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About Me

Currently Director of Supply Chain at Geokinetics Lean Six Sigma Black Belt 6 Years US Army 16 Years in Supply Chain & IT Supply Chain (all functions) Affiliated with APICS, ISM, SC Council, Next Level Purchasing

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UPSTREAM/DRILLNG SC SC SERVICES SC REFINING

SC OTHER

Geokinetics is one of the largest independent, international land and shallow water geophysical service companies offering a broad range of specialized geophysical solutions to the petroleum and mining industries, worldwide.

www.Geokinetics.com

Why Transform?

How many of your companies have a unified Supply Chain Vision and Strategy

Mission

- Tied to the overall organization’s vision and strategy

- Integral part of decision making

- Planning and Forecasting is common practice

“…studies shows companies that report supply chain glitches experience a 20%

loss in shareholder value. Thus, we have the explosion of SCM software products

proliferating the marketplace and an increasing emphasis on collaboration among

chain partners.”

In response to the dramatic changes in the business landscape over the past few

years, many companies are launching business transformation programs to drive

sweeping changes in their supply chain processes.

- CTPAT Logistics

- Exportation/Importation Regulations

- Broader Logistics

- Supplier Base has grown

Inte

grat

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Executive Commitment

Strategy Emplaced

Articulation for change and Setting Targets

Structured Change Management

Maintaining Energy: Momentum and Permeation

“70 percent of all transformation initiatives (programs) fail. Therefore, the effort to

improve supply chain results has been short lived, incomplete, or partially

succeeded.”

Doomed For Failure?

Considerations: P.A.C.E* Framework

Pressures: External and internal forces that impact an organization’s market

position, competitiveness, or business operations.

Actions: The strategic approaches that an organization takes in response to

industry pressures.

Capabilities: The business competencies (or organization, process, etc…) required

to execute corporate strategy.

Enablers: The key technology solutions required to support the organization’s

business practices.

*Aberdeen Group

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Prior to Transformation Ask the What, How, Who, etc.

Maturity Class Framework

Where does your company fall?

What defines Best in Class?

Why are they achieving success?

What technologies and services enable them to succeed

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*Aberdeen Group

“Knowing others is wisdom, knowing yourself is enlightenment.”

Lao-Tzu

Know Your Financials

Revenue to EBITDA Ratio Cost of Supply Chain NPV, IRR, Inflation, Tax Rates, Discount Rates

EBITDA is essentially net income with interest, taxes, depreciation, and amortization added back

Show A Compelling Story

2013 0.010 0.050 0.100

Revenue 500,000,000$

OPEX 400,000,000$ 4,000,000$ 20,000,000$ 40,000,000$

EBITDA 100,000,000$ 104,000,000$ 120,000,000$ 140,000,000$

Gain % 4% 17% 29%

2013 0.010 0.050 0.100

CAT I 500,000,000$ 5,000,000$ 25,000,000$ 50,000,000$

EBITDA 100,000,000$ 105,000,000$ 125,000,000$ 150,000,000$

Gain % 5% 20% 33%

“Sourcing Strategies can benefit up to 10% to 20% Cost Savings” (Accenture 2012)

Know your Business Model

Business Size – Alignment with Suppliers Decentralized or Centralized or Hybrid Company Objectives and Strategy

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Pick a Formal Supply Chain Model

Supply Chain Operational Reference Supply Chain Council

Performance Attribute Description

Reliability Addresses the ability to perform tasks as expected. Reliability focuses on the predictability of the outcome of a process. Typical metrics for the reliability attribute include: On-time, Right quantity, Right quality. The SCOR KPI (level 1 metric) is Perfect Order Fulfillment. Reliability is a customer-focused attribute.

Responsiveness The Responsiveness attribute describes the speed at which tasks are performed. Examples include cycle-time metrics. The SCOR KPI is Order Fulfillment Cycle Time. Responsiveness is a customer-focused attribute.

Agility Describes the ability to respond to external influences and the ability to change. External influences include: Non-forecasted increases or decreases in demand; suppliers or partners going out of business; natural disasters; acts of (cyber) terrorism; availability of financial tools (the economy); or labor issues. The SCOR KPIs include Flexibility and Adaptability. Agility is a customer-focused attribute.

Costs The ability to respond to external influences and the ability to change. External influences include: Non-forecasted increases or decreases in demand; suppliers or partners going out of business; natural disasters; acts of (cyber) terrorism; availability of financial tools (the economy); or labor issues. The SCOR KPIs include Flexibility and Adaptability. Agility is a customer-focused attribute.

