Accelerating data-driven
demand planning
How to kick-start a CoE at Elanco
Dylan Lilienfeld (Elanco Animal Health) &
Edward Versteijnen (EyeOn)
14 November 2019
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Centers of Excellence are changing
Why centralizing analytics?
From recent DP & big data benchmark: 21% of companies have centralized analytics function
Centralization Analytics Function
Centralized Decentralized
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Business benefits
•Economies of scale by grouping analyst function
•Not biased by local successes / failures
Attract and retain talent
•Career path for analysts
•Easy to grow competences & standardize process
•Opportunity for challenging projects
•Data Ninjas
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How to kick-start centralized data-driven demand planning?
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BUILD OPERATE TRANSFER
Service Transfer PlanOptimization & reporting handover
Training/Coaching
Build – Operate – Transfer approach
Train data-driven capabilitiesSet-up E2E process
Set-up Engine & reports
Optimization as-a-serviceDedicated reporting as-a-service
Support & Coaching Continuous improvement
Accelerating data-driven benefits and capabilities
Build – Operate – Transfer approach
businessbenefits
planning capability
BUILD OPERATE TRANSFER
%
time
YOUR COMPANY
MANAGED SERVICES
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at Elanco Animal Health
Kick-starting a CoE
Elanco and the diagonal bar logo are trademarks of Elanco or its affiliates
©2019 Elanco
Elanco – our portfolio
Food and companionship enriching lives – we offer products that• Improve animal disease management• Help pets live longer and healthier lives• Reduce the environmental impact of livestock production and increase nutrient digestibility through continued focus on
improved health, enzymes, probiotics, and prebiotics• Enhance animal well-being and help animals live quality lives
Healthy Livestock Animals Healthy PetsWe provide a wide range of products and services to ensure pets live well and live long, including:• Parasiticides• Vaccines• Therapeutics
Our antibacterials, anticoccidials, vaccines, and other products improve animal health and make food safer by preventing and controlling disease. We provide access to products for: • Aqua • Cattle• Dairy cows
If you want to learn more about Elanco pls. visit us under:
NYSE: ELAN
• Poultry• Pigs• Sheep
www.elanco.com
Elanco and the diagonal bar logo are trademarks of Elanco or its affiliates
©2019 Elanco
Why creating a CoE (forecasting)
2. Strategic enabler
Data integrity and consistency in complex
supply networks(LT, MOQs)
Consistently respond to changing and fluctuating levels of complexity
Use deep understanding of metrics and
processes along the value network for
improvements. “Make the link”
Expand CoEto SC analytics
Pool of experts on tools, data sources, metrics
Regulatory differences by species and by regions
1. Sense of urgency
Network dedecisions
Net sales through higher customer service
Manufacturing capabilities and capacities
Capital influences Net Operating Profit influence
Inventory & Net working capital by reduced inventory risks
3. CompetitivenessQuote pwc AH strategy book (2015)
AH Business model characteristics:1. Innovation2. Portfolio Advantage & Com Excellence3. Competitive Forces4. Operational Excellence 5. Regulation
Animal Health, 30 bln market, Elanco approx. 10% MS
Elanco and the diagonal bar logo are trademarks of Elanco or its affiliates
©2019 Elanco
Analysis of current state
▪ Is the data right and at the required level of granularity?
▪ Reports correct▪ Rules and applied filters correct (LCM activities)
▪ Does the S&OP process fit the purpose? ▪ Main focus Local level▪ Right people involved, required data available ▪ Financial planning vs. volume forecasting ▪ Purpose of Forecasting. Not to build inventory ▪ Guidance and governance (e.g. managed supply, safety stocks)
▪ Is the process trained and understood in all affiliates?▪ Accountabilities (e.g. demand / supply in affiliate) ▪ Which metric are we measuring, is it the right one?
▪ Lagging (post event) vs. leading indicators (predictive)▪ Behaviors in the organization?
