© The Delos Partnership 2007 page 1

Integrated Enterprise Integrated Enterprise Leadership Leadership

Overview of the process

© The Delos Partnership 2007 page 2

Customer Relationship StrategyCustomer Relationship Strategy1. First Decide if you are Make to Stock or Make To Order

• May vary by family/product2. Then work out the production plans

Inventory

Production

Make To Stock

Sales/Shipments

OrderBook

Sales Orders

Production/Shipments

Make To Order

© The Delos Partnership 2007 page 3

Inventory ManagementInventory ManagementInventory is not something that can be managedInventory is not something that can be managed – – it is a resultit is a result

Forecasts

Actual Sales Actual Production

Planned Production

© The Delos Partnership 2007 page 4

Make to StockMake to Stock

Production = Demand Plan + (Inventory Production = Demand Plan + (Inventory Target - Current Inventory)Target - Current Inventory)

= 100= 100 + 75 - 50) + 75 - 50)

PRODUCTION STOCK

© The Delos Partnership 2007 page 5

Integrated Enterprise Leadership Integrated Enterprise Leadership

-3 -2 -1

Demand Plan 120 120 120

Actual Demand 119 125 132

Difference -1 5 12

Cum Diff 4 16

Months 1 2 3 4 5 6 7 8 9

Last Demand Plan 120 120 120 120 120 120 120 120 120

New Demand Plan

Difference

Cum Diff

Months Q4 Q1

360 360

-3 -2 -1

Supply Plan 125 125 125

Actual Supply 119 118 121

Difference -6 -7 -4

Cum Diff -13 -17

1 2 3 4 5 6 7 8 9

Last Supply Plan 125 125 120 120 120 120 120 120 120

New Supply Plan

Difference

Cum Diff

Q4 Q1

360 360

-3 -2 -1

Stock Plan 71 76 81

Actual Stock 66 66 59 48

Difference -5 -17 -33

1 2 3 4 5 6 7 8 9

Last Stock Plan 86 91 91 91 91 91 91 91 91

New Stock Plan

Difference

Q4 Q1

Make – To- Stock : Family Units

© The Delos Partnership 2007 page 6

Lead Time ManagementLead Time ManagementLead time is not something that should be a resultLead time is not something that should be a result- it is something that should be managed- it is something that should be managed

Forecast of

Requirements

Actual Requirements/Sales Actual Shipments

Planned Production/Shipments

© The Delos Partnership 2007 page 7

Make to OrderMake to OrderProduction = Demand Plan + (Current Order Book -

Orderbook Target)

= 70 + 75 - 50)

PRODUCTIONPRODUCTION ORDER BOOKORDER BOOK

© The Delos Partnership 2007 page 8

Integrated Business LeadershipIntegrated Business Leadership

-3 -2 -1

Demand Plan 70 70 70

Actual Demand 71 75 80

Difference 1 5 10

Cum Diff 6 16

Months 1 2 3 4 5 6 7 8 9

Last Demand Plan 70 70 70 70 70 70 70 70 70

New Demand Plan

Difference

Cum Diff

Months Q4 Q1

210 210

-3 -2 -1

Supply Plan 75 75 75

Actual Supply 70 69 71

Difference -5 -6 -4

Cum Diff -11 -15

1 2 3 4 5 6 7 8 9

Last Supply Plan 75 75 70 70 70 70 70 70 70

New Supply Plan

Difference

Cum Diff

Q4 Q1

210 210

-3 -2 -1

Order Book Plan 61 56 51

Actual Orders 66 67 73 82

Difference 6 17 31

1 2 3 4 5 6 7 8 9

Last Plan 46 41 41 41 41 41 41 41 41

New Plan

Difference

Q4 Q1

41 41

Make – To- Order – Family Units

© The Delos Partnership 2007 page 9

Family SummaryFamily Summary

0

5,000

10,000

15,000

20,000

25,000

30,000

Euros

Sales Contrib

Sales/Profit

Financial Analysis

BudgetPreviousCurrent

Major ChangesNew Product included in ForecastTender for Russia included

Major AssumptionsCompetition will reduce price by 5 %We Win Russian Tender

Major Threats

Decisions RequiredInvestment of Eur 0.5 m in Additional capacity for New Product

© The Delos Partnership 2007 page 10

WorkshopWorkshop

Using the information given, develop a revised plan

© The Delos Partnership 2007 page 11

Integrated Enterprise Leadership Integrated Enterprise Leadership

To operate effectively an Integrated Enterprise Leadership process needs: Timely acquisition of data on sales, inventory etc. Formal process for preparation of data and

information Time for analysis of information Discussions to get to conclusions Time to prepare agendas and recommendations A regular well communicated and adhered to

process

© The Delos Partnership 2007 page 12

Integrated Enterprise Integrated Enterprise LeadershipLeadership

AACCTTIIOONN

Week 1 Week 2 Week 3 Week 4

InnovationReview

CustomerDemandReview

SupplyPlan

Review

PriorityReview

Stage 1Stage 1

Stage 2Stage 2

SeniorTeam

Review

Stage 5Stage 5

Stage 7Stage 7

Stage 3Stage 3

SupportReview

Stage 6Stage 6

Stage 4Stage 4

© The Delos Partnership 2007 page 13

Planned Calendar …….Planned Calendar …….

•Dates set in advance (annually)•Everyone knows when it is•Agenda pre-set•Preparation happens•If nothing to discuss, then no meeting•Almost non-voluntary

© The Delos Partnership 2007 page 14

Multi-Level Integrated Enterprise PlanningMulti-Level Integrated Enterprise Planning

Week 1 Week 2 Week 3 Week 4

DemandPlanning

DemandPlanning

DemandPlanning

DemandPlanning

DemandPlanningCustomer

New ActivityReview

Innovation

Innovation

SupplyReview

SupplyReview

SupplyReview

SupplyReview

FinancialPriorities

ConsolidatedRecocniliation

FinancialPriorities

CorporateReview

SeniorTeam

Review

GLOBAL

LOCAL

LEVEL 1Country/Market

LEVEL 2Region/Business

Unit

LEVEL 3Europe/

Global HQ

© The Delos Partnership 2007 page 15

Characteristics of IEL processCharacteristics of IEL process• Formal set of meetings• Agendas “pre-set”• Linked series of meetings• Focus on right decisions being made at

right level• Preparation not “thank goodness for the

last minute”• Facts not opinions• Focus on Long-term and not short-term.