Assets The Asset Management Efficiency (“Assets”) attribute describes the ability to efficiently utilize assets. Asset management strategies in a supply chain include inventory reduction and in-sourcing vs. outsourcing. Metrics include: inventory days of supply and capacity utilization. The SCOR KPIs include: Cash-to-Cash Cycle Time and Return on Fixed Assets. Asset Management Efficiency is an internally-focused attribute.

What Is Important To Your Company

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SCOR Expanded

QAD: http://www.qad.com/erp/menuitem.59f182664053393643b543b58790307a?vgnextoid=21a3a014ba28a210VgnVCM100000530a03a7RCRD

Design Design Control Design Discrete Design Process

Design

Configuration Design Project

Plan Plan Demand Plan Multi Site Plan Process Plan Discrete

Source Source Direct Source VMI Source Returns Source Contract

Make Make Discrete Make Lean Make Repetitive

Make

Remanufacturing Make Process

Engage Engage Direct Engge Medical

Engage

Configured Engage Retail

DeliverDeliver Direct

Ship

Deliver Direct

Stores Delivery Deliver Discrete Deliver VMI

Deliver

Configured Deliver Retail Deliver Returns

ServiceService

Installation Service Field

Service

Customer

Service

Finance Finance Analyze Finance Budget Finance Collect

Finance

Accounting

Enable

Enable

Lot/Serial

Traceability

Enable

Transportation

Enable

Warehoueing

Enable

Consignment Enable Pricing Enable Schedule

Know Your ERP and Analytics

Know the Requisition to Pay Process within your ERP

Compare to actual business process Are metrics correct (Example: Open PO) Utilize Functionality – how much customization do

you have

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* Graziadio Business Review: http://gbr.pepperdine.edu/tag/supply-chain-management/

Demand Forecast

Perfect Order

SCM Cost

Inventory

DPO DSO

Supplier Quality

Purchasing Costs

Cost Detail

Utilization

Order Cycle Time

How accurate are you to forecast

First Pass Yield %

SC Operational Costs

Velocity & Speed of Delivery

Quality of Services & Materials – Vendor Management

Resource Optimization

Costs of PO, Buyers, Time

Category Management

Right Inventory, Right Amount, Right Time, Right Place

Know What is Important to you

Measure, Measure, Measure

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KNOW YOUR Strengths & Weaknesses

Know Risks and Impacts

Key Change Management Attributes

VISION SKILLS INCENTIVES RESOURCES ACTION PLAN

CHANGE

SKILLS INCENTIVES RESOURCES ACTION PLAN

VISION INCENTIVES RESOURCES ACTION PLAN

VISION SKILLS RESOURCES ACTION PLAN

VISION SKILLS INCENTIVES ACTION PLAN

VISION SKILLS INCENTIVES RESOURCES

CONFUSION

ANXIETY

DELAYS

FRUSTRATION

FALSE or NOSTARTS

People

Competencies Roles & Responsibilities Employee Objectives & SMART Goals – Start thinking of where you want to be Career – Ascension Planning Training & Knowledge Sharing Assessments & Improvements

Execution-oriented competency model to fill SEATsSKILL = Technical skills that are specific to performing the process element, converting inputs to outputs. These are the specific responsibilities that HR will look for in successful candidates. Example: 3-Way Receiving Match

EXPERIENCE = Demonstration of performing tasks related to technical skills. These are experiences that might coincide with information on a person’s resume to describe activities they performed relative to the technical skill. Example: ERP systems

APTITUDE = Personal characteristics of a person that are associated with an aptitude for performing the required technical skills. These are more generic and abstract, but define what characteristics HR would look for in a successful candidate. Example: Analytical, Detail Oriented

TRAINING = Classes, programs, Certifications or other education that aid an individual in performing a technical skill. Examples: ERP Certification, SCOR Professional, APICS CPIM

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Process, Procedures, Policies

Standardize Processes Global Procedures – Visible, Accessible, and Trainable Policies Supporting Business Goals Controls and Metrics Center Led Locally Executed, Completely Centralized, Decentralized? Develop a Professional Supply Chain Formalize Process Maps Integrated with the Business: Shared Services, Business Development, Accounting,

Operations

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Tools

Number of Systems and Tools ERP Process – Core Processes in SC Excel Sheets Integrations

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No One Method A Lot of Hard Work Relate everything to the Business Plan Transformation is NOT AN EVENT BUT A JOURNEY

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