How to start: CoE or Decentralized Forecasting?Reflection on the Elanco project
Elanco’s choice
Early decision to partner and get external expertise on Forecasting ➔Eyeon
Based on multiple factors ➔ Choice to create forecasting CoE
Elanco and the diagonal bar logo are trademarks of Elanco or its affiliates
©2019 Elanco
Planning of the Project
▪ Define scope, deliverables and milestones. “What should be achieved”
▪ Obtain expectations from Sr. level. “What do they think”▪ Consult external partner to assess data and provide recommendation▪ Assess resources and capabilities inside the organization (HR, IT, process, statistics)▪ Identification of stakeholders▪ Consultation of high performing affiliates ▪ Early decision: Create CoE in India, co-located with Lilly capability center
▪ Put project organization in place
▪ Define Project lead and core team (4 people)
▪ Sr. leaders and LT, make it a top corporation project if it is not already one▪ Project calendar, PJ meetings, StC, ▪ Plan travels if appropriate▪ Support by company PMO, about 130 steps maintained
How to start – Planning
Go-live
03-201801-2018
On-boardingBusiness Case
08-2017
Hiring
10-2017
Reflection on the Elanco project
Elanco’s choice
To not run pilot –confident that we were adopting the best forecasting approach.
Elanco and the diagonal bar logo are trademarks of Elanco or its affiliates
©2019 Elanco
▪ This is big and communication is key. All affiliates are directly impacted. Sites and hubs need to be involved as well. Don’t underestimate informal channels
▪ Strong involvement of the Regional Supply Chain Leaders as advocates for the affiliates. and SC CoE
▪ Collection, clustering and prioritization of all input, concerns, questions. E.g. technical, process, behavior
▪ Channels used for communication: Q&A document, blog, global SC newsletter, online townhall webcasts. Moved to top corporation project list
Change ManagementReflection on the Elanco project
Elanco and the diagonal bar logo are trademarks of Elanco or its affiliates
©2019 Elanco
Impact on people
▪ Roles and responsibilities in affiliates▪ The people suddenly come on stage▪ Segmentation of products allows better assignment of forecasting method. Less volatile products can be
forecasted by statistics→ So do less and achieve more.▪ Expected relief should be invested in difficult to forecast products, underlying assumptions and the
S&OP process▪ Adequately manage different levels of expertise and change agility ▪ Mindset change: Listen to data and not only to M&S
▪ Roles and responsibilities in new Demand Analyst team▪ New role, highly visible, risk to fail▪ Raise awareness of sensitivity about “Do you tell me that you in India can forecast my market better
than I do since years ?”▪ Drive for excellence to proof the concept and to gain the trust
▪ Regional Supply Chain Leaders▪ To support and provide additional training to the affiliates
Change Management – people managementReflection on the Elanco project
Elanco and the diagonal bar logo are trademarks of Elanco or its affiliates
©2019 Elanco
The hiring process
Job Description
Elanco:
• Business case presentation in August
• Prepare a small hiring team
• JD drafted, leveled approved in September
Aug
Physical interviews
Elanco
• Ability to drive
• Technical and process expertise and skills
• Complementary skills in team
• Communication skills
• Team fit
• Talent
Oct
Selection
Elanco
• Decision
• Offers
• Contracts
• Transition periods
Oct
Onboarding
Elanco:
• Company onboarding
• Job onboarding, guided by Eyeon and RSCL
• Prepare team for the role
• Sr. Leaders & global calls
• March start new process
Jan
Analysis
Elanco:
• Collect waves of CVs• Assess and Define
selection criteria • Consider team fit• and complementary skills
in team
Aug
Telephone interviews
Elanco:
• 3 regions involved (NA, EU, AP)
• Formal process
• Decision for final interview
• Negotiate C&B
Sep
Search
Elanco
• Local HR at Lilly center + ext. search firm
• Fine-tuning of criteria
• Preparing for interviews
• Define selection criteria
Aug
Event
Reflection on the Elanco project
Elanco and the diagonal bar logo are trademarks of Elanco or its affiliates
©2019 Elanco
Training of new team
Time from new hire to go-live: 8 weeks despite “some” open items:
▪ Onboarding to the company, IT equipment, trainings, get to know at the location (1 week) at the Bangalore location
▪ Train on the process, statistics, tools, interactions (1 week)
▪ Sensitive: Allocation of affiliates to DA, consider time differences, personal preferences
▪ Introduce to organization in the affiliates and in the regions, Global SC LT call
▪ Prepare the team for the first calls with their partners ww
▪ Simulation of data exchange. ▪ Improve Excel template▪ Adjustments to analytical tool (Tableau)▪ Creation of the assumption tracker▪ SAP changes in APO DP
▪ Processing data from BO reports to tableau / Excel to affiliate and reverse
