SCL HUB February 2017

1. Supply Chain Excellence (SCE)
SCL Hub
London, February 1st, 2017
Ton Geurts

2. Content
Introduction Bekaert
SCE Why
Yield and motivation
Pilots
SCE What
Scope
Final state targets
Roadmap
SCE How
Operations: 3 aligned functions
Proposed organization
Global programs
SCE 2017
Dashboard
Key success factors
SCE Conclusions
2

3. Introduction Bekaert
3
- Founded in 1880 by Leo Leander Bekaert in Zwevegem, Belgium
- Customers in 120 countries and in the most diverse industry sectors
- Global manufacturing platform
- 30 000 employees worldwide
- Combined sales of € 4.4 billion (2015)
- Consolidated sales of € 3.7 billion (2015)
- Listed on Euronext® Brussels – BEL20®
- Recent M&A 2015/2016: Pirelle Steel Cord, Arrium Ropes Australia, Bridon
-

4. Bekaert core competences
4
- Main raw material is wire rod:
• a steel wire about the thickness of a finger
• in a wide range of compositions and grades
• our annual purchase volume totals 2.5-2.8 million tons
- We manufacture all kinds of wire products
• by drawing wire rod through dies of diminishing sizes
• subjecting it to heat treatments of various kinds
- These wires can be
• bunched into cables and cords
• drawn into ultra-thin fibers
• woven or knitted into cloths
- Depending on the application, suitable high
technological coatings are applied to steel wires,
cords and cables, or other materials
1 µm6.5 mm
A human hair = 50 µm
From traditional coatings to
advanced coatings

5. July 2016

6. Bekaert global presence 2015
6

7. Bekaert portfolio optimization
7

8. SCE Why: Yield and motivation
Yield
Fit for growth
SCE is to be a Bekaert standard (same as BMS is) in
stead of each time being local developed.
▪ Install a common language to facilitate
communication and cooperation
▪ Use scale, catch opportunities, eliminate
duplication, save time and resources
▪ Support and maximize impact of other initiatives
like Manufacturing Excellence, Commercial
Excellence, Procurement Excellence…
For Examples of pilots see back-up please
Motivation
Balance Service, Cost and Cash
▪ Service:
▫ Optimize lead time, service degree, on time
delivery,
▪ Cost
▫ Optimize demand allocation: Lowest cost to
serve the market
▫ Optimize material (WR) allocation: Lowest cost
to supply material
▪ Cash
▫ Optimize working capital
▫ Optimize asset utilization
>>> ROCE support
8

9. SCE Why: pilots
SCE pilots - examples
▪ Master data
▫ Facilitate activation of operational planning and
capacity calculation in SAP
▪ Operational planning
▫ US: master planning in SAP, and real time
manual detailed scheduling of line positions with
production inputs “works great”
▫ Belgium: planning team explores business
benefit, starts to embrace the new concept and
pulls implementation
▪ S&OP US
▫ Improved communication flow between sales
and operations
▫ Transparent facts and figure for management of
demand and supply, especially capacity needs
- US: support on set-up of production of half product for
expansion in new business
- US: bottlenecks analysis demand increase
▫ Stock optimization ongoing
Impact
▪ Master data
▫ Restructure production master data US plant
(from 29000 lines to 350 lines)
▪ Operational planning
▫ US: introduction of master planning and partly
tools for detailed manual scheduling in Satellite
▫ Belgium and China: design of planning concept,
process and tools, implementation started
▪ S&OP US
▫ Demand planning process: implemented
▫ Supply calculation process US: implemented
▫ Executive S&OP – decision making: build up in
cases
9

10. SCE What: Scope
10
SCE scope
▪ Designed SCE process landscape
▪ Aligned SCE responsibilities
▪ Shared SCE KPI targets
▪ Integrated SCE matrix organization
We go for standard concepts,
processes and tools with
customization where required to
continuously deliver superior value to
our customers, in the different
businesses and regions.
Strategic planning
Sales and operations
planning
• Demand planning
• Supply planning
• Procurement planning
Operational planning
Masterdata
Supply Chain planning
Transportation
Warehousing
Logistics
Balanced
result:
Service
Cost
Inventory
Investment
Material flow

