Global chemicals manufacturer - S&OP

Summary

Following a comprehensive analytical review which was approved in full, LCP was employed to design, develop and implement a complete Sales & Operations Planning (S&OP) process; this underpinned by an operational improvement programme for specified factories around the globe.

Project Background

This Chemicals Manufacturer was struggling with very poor reported Customer service and high Working Capital.

Approach

This project embraced the total organisation - Product R&D, through Sales, Manufacturing and Supply Chain Management teams.

LCP defined three main phases of work:
• Definition of business planning processes and specification for missing systems (primarily Forecasting System and Inventory Management Tool)
• Implementation of S&OP - roll out over three regions; initially one region to prove, refine and imbed processes; the remaining two regions in parallel
• Factory Improvement Programme - dedicated and rapid action teams established to quickly assess the key areas for improvement, define the corrective actions and deliver their implementation

The Client recognised the need to develop the competency of its staff and requested LCP to design an S&OP training and education programme to be delivered holistically in each region. This programme encompassed:
• Generic awareness sessions
• Coaching on the job
• Structured learning

Dependent on the content the training was delivered by a combination of the Client and / or LCP

Client Testimonials

LCP deployed small teams of experts capable of working in factory, with regional planning teams on a global basis and with the Regional Management Team. The intimate team approach, where the Client was heavily involved with the solution delivery, achieved high energy and ownership of the delivery process.

A significant factor in the success of the project was the complete acceptance at all levels of the organisation of the need for change - quite surprising for such a large global business.

Success Factors

The sheer scale of the implementation, the initial lack of competence and business disciplines presented significant challenges for delivery. The ability to meaningfully engage all parties was considered a significant success.

Achieving the project programme without slippage and high quality of process delivery were rewarding for all involved.

Results and Benefits

Within a nine month period a global S&OP process had been implemented with all business wide systems in place and integrated.

Simultaneously 5 major production facilities underwent a comprehensive overhaul of operating practices.

Business systems were reviewed and substantially updated:
• Design, definition and implementation of a new fully functional forecasting system built inside the Data Warehouse
• Master data reviewed and substantially cleansed
• Redefinition of the factory production scheduling systems
• Reconfiguration of the SAP Capacity Planning tools

The direct business benefits witnessed are:
• Reduction of the planning cycle time from 7 weeks to 4
• A planning horizon extended from 2 months to 18
• Manufacturing planning increased from 2 weeks to 13
• Focus on working capital reduction delivered circa 15% improvement in the first year
• Reduction in customer queries - tangibly reduced the Customer Service attendance hours
• Global / Regional consistency of planning processes and systems
• Common business performance measures represented on a standard dashboard