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Maximising the R.O.I. from your Supply Chain Tools
Barry Drummond – Business Development Manager
• The Business Case- How to get your project off the ground
• The Benefits- What can you expect to achieve?
• The Critical Success Factors- How to make it work
Agenda
2
3
The Business Case
4
A Day in the Life of a Business Case...
IdeaHow
much?Write stuff
down
Approval
Implement
End
5
The Value Circle
Customer Service
Supplier Performance
Manufacturing Efficiency
Forecast Accuracy
Inventory Effectivenes
s
Asset Utilisation
ITEffectivenes
s
Supply Chain Effectivenes
s
Sales &Margin
Promotional Effectivenes
s
Strategy
Gaps
Tools
Benefits &Payback
Implement
Measure
Publish
6
The Benefits
7
It’s obvious....isn’t it?
The Benefits
Payback = 2 yearsInitial outlaydoes it actually work?rentinghassle
8
Supply Chain Planning Tools
The Benefits
Customer
Demand Orders & Forecasts
Supply Finished Goods
Warehouse
Supplier
Supplier
Buy Finished GoodsPurchase Orders
Make Finished Goods
Buy Components
Purchase Orders
Factory
Demand Planning
Production Planning
Distribution Planning
Procurement Planning
Procurement Planning
9
Improvement of Key Performance Indicators (KPIs)
The Benefits
Customer Service
Supplier Performanc
eManufacturing Efficiency
Forecast Accuracy
Inventory Effectivenes
sAsset
Utilisation
IT Effectivenes
s
Supply Chain
Effectiveness
Sales & Margin
Promotional Effectivenes
s
Min % Max %0
25
50
10
40
Forecast Accuracy
Min % Max %0
10203040
6
30
Service Level
Min % Max %0
25
50
5 25
Working Capital Re-duction
Min % Max %0
20
40
60
10
50
Inventory Reduction
10
Range of Benefits from Implementing a Demand and Supply Chain Planning Solution
The Benefits
11
Sell More and Save More
The BenefitsG
oal
Meth
od
Leve
r
Improve Customer
Service Level %
Promotions & New Product
Launches
Sell
ForecastingPurchase
Order Optimisation
Inventory Management
Capacity Planning
ProcessCloud vs On
Premise
Sourcing Decisions
IT Strategy
Process Efficiency
Lower Inventory
Capacity Planning
Supplier Efficiency
Save
12
Critical Success Factors
13
Link to Strategy
Critical Success Factors
Forecast Accuracy
Strategy
Forecast Accuracy
Strategy
Lever Process Evidence
14
Link to Strategy
Critical Success Factors
Be the Market leader in customer service
ImproveForecast Accuracy
• Statistical Forecasting
• Collaboration
Forecast Accuracy
Min % Max %0
25
50
1040
Method
Improve customer service level to 99%
SystemOrganisation
15
Capability
Critical Success Factors
Organisation
Critical Success Factors
R&D
Finance
Customer
Marketing
Operations
Sales
Planning
16
System
Critical Success Factors
17
Complex
Simple
Core
Bespoke
Critical Success Factors
System
18
Complex
Simple
Core
Bespoke
Maximum core functionality and simple
design
Critical Success Factors
System
19
20
Credibility
Critical Success Factors
“It‘s not the highest ROI that wins, or the lowest ROI that loses, it's the most believable ROI that
drives a successful business case”
Nucleus Research “Infographic – Building the financial business case.1045.pdf”
21
Credibility
Critical Success Factors
Focus on the few, main benefits
How long to payback?
Evidence
Be honest
Worst case
Quality not quantity
Simple for people to understand
ROI case studies, User surveys, reference sites, pilot tests, industry data
Walk away if needed
Appease the sceptical
22
A demonstrated ROI will support further investment
Credibility
Collaboration Web Portal
Integration KPI’s
Buy Manufacture Deliver Sell
Op
era
tiona
lTa
ctic
al
Str
ate
gic
Cust
om
erSales & Operations Planning
Network & Inventory Optimization
ProductionPlanning
DistributionPlanning
ProcurementPlanning
DemandPlanning
Sup
plie
r
Credibility
DemandPlanning
Forecast accuracy
DistributionPlanning
Stock reduction
ProductionPlanning
Manufacturing efficiency
ProcurementPlanning
Purchase optimisation
Sales & Operations Planning Balance demand and supply
Network & Inventory Optimisation Optimise logistics network
24
Summary
Business Case
Benefits
Critical Success Factors
• Link to strategy• Link to KPI’s• Measure & publish results
• Sell more and save more• Goal, method, lever
• Link to strategy• Capability – people & systems• Credibility – platform for future success
Maximising the R.O.I. from your Supply Chain Tools
Barry DrummondBusiness Development Manager
Ph: +44 (0)121 506 6592Mb: +44(0)7710 442038
Barry DrummondBusiness Development Manager
Ph: +44 (0)121 506 6592Mb: +44(0)7710 442038