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Where are We on The Demand Driven Journey?

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Jake Barr - CEO BlueWorld Supply Chain Consulting Retired – Global Director – P&G Where are We on The Demand Driven Journey?


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Lora Cecere - Founder of Supply Chain Insights Carol Ptak – Founder of Demand Driven Institute Referee/Judge Welcome to…..


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“Qualifications to Incite the Riot” P&G Demand Driven Architect Accenture/Gartner Recognized “Outside In” Expert


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Ground Rules “How did we get here” Perspective on Barriers to Progress Panelist View of our Current State Your Take on the State of Affairs Closing thoughts The Great Debate - September 2015


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Story of the $1Billion Dollar Brand How to Deliver Game Changing Value at the Two Moments of Truth How Did We Get Here? Deliver superior consumer value cheaper/better/faster


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Business Driver Translation Leaving Revenue/Margin on Table Despite technically BIC Service Limiting speed of growth - not agile Need for more sku’s/channels/markets Differentiated Retail/Customer Requirements Segmentation of the supply chain for cost/cash Cash/Cost Intensive We needed to be the bank for growth Couldn’t Productively Scale Needed new approach Supply Chain Dysfunction/Visibility Why Change?


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TM P&G


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Vision Make the Supply Chain a Competitive Weapon by Synchronizing the Cadence from Shopper through Supplier


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Supply Network Daily Demand Replenishment Customer Headquarters Planning P&G/ Partners & Suppliers Deployment OOS Visibility Merchandising


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Roadmap to Progress Synchronization of Processes/Stds New Age Metrics/Rewards Eliminate Technology silos New “Skills”/New Talent


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Consumer-driven Supply Networks: Defined by P&G in the 1990s as a shelf-driven, outside-in process defined by successful execution of the two moments of truth. (The two moments of truth are: Was the product in stock? Was the customer delighted?) Demand-driven Supply Networks: As defined by AMR Research in 2004: a supply chain that senses and translates market signals in real time. Demand-driven Value Networks: As defined by AMR Research in 2007: A network that senses demand with minimal latency to drive a near-real time response to shape and translate demand. Market-driven Value Networks: As defined by Supply Chain Insights in 2010: an adaptive network focused on a value-based outcomes that senses, translates, and orchestrates market changes (buy and sell-side markets) bi-directionally with near-real time data to align sell, deliver, make and sourcing organizations outside-in. Definitions


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Definition Does not mean Make to order everything Simple pull Inventory everywhere Does mean Sensing changing customer demand, then adapting planning and production while pulling from suppliers – all in real time! All material and content © copyright 2015 Demand Driven Institute. All rights reserved. Certified Demand Driven Planner (CDDP) is a trademark of the ISCEA


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Demand Driven MRP? Material Requirements Planning (MRP) Distribution Requirements Planning (DRP) Lean Theory of Constraints Innovation A multi-echelon materials and inventory planning and execution solution. Six Sigma All material and content © copyright 2015 Demand Driven Institute. All rights reserved. Certified Demand Driven Planner (CDDP) is a trademark of the ISCEA


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Crawl/Walk/Run It’s a Continuous Journey Reliable/Predictable Supply Supply Chain Visibility Connecting external flows Control Tower/Network Orchestrators Concurrent Demand/Supply Scenarios Rinse-Recycle-Repeat


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Real Time Operations Seamless E2E Synchronization Synchronize the cadenced supply chain From Shopper Consumption through Suppliers Digital Integration of POS Data as key source for shopper behavior and shelf-offtake. Scaled Integration into forecast. Real time, Digitized Supply Network Capacity Planning Agile Digital Scheduling and sequencing of factory floor ops driving real time supply response Segmentation of Demand Info Flow to fully automate turn planning and focus high value touches on events/merchandising integration Real Time, What-If Scenario Modeling and Simulation, together with integrated target setting and tracking. 1 2 3 4 Have We Come Far Enough? - No!


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Sum it Up: Why Haven’t We Seem More Breakthrough Three GAPS: Process Technology Organization Culture


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“End State” Business Sufficiency Supply chain – sustainable, scalable & synchronized driven by Real Time data Single Demand, Supply and Business Planning Environment Volume and Financial sufficiency evaluation concurrent and real time What-if and Scenario Management ? 2012The Procter & Gamble Company, All Rights Reserved.


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Panelist’s Perspective Initial Thoughts on: Level Set – What’s Your Definition of Demand Driven Demand Driven – Dead or Alive? What is behind the lack of broad scale success given the potential offered? What are some practical interventions or advancements that would significantly change the game here? How do we deal with driving the improvement in the crossover of source, make, deliver? Compelling thought you want to leave the audience with.


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Make the Supply Chain Visible – E2E Deliver Reliable Predictable Supply Drive off of Demand Visibility/Integration Agility to Shape/Predict Potential Failures – in advance Bring Supply Chain Options/Tradeoffs “Alive” Enable “Segmentation” of Service Non-Negotiable Bigger Picture – “End Game”


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Demand Driven Success? Creation of Roadmap – Maturity Model Top 25 Ranking Benchmarks Breakthroughs in SC Technology Created “outside in” network design Initiated review of Gaps in SC Talent Triggered new process monitoring & measurement processes


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So …. Is Demand Driven Still Alive?


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Supplemental Slides


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Traditional Process Design is “Blind” Barrier to Progress 26 Enterprise Wide Planning/Optimization Process Design


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Most MISS the POINT You Can’t “Rain Money” with a Static Operation Transportation Management Execution Planning Design Enterprise Resource Planning Distribution/ Whse Mgmt Labor Management Production/ Capacity Planning Customer/ Channel Mgmt Sales & Operations Planning Demand Forecasting/ Sensing Inventory Planning Procurement Network Optimization Multi-echelon Inventory Optimization Route Optimization Product Flow-path Optimization Demand Segmentation Service-level Optimization Enterprise Simulation Production/Op’s Management Dynamic vs Static


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Sense Evaluate Decide Act Business Outcomes Increased customer satisfaction Risk mitigation Improved financial performance Unique Capabilities Multi-enterprise visibility Immediate what-if simulations Coordinated multi-party response Real-time data Multi-enterprise Rapid re-planning Scenario analysis Distribute plans to partners “Surgical” execution plan changes Financial impact analysis Multi-party collaboration Sense In-transit inventory and dynamic ETAs Exceptions and delays – date, quantity On-hand inventory at suppliers, customers, 3PLs Order acceptance status ? firm or able to change Realized lead times and variability across network Supplier and warehouse OTIF shipping performance Carrier on-time arrival performance Realized logistics unit cost per lane/mode Evaluate Plan and forecast resources Measure and monitor business processes Spot and analyze trends and anomalies Predict potential threats and opportunities Decide Assess and manage risk Compare what-if scenarios Collaborate in decision making Align strategic and operational decisions Act Increase/decrease/re-prioritize/cancel supplier purchase orders Send shipment expedite, re-route, transload instructions to LSPs Hold inventory at supplier or origin warehouse ? postpone Re-allocate on-hand / in-transit inventory to demand Adjust inventory targets Copyright © 2014 Accenture All Rights Reserved. 28 Integrated Process Design Workflow Process Design


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3 Strategic Sources of Losses Market Agility Design Plan Sufficiency Reaction & Trade-off’s Business Performance Operations


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