Forecast File
o Varies between planners
• Consolidated FCST upload
o Tool in development to load item level forecast into Oracle
• S&OP
o Missing products, hierarchies, and may contain inaccurate forecast data. This can create issues when flowing
information into Oracle
• Network Inventory
o Supplier & Partner inventory need to be uploaded into Oracle. Currently updated manually in an excel
spreadsheet
• Historical Transactions
o Missing Partner historicals
• Material Transitions File
o Currently tracked in Excel. No way to track material transitions in Oracle. Need a way to block release of new
material until old material is fully exhausted
Required Tools & Reporting

5. 5
• BOM Management
o Developing tool outside of Oracle
o Oracle BOM management is cumbersome
• Dynamic data: planning % change throughout year to reflect seasonality
• Cannot control material transitions, and updates are difficult (-01 to -02)
• See ‘BOM Training’ file for additional issues
• Material Specifications Database
o Currently SFLY does not have a solid database that includes drawings, or material specifications
• Supplier Metrics
o All supplier metrics are subjective. No singular reporting exists to track issues such as OTD, MRB,
receipt issues, PPV, ect
• Contract Database
o Procurement needs access to database
• JIRA
o Continue to customize based on growing requirements
• E&O
o Missing partner historicals. Need better forecast at item level.
• Forecast to Actuals
• Standard Cost Update File
• Cost Savings Tracking
Required Tools & Reporting Cont.

6. 6
Current Standard Planning Process (SOP)

7. 7
Process Review (PR)
PROCESS STEPS
DEFINED

8. 8
PR: Define Product Forecast
o Oracle Standard Process
• Create new TL. Load S&OP forecast by TL into Oracle
o Problem Statement
• FCST load is time consuming, difficult, and easily errors out. Forecast cannot be
viewed at a TL Level. Forecast is not utilized once entered into Oracle.
• Forecast is not always broken out into usable sections. Ex. Wall Art is one line, vs
being broken out by the 10 sizes.
• TL may not be assigned in S&OP. Or product is missing entirely or accurate forecast
is not loaded into S&OP
o Current State
• TL is assigned, and FCST is pulled direct from S&OP into the individual planner files
• Regular audits by planning team to identify missing S&OP data/assignments
o Future State
• When uploading into Oracle, explore using mass upload tool
http://more4apps.com/
• Create Hierarchy in S&OP so Finance can forecast at top/primitive level and
planning can break it down into usable sub-hierarchies.

9. 9
PR: Qualify Raw Materials
o Oracle Standard Process
• Use Item Master to attach all relevant data
o Problem Statement
• It’s a pain to go into each item to pull needed data.
• There is no single source for referencing drawings/specs
o Current State
• Specs are maintained per each planners discretion.
o Future State
• Working on a database solution

10. 10
PR: Item Set-up
o Oracle Standard Process
• Use Excel to upload new items into Oracle
• Use quoting module to submit RFQ’s to suppliers and maintain old
quoting data
o Problem Statement
• No consistent naming convention for items
• No database exists for quotes.
• Quoting module not currently available. Additionally this module is
time consuming to maintain.
o Current State
• Quotes are maintained per each planners discretion.
o Future State
• No fix defined

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PR: Define Allocations/Routing
o Oracle Standard Process
• Routing loaded manually into Oracle.
o Problem Statement
• Routing is not well maintained and requires manual review to confirm
items are routing as expected
o Current State
• Lab splits are defined in S&OP forecast file per capacity plan. Planning
files apply splits manually in excel (linked to S&OP)
• Actual order routing managed manually in separate tool to
implement planned capacity plan (lab splits) –currently cannot run
simulation, discrepancies are tracked after the fact (Cognos OMS
Fulfiller split vs. S&OP Lab Split) and routing settings are “tweaked”
ad-hoc to try to align to plan.
o Future State
• No fix defined

