Industrial Benefits: Taking control of the Future

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Taking control of the Future Planning predictable performance in the ever-changing Industrial Sector

Partnered with a third of

Fortune 500 companies

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

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Business Benefits Delivered Industrial Suppliers

88 94%

>94%

6 - 16 turns

>16 turns

<88%

Cost and Service

Finished Goods (days)

>79 days

Customer On Time In Full % (by line)

79 - 47 days

Stockturns Finished Goods <47 days <6 turns

Oliver Wight Clients

Disadvantage

Parity

Advantage

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IBP Metrics

Forecast Accuracy %

<71%

71 83%

>83%

Overall Supply Chain Metrics Total Supply Chain Cost % Sales

>13%

Perfect Order Probability %

13 - 8%

65 82%

>82%

<65%

<8%

Oliver Wight Clients

Disadvantage

Parity

Advantage

Case Studies

Issues High number of contractors High cost of non-quality products Poor customer satisfaction Poor forecasting tools

Company:

Transportation Solution Providers

Poor financial performance Poor project delivery and on time delivery

Value Delivered Strong annual turnover and order book Senior long term objectives are linked to lower level initiatives Improved customer satisfaction rating Improved product management Significant savings via efficient resource management Succession planning Improved project control

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Company:

Issues Service levels (OTIF) between 70-80%

Multinational aircraft engine, rocket engine, aerospace-component and defence company.

Master scheduling adherence was 65% 60% of the monthly production schedule was completed right at the end of the month and put into stock Operating in silos

Value Delivered Production hours increased by 67% from 360,000 to 600,000 Headcount increased by less than 10% Safety stock halved Service levels (OTIF) increased from 70% to 100% Master schedule adherence improved from 65% to 95% Inventory days reduced from 120 days to 90 days, saving â&#x201A;Ź7.5 million

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Company:

Magnesium Product Manufacturers

Issues Large consignments required with short lead times making it difficult to achieve customer delivery expectations Volumes in excess of demand plan Solumag orders in excess of 150% of demand plan Continuous plan changes to try and achieve requirements Raw material stocks running low Fear of losing demand to competitors Abnormal demand not recognised meaning monthly order volumes expected were unknown Pressure would be applied to supply even if other orders were committed Demand plan heavily based on financials making it difficult to supply reliable material plans to procurement

Value Delivered Demand plan bias reduced from 15% to +/- 2% and overall demand plan accuracy improved by 26% Manufacturing schedule overall from 85% to 98% Huge cumulative saving over the programme duration, due to reduced procurement costs, reduced stock write-off, energy reduction and increased productivity

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Company:

Global Construction Materials company

Issues Poor customer service High inventory Week supply chain performance when compared to benchmark set Sub-optimal cost to serve

Value Delivered 3-fold profit increase 5-fold ROI increase SKU reduction from 3000+ to 996 External storage costs >50% reduction OEE increase from 15% to 40%

People are much more empowered now than before and we are finding that the decisions in the business are being made at a more appropriate level, which is allowing the exec team and leadership team to focus more on the future of the business.

Managing Director

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Company:

Issues Loosing money due to bad management

World leader in the fuel pump market.

Close to bankruptcy and under a legal procedure to decide if the company has to be closed down or be sold

Value Delivered Gained better visibility on the true demand and realised they were completely over estimating before The robustness of the process and the financial projections has helped them to get them back to a normal state with good profit levels Projections for the future are positive and new investors found

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

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Company:

Issues Each sector was left to its own devices with individual ways of working and competing for the same customers

Finnish company selling products for drinking water delivery, radiant heating and cooling.

Financial figures only skimmed the surface, income statements, balance sheets & miscellaneous spreadsheet data provided little workable information Vacations sparked chaos No control over inventories and a hoarding mentality 120,000 different SKU codes Duplicated innovation Lack of communication

Value Delivered Strong annual turnover and order book Senior long term objectives are linked to lower level initiatives Improved customer satisfaction rating Improved product management Significant savings via efficient resource management Succession planning Improved project control

One of the biggest benefits of Integrated Business Planning is the absolute increase in visibility.