11. 2015 2017
Develop - pilotDevelop
2016
Master data management:
Domain: Product hierarchy, Sales hierarchy, Production data
Target: All Reviewed, implemented in standard systems. Update and maintenance
organized. Concepts and principles documented in dynamic playbooks.
Operational planning:
Domain: Master planning and detailed planning and scheduling
Target: Effective, efficient and flexible planning for all businesses and regions using
standard tools, integrated in a standard IT solution, with custom designed options to
serve the needs of the operations.
S&OP:
Domain: Demand, supply and procurement planning
Target: Effective and efficient medium-to-long-term planning process that provides
visibility into the future, to recognize demand variability and opportunities early, and
keep demand and supply in balance, optimizing service, cost and cash.
Develop – pilot – roll-out
2018+
Reach Targets
11
SCE What: Final state targets Supply Chain Planning incl. MDM

12. US
Supply US
US Q+6
Advanced planning Belgium
China
2015 20172016
①①①① Complex set up
②②②② Flow diversity set up
③③③③ Repetitive mass
production
M+3 / Q+6 process
Robust tools
Inventory
2018-2023
Prodcution
planning
S&OP
Rubber Reinforcement concept and process
Basic manual planning US
Basic manual planning Belgium
RR analyze existing tools
US M+3
China M+3
Demand US
China
China
Costa Rica
M+3
Optimizer planning
Playbook roll-out in selected areas
Costa R
Q+6
Develop Pilot Roll-out
SCE What: Roadmap Supply Chain Planning
Advanced planning US
China Q+6
US2 Q+6US2 M+3
Rubber Reinforcement Q+6
Rubber Reinforcement SNP
Rubber Reinforcement Wire Rod EUR
Building Products Q+6
12

13. SCE How: Operations: 3 aligned functions
13
Purchasing Manex SCE
Organization:
Integrated
matrix in to
the regions
• Central organization for main
categories
• Central organization for
purchasing processes
• Regional dotted functional
lines
• Recruiting, succession
planning, training, …
supported by central team
• Central organization of global
& regional coaches
• Central organization per region
(architectures)
• Local coaches dotted
functional line towards the
regional architecture
• Recruiting, succession
planning, training, …
supported by central team
• Central organization for supply
chain concepts, processes and
tools
• Business platform and regional
dotted functional lines
• Recruiting, succession
planning, training, …
supported by central team
Result:
Shared
targets
Purchasing KPI dashboard
• Financials (wave tool)
• Procurement excellence
• Supplier relations
• Sustainability
Shared targets with regions
• Financials future state (wave
tool),
• Plant KPI
• Way-of-working and other
playbook progress
• Shared RR 2020 target
SCE KPI dashboard
• Financials (inventory)
• SCE KPI (OTD, etc.)
• SCE process ownership:
design, pilot, implementation
Process
Ownership:
processes
designed and
implemented
• Purchase-to-pay process
(from request to order to
accounts payable, up to
shared services)
• Way-of-Working,
playbooks
• MES
• Automation…
• Standardized Master data
• Planning processes, including
inventory optimization, demand
and supply allocation external
and intercompany flows
• Logistics & warehouse
management, …

14. SCE 2017: The total team
EVP RR platform
Global Supply Chain
Manager
Regional Supply Chain
Mgrs RR, reporing in
the region
EVP Indus. ＆Spec.
Products Platform
VP Building Products
Global Supply Chain
Manager
EVP North Asia ＆
Global operations
CPO & SVP Supply
Chain
Supply Chain
Excellence (SCE)
Manager
4 SCE Project
Managers
4 SCE Implementers
Regional Supply Chain
Mgrs IP and SP,
reporting in the region
Global Supply Chain
Managers, reporting in
the platform
14