12. 12
PR: Define Planning % and Inverse Usage
o Oracle Standard Process
• Information is manually put into Oracle BOM’s
o Problem Statement
• Requires pulling COGNOS data and manually manipulating the data
into a usable format
• Data becomes stale quickly given the dynamic environment and
changes in customer preferences
o Current State
• Use COGNOS data to manually calculate
o Future State
• Investigate new technology options

13. 13
PR: Define Waste/SS%
o Oracle Standard Process
• Information is manually put into Oracle BOM’s
o Problem Statement
• Requires pulling COGNOS data, forecast, and usage and trying to
determine the waste metrics. Based on the current information, it’s
difficult to tell what is actual waste, and the cause of that waste
o Current State
• Use COGNOS data to manually calculate
o Future State
• Investigate new technology options
• Track actual material usage (linked to an order/sub-batch) at each lab
through an enhanced production system (Unity)

14. 14
PR: Update Planning File/BOM Management
o Oracle Standard Process
• Manually update each BOM for each Org
o Problem Statement
• BOM’s are time consuming to maintain (Every org)
• Does not take into consideration seasonality
• Material transitions are difficult to manage
• Breaking out different BOM’s for HighSpeed, TPS, and Partners
o Current State
• No BOM currently exists. Each planner maintains theirs individually as
needed
o Future State
• Create individual commodity tabs that load into Access and push out
an excel pivot table that can be used to see all elements on a BOM

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PR: Calculate Material Forecast
o Oracle Standard Process
• Update BOM in Oracle
o Problem Statement
• Forecast cannot be viewed at a TL Level, so new items must be put
into excel and calculated manually
o Current State
• Updated as needed in each Planners file
o Future State
• No Fix defined

16. 16
PR: Combine Material FCST for all Items
o Oracle Standard Process
• Load S&OP forecast by TL into Oracle. BOM’s and item set-ups then
breakout the need by each component. ASCP can then be utilized by
Buyers to easily capture lows and highs in material need
o Problem Statement
• FCST load is difficult and easily errors out. Usage of forecast requires up-
to-date BOM’s and item set-ups, which are cumbersome to maintain
o Current State
• TL is assigned, and FCST is pulled direct from S&OP into the individual
planner files. Planners consolidate material in pivot table and plan
accordingly. Buyers use min-max to cover day-to-day operations with
planner input on promotions.
o Future State
• Planners will continue to create their forecast independently in excel, but
then load the weekly forecast by item into Oracle. This will allow buyers
to utilize ASCP

17. 17
PR: Forecast vs Usage
o Oracle Standard Process
• To view historicals, you can enter parameters for each item
individually
o Problem Statement
• Looking up individually is time consuming
• No access to sales history within Oracle
• No access to partner usage. Information provided usually inaccurate
o Current State
• Developed a transactions report that shows a rolling usage. Validate
against COGNOS data
• Request partners send usage data
o Future State
• Use as is

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PR: Item Set-up, Define Min-max
o Oracle Standard Process
• Manually load Min-max into each org
o Problem Statement
• Need improved reporting that showcases when min-max levels need
to be increased/decreased based on trending usage
o Current State
• Manually calculate min-max needs in excel
o Future State
• No fix

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PR: On Hand Inventory
o Oracle Standard Process
• Lab on-hands available vis sub-inventory report
o Problem Statement
• No access to supplier and partner on-hand levels
o Current State
• Manually maintain in the Network Inventory File on a weekly basis
and build into planners.
o Future State
• Partners/Supplier upload their on-hands, WIP, and inventory on order
into Oracle directly

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PR: Material Replenishments
o Oracle Standard Process
• Oracle provides ASCP to define requirements
o Problem Statement
• Requires an up-to-date forecast, accurate BOM’s, and perfect item
set-ups
• Dual-sourced suppliers, would need to account for allocations
o Current State
• Use min-max for ordering purposes. Manually calculate supplier
needs in excel and communicate via e-mail.
o Future State
• If all on-hands are in the system, and the forecast is loaded by item,
we should be able to pull network need

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Process Review (PR)
COMMODITIES DEFINED