Director of Integrated Business Management

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Company:

Issues BOM accuracy at 40%

Global corporation which designs, develops, engineers, manufactures, markets and sells machinery and engines.

No measurements on machines launched to plan Additional products added to assembly line with the limitation of no additional space in an already busy manufacturing site â&#x20AC;&#x201C; lots of stored inventory taking up space

Value Delivered Complete machine build increased from 25% to 98% On time delivery increased to 99% BOM accuracy increased to 99.9% Reduced shortages and inventory in the supply chain Dealer reliability figures improved Suppliers are more responsive

The results of the implementation of our logistics strategies have been resounding, and the process improvements we made have more than paid for the ÂŁ25 million investment in the new factory layout.

Manager of Supplier Management

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Company:

Issues No measurements in place and when they began measuring, the results were more like Class D

Global corporation which designs, develops, engineers, manufactures, markets and sells machinery and engines.

Value Delivered KPI Performance increased to 95%+ Unified European operations Production performance at 99% Sales revenues increased Reduced materials and freight costs Improved decision-making Culture change embedded in the company

Since reaching Class A, we have achieved record production and shipment levels.

Supply Chain Manager

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Company:

Issues Cultural difficulties â&#x20AC;&#x201C; sceptical employees that lacked belief in management

Global corporation which designs, develops, engineers, manufactures, markets and sells machinery and engines.

Behavioural issues Performance gaps in customer service, internal and external performance and systems data accuracy Master production schedule and supplier and customer delivery performance between 30% - 60%

Value Delivered External and internal lead times reduced 30% improvement in productivity Customer service improved by 85% Data accuracy increased by 60% Reduced labour costs Increased customer satisfaction Improved morale and teamwork

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Company:

Defence Aviation Repair Agency Global corporation which designs, develops, engineers, manufactures, markets and sells machinery and engines.

Issues Some areas were only operating at 65% efficiency Moving to a new model where they weren’t sure where their funding would come from Never knew how much work they would have at any given time – at times required lots of overtime at extra cost No forecasting skills

Value Delivered OTIF increased to 95% Transformation to a commercially-run operation Improved operational efficiency Inventory holdings optimised Management structure rationalised Speed of decision making increased Shift from commence and control to self-directed team culture

It’s easy for consultants to tell you what you want to hear, but in the longer term it’s a guarantee of failure. With the Oliver Wight team, if they think you are heading in the wrong direction, they tell you.

Director of Components

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Company:

Defence Munitions Manufacturers products for UK defence.

Issues 4-fold increase in workload with resources and staffing being reduced to meet cost targets Pressure to drastically reduce cycle times to remain competitive and reduce orders

Value Delivered Production increased by 58% Average cycle time reduced from 18 days to six days Areas of waste identified and removed More environmentally friendly and safe site by halving explosives Output activity increased and input costs reduced Low-cost investment in lead manufacturing Enormous behavioural change and ownership of processes

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Company:

Gilbert Gilkes & Gordon Ltd.

Global hydroelectric turbine specialists.

Issues  Decades of detrimental operational processes, inherited business practices and crucially, a company divided deeply in two Us-and-them mentality Pay packets for the same jobs titles were inconsistent between the two divisions Divisive culture and duplicated departments Firefighting and informality Mistrust and blame culture Lack of strategic direction

Value Delivered Increased projected profits by 550% A unified business and fully integrated strategy A forecast of 24% increase in sales the next year Future growth in a framework of excellence New overseas markets Duplicated departments consolidated which improved cross-organisational communication Identified talent within the business

Some of our industrial clientsâ&#x20AC;Ś Aircelle Caterpillar Defence Munitions Defence Aviation Repair Agency (DARA) Gilbert Gilkes & Gordon Safran Uponor

For further information on how Integrated Business Planning can help transform your business performance please contact us on +44 (0) 1452 397200 or hello@oliverwight.com

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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 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 hello@oliverwight.com www.oliverwight.com

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