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Plan 2.0: Supply Planning Re-Engineering Journey of a Web 2.0. Josh Miller Daniel Soosai Shutterfly Gaea Global. About the presenters. Josh Miller Director Procurement Shutterfly Josh Miller is the director in charge of the - PowerPoint PPT Presentation
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Plan 2.0: Supply Planning Re-Engineering Journey of a Web 2.0Josh Miller Daniel SoosaiShutterfly Gaea Global
About the presenters
• Josh Miller
Director Procurement
Shutterfly
Josh Miller is the director in charge of the
supply chain and procurement
organizations in
Shutterfly. In his current role he is in-
charge of
establishing efficient supply chain and
procurement business processes. Prior to
Shutterfly Josh was working with Amazon
in
London managing the European
inventory and
buying teams.
Josh holds a BS in Industrial Engineering
from
Purdue along with an MS Mechanical
Engineering from MIT and an MBA from
MIT/Sloan School of Management.
• Daniel Soosai
Founder & Supply Chain Strategist/Architect
Gaea Global
Daniel Soosai heads the Supply Chain
consulting practice. He has worked with
numerous customers ranging from Fortune 500
customers to early stage start up devising
innovative and value focused supply chain
solutions . Prior to Gaea Global, Daniel was
with Oracle for 11+ years building supply chain
products and architecting supply chain solutions
for Customers. He last served in Oracle as Sr.
Director in charge of selling Supply Chain
Applications to High Technology Industry
Daniel holds a MBA from Wharton and MS in
Industrial Engineering from University of Arizona
Agenda
1. Introduction - Company Background
2. Pre-implementation business processes & need for change
3. Re-Engineered Business Process and the new solution
4. Benefits and Lessons learnt
5. Questions & Answers
Shutterfly at a Glance
• Shutterfly is an internet-based social expression and personal publishing service.
• Founded in December 1999,
• Shutterfly has approximately 2.4 million global customers.
• Net revenues totaled $186.7 million in 2007, representing a year-over-year growth rate of 51 percent.
• Over 2.3 billion images have been uploaded to Shutterfly.
• Offers free online photo storage, and has never deleted a photo.
• Headquartered in Redwood City
• Owns & operates two manufacturing labs in Hayward, CA and Charlotte, NC – enabling control of quality, production, & costs.
• Consistently ranks in Internet Retailer’s Hot 100 Best Retail Web Sites list.
Making the world a better place by helping people share life’s joy
Supply Chain Overview
• Small team – 5 people, 2 centralized buyers
• Approximately 30 suppliers
• Small retail SKU count across 13 product groups
•Landscape
• Currently operate 2 mfg labs in CLT and PHX*
• Product profile: highly seasonal, mixed velocity, make-to-order product
• Processed 19,300 orders per day in 2007
•Mfg Facts
What does Gaea do?
Gaea’s offering
Operations Strategy and BPR
Oracle Technical Implementation
Oracle Functional Consulting
Gaea Oracle Bolt-On Solutions - “g-apps”
Process
Thought
Leadership
Industry
Expertise
Gaea’s Oracle Application extensions
“g-apps”
Oracle
Technology
Mastery
Gaea’s core competency
Maximizing Gaea client’s ROI on Oracle
Enterprise Software
Investments.
Gaea’s goal
We achieve our goals by successfully implementing Best-in-Class business processes in a risk-mitigated approach.
Custom Customer Applications
Gaea’s Focus Area
Oracle Business
Intelligence-- OBI EE &
Business Intelligence
Apps
Oracle Demand Management
-- Demantra DM
RT S&OP, Adv.
Forecasting & TPO
Oracle Supply Planning
-- ASCP, GOP, CP, IO, PS S&OP
Oracle
Supply Chain Management
-- Inventory, WMS OM, Shipping, WMS & MFG.
We are experts in Oracle Fusion Middleware and have deep programming expertise in Business Integration, Business Intelligence, Business Process Management, Application Server and Developer Tool modules of the Fusion Middleware Suite.