22. 22
Books
o Shutterfly and My Pub sizes / year
• 8x8 = 2.8mm
• 8x11 = 2.25mm
• 10x10 = 550m
• 12x12 = 500m
• 11x14 = 200m
o Covers include Hard, Soft, Leather, Cloth, Premium Leather, Silk
• Hard is about 85% of volume. Soft only available in three small sizes
• Leather and Cloth also called De-boss and are pre-fabricated
• Premium Leather and Silk are Lay Flat only, and have five spine widths
o Hard Cover book commodities include Panel Board, Laminate, &
End Sheets and are not complex to plan.
o Leather, Cloth, Premium Leather and Silk require more effort
o Misc Items include Slip Cases, Fly Sheets, Spine Wrap & Flex Spine

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Consumables
o Breaking out planning percentages by product

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Envelopes
o Seasonality
o Bundles

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Gifts
o Photo Gifts and Home Décor is our fastest growing segment
o Shutterfly outsources most production to fulfillment partners
o Strategic initiative to insource gifts and increase profit margin
o Currently we manage supply for internally produced gifts
• Canvas Gallery Wrap and Framed = 250m
• Desk Art = 500m and Mouse Pads = 400m
• Phone Cases = 200m and Charger Device = 20m
• Playing Cards = 50m and Puzzels = 100m
• Magnets = 1.75mm and Metal Ornaments = 350m
• Luggage Tags = 350m and Stainless Steel Mugs = 150m
o Manage supply and own inventory for fulfillments partners
• Acrylic Blocks = 15m, Desk Calendars = 350m, Lunch Bags = 20m,
Candles = 40m, Framed Wall Art = 10m, Glass Ornaments = 100m

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Packaging
Dependencies & Intricacies:
o Everything has a box
• Packaging touches every product. Every new product, and existing products, have
to be reviewed for the most efficient packaging
• Packaging touches all the manufacturing partners, as well as, the lab sites
o Seasonality
• Card order size increased during Q4. Bulk for gift items as well. There is a wide
variety in packaging usage throughout the year because of it
o Planning
• Each product has multiple boxes. This required figuring out how often each box is
used based on max fills, and average order size
o Dual-Sourced Items
• Some suppliers source the same product one at each facility. The same supplier
can source one product at all facilities. It’s difficult to break out forecast in Oracle
by supplier and not just by facility.
o Packaging Matrix
• A separate packaging matrix indicating products and their max fills must be
maintained for production reference and for lab engineering to build weight verify
coding

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Paper
Dependencies & Intricacies:
o Cards & Stationary
• Customer preference (i.e. Signature Matte, Pearl, Gloss, Textured, etc.)
• Lab workflow & press (i.e High Speed line = iGen, Small batch TPS = Indigo or HP 10K) –
press dependent on capacity plan & routing
• Sheet size (i.e. iGen = 20.5”x14.33” or 14.33”x12”, Indigo = 18”x12” or 19”x13”, HP 10K =
20.8125” x 29.5”) – sheet size dependent on press & card form factor
• Card Size & Sheet size combination will determine quantity up
o Photobooks
• Customer preference (i.e. hard cover, softcover, layflat, glossy pages, etc.)
• Lab press (all considered “high speed” but could go through roll fed Indigo, sheet fed Indigo
or iGen) – dependent on form factor, workflow & capacity plan- no easy way to validate
• Sheet/Roll size (i.e. Indigo roll = 13.5" x 12,300‘ or 12.5”x25,855’, Indigo sheet = 20”x28”
(10K) or 18.5”x12.5”, iGen = 20.5”x14.33”, 24”x14.33”, 14.33”x12” or 12.5”x18.5”)
• Book size, sheet/roll size, average page count and bind type will determine quantity up
o Complexity
• Routing, press splits & customer preferences are dynamic and difficult to track
• OMS (actual orders) data, Oracle data and Production data not linked (all managed in
separate systems) – must make assumptions and align/ link manually
• Dependencies difficult to build into Oracle Planning BOM the way it is currently set-up
For more detail, please reference:

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The End
Q&A