Imagine the possibilities, realize the potential.
oliverwight.com
Why be good, when you can be great? Delivering sustainable growth with Integrated Business Planning
Imagine the possibilities, realize the potential.
IBP Delivers Growth Top Business Benefits Attributed to Integrated Business Planning (% respondents) Improved Asset Utilization
Increased Revenue
Improved Logistics Planning
Developing and Executing Demand Shaping Programs
19%
17%
52%
20% Capital Planning and Asset Management
21%
Improved translation of Demand into Procurement requirements/buy-side
31%
21%
Improved Forecast Accuracy
31%
27% 28%
31%
Improvements in the Perfect Order/Customer Service
Reduction of Inventory
Source: AMR Research, a Gartner organisation
Improved New Product Inventory
Better Supply Planning / Schedule Adherence
oliverwight.com
IBP Business Benefits Delivered Level 1 Metrics – Cost and Service Customer OTIF % (by line)
Finished Goods (days)
<90%
90 94%
>80 days
80 - 34 days
>94%
Stockturns Finished Goods
<34 days
Disadvantage email@oliverwight-eame.com
9 - 25 turns
>25 turns
<9 turns
Parity
Advantage
Oliver Wight Clients
IBP Business Benefits Delivered Continued IBP Metrics Forecast Accuracy %
<72%
72 81%
>81%
Overall Supply Chain Metrics Total Supply Chain Cost % Sales
>10%
Perfect Order Probability %
10 - 7%
<72%
72 84%
>84%
<7%
Disadvantage
Parity
Advantage
Oliver Wight Clients
oliverwight.com
Case Studies Issues Facing lots of volatility in key business areas impacting forecast accuracy, supply chain performance and customer service leading to poor customer experience Company:
Retailers demanding even greater levels of customer service with daily deliveries and zero inventory Lack of integration across the business and timely decision making Lack of management of integration of NPD
Value Delivered World class performance in less than 15 months Heinz achieved a 24-month horizon for its NPD strategy with between 20 and 30 high-end NPDS in progress every year 99% customer service performance Demand and Supply accuracy only 5% and 2% volatility respectively Safety stocks of key products significantly reduced Financial accuracy with only +/-2% Business working from one set of numbers
email@oliverwight-eame.com
Company:
Issues Highly complex and competitive category challenging business performance and goals High levels of inventory and deteriorating service
Value Delivered Inventory reduced by 50% SLOB rates dropped from 35% to 15% Raised stock turns from 1.6 to 3.5 Service levels up to 98.5% Forecast errors halved OTIF improved from 40% to 95% SKUs reduced from 7,500 to 810
oliverwight.com
Company:
Water and heating technology
Issues Serious problems with communication and supply chain efficiency between Italian and other European BU’s Low supplier management and performance
Value Delivered OTIF improved from 68% to 95% Improved team culture, open & honest communication
IBP is the way we will manage the global business… Enjoy the benefits that transparency will bring. CEO
Working off one set of numbers Inventory days reduced from 85 to 59 €300,000 production savings Stock reduction of €4 million Company-wide strategy implemented
oliverwight.com
Company:
Issues Making a loss and fighting for survival
Packaging Company
Losing customers and price cutting in an attempt to retain them OTIF just 50% Huge stock wastage by ordering in bulk to try and cut costs
Value Delivered Transformed from loss maker to highly profitable business Operating costs significantly reduced with no loss in sales Increased percentage revenue coming from innovation to 18% Dramatically improved visibility over a 12-18 month horizon Productivity doubled Lead times reduced by two thirds Working capital and headcount reduced by 50%
email@oliverwight-eame.com
Company:
Issues Close to bankruptcy with very serious cash flow problems
Fuel Pump Manufacturers
Suppliers were loosing confidence and cutting ties due to their payments being overdue Management unable to communicate credible or reliable figures Lack of transparency and absence of cross-organisational cohesion Operational SILOs and discouraging communication between departments Hasty expansions resulting in poorly-run subsidiaries with increasing costs and no real profitable returns
Because of IBP, we now have the capital from our current operations to further invest into new growth projects and prepare for the future. CEO SUNTEC
Value Delivered Net sales of â&#x201A;Ź25.1 million in one year Increased profit margin of 10-15% Working from one set of numbers and teams communicating Cultural behaviours transformed Projections for future years are positive New investors
oliverwight.com
Company:
Global Pharmaceutical Company
Issues Whilst being financially stable the company was operating in daily crisis Poor customer service levels (operating at 22%) Excess inventory Operating in functional/regional SILOs Strong year end culture with limited focus on strategy deployment
Value Delivered Business savings >200 million dollars with a 20 fold ROI Reduced global inventory by 30% Customer service dramatically improved from 22% to >95% High performing leadership team environment created Clear roadmap, tracked monthly, to deliver the business strategy
email@oliverwight-eame.com
Company:
Global Infant Formula Company