15. SCE 2017: Dashboard
Result: shared targets
Cash: Inventory optimization: free up cash
FG: target: xx mio€
WR: target: xx mio€
Service: On time delivery:
Q1-Q2: set up
Q3-Q4: monitoring
Cost: Optimal allocation savings:
Q1-Q2: set up
Q3-Q4: monitoring
Enable KSA: WR 3 months rolling forecast
on regional level:
EUR - US - China
Organization: Integrated matrix
Build a center of excellence
• Build a SCE forum
• Capture external excellence through SCM
World, external fora, peer connection
• Capture internal excellence through
playbooks, best practices and follow up of
regional initiatives
• Build standard metrics: Service follow-up
through OTD or alternative
Deployment of excellence
• Map organization matrix
• Work out first version for job description &
training curriculum
• Deploy playbooks
Processes design, pilot and roll-out
Master data
• Learning stop on scope approach
• Product hierarchy: upgrade ISW ○ and SSW ○
• Production:
Wire Products SAP: US, Belgium, China, Costa Rica,
Rubber Reinforcement: design optimal set up & pilot China
Production planning
• For complex set-up and flow diversity set-up: optimize process,
design tools for basic and advanced planning with implementation
in pilots
Belgium Basic: SC○ DS○ IM○
Belgium Advanced: SC○ DS○ IM○
US Basic: SC○ DS○ IM○
China Basic: SC○ DS○ IM○
• For repetitive mass production: Define concept and process ○
• Implement shop floor material management with Manufacturing
Excellence
S&OP
• Optimize process ○, design tools ○, roll-out:
WP US M+3: FC○ SU○ EX○ Q+6: FC○ SU○ EX○
WP China M+3: FC○ SU○ EX○
RR global M+3: SNP roll-out ○ Q+6: FC○ SU○ EX○
RR Eur M+3: WR allocation ○
Building Products Q+6: FC○ SU○ EX○
Costa Rica M+3: FC○ SU○ EX○
• Inventory: roll-out playbook in selected areas
15
Legend: WP: Wire Products; RR: Rubber Reinforcement; SC: scoping; DS: design; IM: implementation; FC:
demand input; SU: supply calculation; EX: executive S&OP, decision making; SC LT members in the lead: Ⓑ:
Bart Bogaert; Ⓒ: Celien Deguffroy; Ⓓ: Brigitte Desmet; Ⓝ: Nicolas Gevaert; Ⓡ: Rod Ady; Ⓦ: Wim Lasuy; Ⓩ:
Ada Zhu; Ⓧ: TBA; Ⓙ:JanQuagebeur.

16. Dashboard: Deployment to projects (sharepoint tool)
16

17. Dashboard: Project work out (sharepoint tool)
17

18. 18
Integrated Savings Tracking System
PMO
+
KPI
Dashboard
Savings
Methodology
(aligned with
Finance &
Business
Control)
Savings
Conventions
(aligned with
Finance &
Business
Control)
COA/Governance Savings Approval
powerful IT
facilitator
Purchasing
Finance
Business
Transparency (baseline, progress,
timeline, actions)
Methodology consistency (Stage levels,
conventions, connection to P&L)
Standardization (automated reports,
general process)
Discipline & Rigor
Speed
Our aim is to further integrating with the business and regional teams.
Follow up PMO - concept

19. PMO charter – Responsibilities purchasing example
19
Central
PMO
(Direct participation)
Produce PMO presentations with standardized bar charts and relevant
dashboards.
Manage PMO progress and processes.
Assign actions and ensure follow-up and completion.
Communicate to business stakeholders.
Category
Managers
(Direct participation)
Explain savings pipeline of main initiatives vs. target in the category (monthly,
quarterly and annual), and focus on the “what to deliver” part.
Report status of category development covering: sourcing strategies, efficiency
improvement, processes (PO coverage), authorization schedule, contracting,
supplier base, TCO and etc.
Closely align and work with Regional Managers to ensure effective follow-up,
execution and completion of the assigned actions taken from the PMO meetings.
PMO
Partners
(Direct participation)
Lead, manage and monitor the main projects initiated in the category, and
focus on the “how to deliver” part.
Ensure compliance, follow up the performance of the clusters and plants in
line with global KPI dashboard, and shares best practices.
Support category managers to closely align with regional business units to
follow up and execute identified projects and PMO actions.