Consumer Electronics
Network Equipment Mfg
Semiconductor
Web 2.0, Media & Entertainment
Consumer Packaged Goods
Distribution
Industrial Manufacturing
Industry Focus
Agenda
1. Shutterfly Background
2. Pre-implementation business processes & need for change
3. Re-Engineered Business Process and the new solution
4. Benefits and Lessons learnt
5. Questions & Answers
Strong Revenue Growth
Source: 10-K
Revenues
$ MM
Gross & Operating Margin
Sales (%)
$0
$50
$100
$150
$200
2004 2005 2006 2007
0%
10%
20%
30%
40%
50%
60%
2004 2005 2006 2007
• Shutterfly (SFLY) has grown at north of 50% over the last four years driven by Personalized Products and Services:
• 56% of revenues in 2007
• 51% of revenues in 2006
• 42% of revenues in 2005
Growth challenges scalability
Number of
SKU
Organization
SizeOrder
Volume
Implications across Shutterfly’s Supply Chain Organization
Manually blow through the BOM in XL to get the dependent demand
Manual netting and planned order creation which is error prone
Manual release of POs to supplier
Forecast collaboration with suppliers using XL
Long supply planning cycle time
Long disjoint S&OP cycle time
Manual reschedule of POs to suppliers
Pre-BPR BOM & Product StructureMultiple source of truth for the BOM structure maintained in excel
Pre-BPR Supply planning processExcel based error prone BOM explosion and non-standardized MRP process
Unit Forecast in XL
Agenda
1. Shutterfly Background
2. Pre-implementation business processes & need for change
3. Re-Engineered Business Process and the new solution
4. Benefits and Lessons learnt
5. Questions & Answers
Supply Chain BPR and Product Rationalization
Supply Chain BPR and Product Rationalization
Supply Chain BPR and Product Rationalization
Post-BPR BOM and Product StructureProduct Portfolio was rationalized, structured efficiently …
Post-BPR BOM and Product Structure … and managed in the system
Post-BPR BOM and Product StructureSolution Enabler I: Streamlined Plan to Procure process with consistent inventory policy
Post-BPR BOM and Product StructureSolution Enabler II: Productivity enhancing exception based planning
Post-BPR BOM and Product StructureSolution Enabler III: Streamlined ASCP process with consistent inventory policy
Post-BPR BOM and Product StructureSolution Enabler IV: Detailed analysis capabilities using Demand & Supply pegging, HZ Plan etc.
Case Study II: Post-BPR BOM and Product StructureSolution Enabler V: Automated Pur. Req. and Pur. Ord. generation
Agenda
1. Shutterfly Background
2. Pre-implementation business processes & need for change
3. Re-Engineered Business Process and the new solution
4. Benefits and Lessons learnt
5. Questions & Answers
Product Portfolio Rationalization based Transformation
Multiple source of truth for the BOM structure maintained in excel
Product Portfolio was rationalized and structured efficiently and managed in the system
Transformation enabled by Supply Planning BPR
Excel based error-prone BOM-explosion & non-standardized MRP
Streamlined Plan-to-Procure process with consistent inventory policy & exception based planning
Benefits
• Allowed us to migrate from primarily a min/max planning system to one that leverages a bill of materials
– Long term material planning– Enabled collaboration with supply base (order qtys, timing)
• Provides process structure and maintains logic in a system easier to understand and less prone to errors
– Explicit BOMs and BOM management capability (vs. embedded excel calculations)
– Data representation (horizontal plan, supply/demand list, netting)– Exception mgmt and buyer workflow capabilities
• Automation– Automated purchase requisition creation– Netting and planned order generation
• Clarity & Control – Improved ability to manage inventory & safety stock policies– Enabled quicker and more thorough research ability– Better metrics = better decision capabilities
Lessons Learned
• Continually re-think the process to avoid customizations
• Lower your expectations
• Do not underestimate the value of an A+ functional expert during the implementation phase.
– Knows Oracle capabilities but also understands the business process and can figure out the best way to marry the two
– Include time and funds in the budget to work on “best practice” business process after you go-live
– A lot of options…get references
• Details details details…don’t ask “can Oracle…” without asking “how”
– Workflow implications…if you can’t manage the necessary workflow then it doesn’t matter
– Aspects of Oracle definitely leave plenty of room for improvement
• SME / project owner must be detailed & action oriented – willing to roll up his/her sleeves and really get into the depths of implementation
AQ&Q U E S T I O N SA N S W E R S
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