Transcript Plan 2.0: Supply Planning Re- Engineering Journey of a Web 2.0

Plan 2.0: Supply Planning ReEngineering Journey of a Web 2.0
Josh Miller
Shutterfly
Daniel Soosai
Gaea Global
About the presenters
• Josh Miller
• Daniel Soosai
Director Procurement
Founder & Supply Chain Strategist/Architect
Shutterfly
Gaea Global
Josh Miller is the director in charge of the
Daniel Soosai heads the Supply Chain
supply chain and procurement organizations in
consulting practice. He has worked with
Shutterfly. In his current role he is in-charge of
numerous customers ranging from Fortune 500
establishing efficient supply chain and
customers to early stage start up devising
procurement business processes. Prior to
innovative and value focused supply chain
Shutterfly Josh was working with Amazon in
solutions . Prior to Gaea Global, Daniel was
London managing the European inventory and
with Oracle for 11+ years building supply chain
buying teams.
products and architecting supply chain solutions
for Customers. He last served in Oracle as Sr.
Josh holds a BS in Industrial Engineering from
Purdue along with an MS Mechanical
Director in charge of selling Supply Chain
Applications to High Technology Industry
Engineering from MIT and an MBA from
MIT/Sloan School of Management.
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
Making the world a better place by helping people share life’s joy
•
Shutterfly is an internet-based social
expression and personal publishing service.
•
Offers free online photo storage, and has
never deleted a photo.
•
Founded in December 1999,
•
Headquartered in Redwood City
•
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.
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.
•
Over 2.3 billion images have been uploaded
to Shutterfly.
Supply Chain Overview
•Landscape
•Mfg Facts
• Small team – 5 people, 2 centralized buyers
• Approximately 30 suppliers
• Small retail SKU count across 13 product groups
• 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
What does Gaea do?
Gaea’s core
competency
Gaea’s offering
Gaea’s goal
Operations Strategy
and BPR
Process
Thought
Leadership
Gaea’s Oracle
Application
extensions
“g-apps”
Industry
Expertise
Oracle
Technology
Mastery
Oracle Functional
Consulting
Oracle Technical
Implementation
Gaea Oracle Bolt-On
Solutions - “g-apps”
Maximizing
Gaea client’s
ROI on Oracle
Enterprise
Software
Investments.
Custom Customer
Applications
We achieve our goals by successfully implementing Best-in-Class business
processes in a risk-mitigated approach.
Gaea’s Focus Area
Oracle
Supply Chain
Management
-- Inventory, WMS
OM, Shipping,
WMS & MFG.
Oracle
Business
Intelligence
-- OBI EE &
Business
Intelligence Apps
Industry Focus
 Consumer Electronics
 Network Equipment Mfg
 Semiconductor
Oracle Demand
Management
-- Demantra DM
RT S&OP,
Adv. Forecasting
& TPO
 Web 2.0, Media & Entertainment
Oracle Supply
Planning
 Consumer Packaged Goods
-- ASCP, GOP,
CP, IO, PS
S&OP
 Industrial Manufacturing
 Distribution
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.
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
Revenues
Gross & Operating Margin
$ MM
Sales (%)
$200
60%
50%
$150
40%
$100
30%
20%
$50
10%
$0
0%
2004
2005
2006
2007
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
Source: 10-K
Growth challenges scalability
Implications across Shutterfly’s Supply
Chain Organization
Number of
SKU
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
Order
Volume
Organization
Size
 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 Structure
Multiple source of truth for the BOM structure maintained in excel
Pre-BPR Supply planning process
Excel 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 Structure
Product Portfolio was rationalized, structured efficiently …
Post-BPR BOM and Product Structure
… and managed in the system
Post-BPR BOM and Product Structure
Solution Enabler I: Streamlined Plan to Procure process with
consistent inventory policy
Post-BPR BOM and Product Structure
Solution Enabler II: Productivity enhancing exception based
planning
Post-BPR BOM and Product Structure
Solution Enabler III: Streamlined ASCP process with
consistent inventory policy
Post-BPR BOM and Product Structure
Solution Enabler IV: Detailed analysis capabilities using Demand
& Supply pegging, HZ Plan etc.
Case Study II: Post-BPR BOM and Product Structure
Solution 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
Product Portfolio was rationalized and structured
efficiently and managed in the system
Multiple source of truth for the BOM
structure maintained in excel
Transformation enabled by Supply
Planning BPR
Excel based error-prone BOMexplosion & 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
Q U E S T I O N S
A N S W E R S