▪ Fine-tuning of hand-over packages between central team and affiliates
▪ Integration of Eyeon in the monthly planning cycle for some months
Reflection on the Elanco project
Elanco and the diagonal bar logo are trademarks of Elanco or its affiliates
©2019 Elanco
Training of affiliate S&OP members
Training package included ▪ Basis of the approach using statistical methods ▪ Statistical part of the process: Data cleansing, outlier correction, seasonality determination,
method selection▪ S&OP process (re-emphasis on existing process)▪ New communication tools (CollabSite, Excel) ▪ Particular role of an supply chain associate▪ Things which are kept unchanged▪ Planning calendar▪ Material about our products from M&S
Training performed by Regional Supply Chain Leaders▪ Owners of the process, deep understanding of the markets▪ First line of support ▪ Articulate feedback from the affiliates
Reflection on the Elanco project
Elanco and the diagonal bar logo are trademarks of Elanco or its affiliates
©2019 Elanco
Summary - tools
- Exchange forecasts and assumptions with affiliates as part of the monthly process
- Manage initiatives and team calendar
Elanco’s choice
Communication MS SharePoint
Repository - Holding historical data for reporting and visualization purposes. Extension of existing data
SQL DB →OutsourcedMicrosoft Excel
Reporting- Compare stat fc. vs. affiliate fc- Identify areas of improvement- Provide access to broader community
Tableau Excel (ad hoc)
Forecasting- Time series forecasting (not event based)- Outlier correction- Seasonality analysis
SAP APO
Productivity - Facilitate easy data up- and download to SAP APO- Reduce redundancies, review DB structure
APO Excel Add-on
Depending on your existing IT landscape, the objective and the resources you may choose more or less or different tools, e.g. if you are able to integrate the S&OP process into your ERP you may not need some of the listed tools
R
Elanco and the diagonal bar logo are trademarks of Elanco or its affiliates
©2019 Elanco
Go-Live (March 1st)
▪ All systems and resources ready
▪ Hyper care modus, some partners only then realize what’s happening
▪ Daily wrap up in the first week, classification of feedback, action plans, options
▪ Q1: Spend time with the new team!▪ 50% on site with the team▪ Build trust into the new environment▪ Create relationship amongst the team and with partners ▪ Train and provide guidance▪ See their skills and obtain their inputs and proposals
▪ Plan for that particular day – finished after 16h, exhausted and happy
▪ Short-term adjustments, e.g. Excel template
▪ Start measuring statistical forecast accuracy
Go-liveReflection on the Elanco project
Elanco and the diagonal bar logo are trademarks of Elanco or its affiliates
©2019 Elanco
Post Go-Live phase▪ Post go-live: Addressed all feedback from affiliates, adding filters, graphs and aggregation
levels to handover-packages ▪ Starting Phase 2: Optimization and user experience
1. Simplification by consolidating multiple forecasting areas into a single forecasting area
2. Productivity: 1. Easy identification of SKUs performing better by stat or by affiliate 2. APO Excel Add-On to allow easy down- and uploads by the affiliates3. Continuous revisit of forecasting models 4. Starting on causal modelling
3. Synergy: Use of new CoE to support other processes 1. E.g. MTO business2. Support of business planning3. Increasing engagement in other global SC relevant projects
▪ Insourcing of activities hosted at Eyeon. Now completely independent from IT ▪ DB, data handling, data enrichment and reporting
What happened next?Reflection on the Elanco project
Elanco and the diagonal bar logo are trademarks of Elanco or its affiliates
©2019 Elanco
Learnings
▪ High priority in company
▪ Sr. Leadership support
▪ Clear goals
▪ Capabilities internal and/or external
▪ Strong project team
▪ Precise communication
▪ Fast decision making
▪ Diversity in project team
1. Let the data tell the story – be fact based
2. The best data doesn’t help if people don’t change their behaviors
3. Some quick fixes are possible but moving to statistical forecasting is like putting a car on auto-pilot. Need to gain trust. Outlier correction!
4. Define achievable goals considering actual performance, the volatility of the market, the complexity. Use the diversity in the team
5. Understand the use of different sales channels and customer structures to improve the approach and the model
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The result: an effective ánd happy data-driven CoE!
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Q&A
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EyeOn. years ahead
Let’s invest in the future together
www.forecastservices.com
Eindhoven
Amsterdam
Antwerp
Geneva
DublinEdward VersteijnenT: +31 (0)6 53 53 96 15 [email protected]
Dylan [email protected]