Issues Lack of financial integration inhibiting the dynamic financial decision making required in the business. Competing in a volatile and dynamic industry S&OP process was established to enable demand/supply balancing but business recognized the need to enhance the process to one that helped focus on delivery of the business strategy (Integrated Business Planning). Establish ownership of the IBP process at leadership level
Value Delivered A more transparent financial outlook allowing the business to identify future risks and opportunities and gap close accordingly Able to handle the business with more confidence, working from one set of figures to assess the entire business situation. Global consistency in process Improved decision making led to optimized financial performance Significantly improved customer service levels Timely investment decisions made to exploit future demand
oliverwight.com
Company:
Multinational Medical Equipment Manufacturer
Issues Disparate global organisation with no alignment to, or visibility of, the business strategy Decisions on investment and new product introduction driven by â&#x20AC;&#x2DC;who shouts loudestâ&#x20AC;&#x2122; Lack of financial integration with operational and sales planning Underperforming and unmotivated culture New product development being delayed and missing launch dates
Value Delivered Manufacturing capacity increased by 20% Average order size up 60% in some markets Greater visibility with a clear 24-month picture of demand One set of financial numbers Improved inventory levels and SKUs reduced by 50%
email@oliverwight-eame.com
Company:
Issues About to enter aggressive growth phase requiring significant investment Lots of debt
PACKAGING
Packaging Company
Sales forecast accuracy at SKU level 30% Forecast accuracy at SKU level 40% Manufacturing accuracy 30%
Value Delivered 30% revenue growth Inventory days reduced by 32.5% (from 40 to 27) Customer service increased from 96% to 99% Forecast accuracy at SKU level increased to 80% 20% saving in handling, warehousing and freight Manufacturing accuracy up to 80% EBITDA improved by 20% Markets biggest volume growth Tonnes per hour ratio improved significantly Sales forecast accuracy at SKU level increased to 50% Number one in French market for volume growth Market leader in key market with 50% market share within six months After 12 months only 20% debt left to repay oliverwight.com
Company:
Issues Inventories were swelling Significant portfolio complexity - 120,000 different SKU codes Lack of communication and integration across the business Each site working in SILOs
Value Delivered Increased net sales to â&#x201A;Ź1.1 billion 30% improvement in OTIF 50% reduction in inventories Increased visibility of medium to long term opportunities and risks Each site working collaboratively leading to integrated decision making
email@oliverwight-eame.com
Company:
Global Construction Materials Company
Issues Poor customer service levels High inventories Weak supply chain performance when compared to benchmark set Sub optimal cost to serve
Value Delivered 3-fold profit increase 5-fold ROI increase SKUs reduced from 3000+ to 996 External storage costs reduced by 50% OEE increased from 15% to 40%
oliverwight.com
Some of our Integrated Business Planning Clientsâ&#x20AC;Ś Bunge SUNTEC Wrigley Novartis Consumer Health AkzoNobel Packaging Coatings Nampak Flexible Molnlycke Health Care AB Aircelle Maroc US Army
For further information on how Integrated Business Planning can help transform your business performance please contact us on +44 (0) 1452 397200 or email@oliverwight-eame.com
Imagine the possibilities, realize the potential.
When you talk to Oliver Wight about improving your business, we’ll assume you want results, not just better processes - things like increased revenues and margins and greater market share. If you have the ambition, it is possible to make improvements that truly transform the performance of your organisation and create more fulfilling roles for the people within it. We believe this can only be delivered by your own people. So, unlike other consultancy firms, we transfer our knowledge to you; knowledge that comes from nearly 50 years of working with some of the world’s best-known companies. Oliver Wight has a long-standing reputation for innovation and we continually challenge the industry status quo, so you always get the latest in new thinking. Your Oliver Wight partners will use their real-world experience to ensure your people, business processes and technology are fully aligned and integrated right across your organization. They will coach, guide and inspire your people to drive change throughout your organization, allowing you to create a culture of continuous improvement and innovation that simply becomes for you ‘the way we do things around here’. It’s a proven, sustainable approach that will deliver results straight to the bottom line.
Oliver Wight EAME LLP The Willows The Steadings Business Centre, Maisemore Gloucester GL2 8EY United Kingdom T: +44 (0)1452 397200 F: +44 (0)1452 397230 email@oliverwight-eame.com www.oliverwight.com
Oliver Wight Asia/Pacific 118/3 Male Street, Brighton Victoria 3186, Australia Oliver Wight Americas P.O. Box 368, 292 Main Street New London, NH 03257, USA
The information contained within is proprietary to Oliver Wight International and may not be modified, reproduced, distributed or utilized in any manner in whole or in part, without the express prior written permission of Oliver Wight International.
0528/1119
Policy for Distribution of Oliver Wight Materials