20. PMO program management with Wave tool
•Systematic project management
•Savings tracking via wavePurchase savings
•Payment terms standardization, free cash
•PO coverage, PO creationg efficiency...P2P
•Consultancy spend reduction
•Travel, lease car, ltemp labor spend managementCorporate services
•Code of conduct compliance
•Ecovadis executionSustainability
•ERM
•Supplier audit...Procurement excellence
•Category and region specific
Produrement category
& region
•Inventory
•Service parameter follow up
•Cost saving
SC shared targets
•Build SC center of excellenge
•Deployment of excellenceSC matrix organisation
•Master data structure and content
•Production planning
•S&OP
SC process ownership20
Planning,
Reporting &
Communication
Reliable
Database
Program
Management

21. Role of Wave
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Idea evaluation: Pivot view of project cards
Delivery monitoring: Gantt chart view
Program reporting: Impact gap analysis
Example WAVE reporting and analysis
▪ Provide single version of the truth through
centralized idea capture with clearly defined conventions
▪ Reduce management burden and increase focus on
content, with distributed input gathering and automated
aggregation in real time
▪ Foster efficient communication and collaboration
through shared access (with visibility restriction), and
formal stage-gating
▪ Facilitate review and decision process for different
stakeholder groups, with customizable reports &
dashboards
▪ Support implementation and result delivery, with
embedded planning and impact tracking
SCREEN SHOTSExpected benefits from Wave

22. Stage-gating approach
22
L2L2
L3L3
L4L4
L5L5
L1L1
Idea sized
▪ Any idea generated
with high level
estimate of impact
(entered into
tracking system)
▪ Idea analyzed for
feasibility, TVO
impact and risks
▪ Project’s owner
identified
▪ Detailed
implementation plan
developed
▪ Project approved
and signed-off by
the relevant
General Manager
and being
implemented
▪ All key activities to
realize savings
completed (e.g.,
contract / PO signed,
policy changed)
▪ Savings valuation
approved by TO
▪ Project-specific KPI
changed sustainably
(over 3-month period1)
▪ Value captured at
annualized rate
Prioritized for
planning
Approved for
implementation
Major activities
completed
Fully realized
Impact
accruing
Project being
planned and
prepared for
approval
Project in
implemen-
tation
Ideas being
turned into
initiatives
Value identification Value capture
Ideas
Impact
accrued
Stage gates
L1 – L5
Milestones

23. 4
Set the
ambitions
Week 0
9/01 – 13/01
Week 4
6/02 – 10/02
Week 5
13/02 – 17/02
Week 6
20/02 – 24/02
Week 7
27/02 – 3/03
Perform qualitative interviews
Collect quantitative data
for benchmark
Ambition
workshops
Process & analyze quantitative data for
benchmark
Consoli
date &
prepare
w orkshop
Program
mgt.
Describe BC
benefits &
Roadmap
Week 1
16/01 – 20/01
Week 2
23/01 – 27/01
Week 3
30/01 – 3/02
Steerco
Week 8
6/03 – 10/03
Start-up
Collect qualitative information
Qualitative
maturity
assessment
Week 9
13/03 – 17/03
Analyze qualitative
information
Benchm ark
completed
All quantitative &
qualitative
data collected
Qualitative
interviews and
survey done
Business
case &
roadmap
Envision
workshop
TBDTBD
SCE Conclusions: World Class Ambition