Global Supply Chain Systems

UCSC Management of Technology Course

February 11, 2010 by Kai Hypko - Plantronics

Plantronics Secret
Agenda Items

Who Am I?
Plantronics
Global Supply Chain Challenges
Plantronics Supply Chain Challenges
SCORE Project
Project Methodology
The Economy and its impact
Now what?

Time permitting: Value-Driven Replenishment

Plantronics Secret
My Story

German
Came to US in 1988
BS Degree in MIS & BUAD
17 years in Supply Chain
Hi-Tech, OEM, Retail experience
Professional Associations
APICS, the Association for Operations Management
Board of Directors of NorCal OAUG
Aberdeen Research Advisory Council member
Speak frequently at Supply Chain events such as CES, ESCA
and Oracle Open World.
Personal Motto:
You get what you tolerate
Joined Plantronics in Fall 2006
Plantronics Secret
What do I do?

Act as enterprise wide process improvement evangelist and

change agent.
Ensure that all business transformation programs align with the
strategic direction of the companys initiatives.
Manage project budgets and timelines.
Interface and communicate broadly across the company to lead
change management and implementation efforts. Inform and
influence key stakeholders to gain buy in.
Collaborate with internal organizations to establish priorities, make
business trade-offs, and sequence initiatives necessary to achieve
long term process goals.
Work closely with internal business process owners and support
functions to scope program deliverables. Develop and implement a
plan (roadmap) to achieve objectives for each of these processes.
Partner with functions owners, third party system integration
partners and consultants to plan and implement process
improvements.
Plantronics Secret
 Plantronics Profile

Founded by two pilots in 1961

Over 40 years experience in
voice
Mission Critical Applications
A Worldwide Corporation
5,500 employees
Offices in 20 countries
FY 2009 Revenue of $766M
Publicly traded on NYSE
PLT
Family of brands
Plantronics
Clarity

Plantronics Secret
 Leading worldwide designer, manufacturer,
marketer and seller of lightweight
communications headsets, telephone
headset systems, and accessories for the
business and consumer markets under the
Plantronics brand.
Title of Presentation Here
Sub-Titleand
Manufacture Here
sell, under our Clarity
brand, specialty telephone products, such
as telephones for the hearing impaired, and
other related products for people with
special communication needs.

Plantronics Secret
 Competitive Business Environment

Customers are demanding: Increasing business risks of :

Accurate and timely commitments Too much inventory

Shorter lead times Inventory in the wrong place
Flexibility Ordering the wrong inventory
Product differentiation Missing delivery dates
Dedicated inventory Losing orders
Visibility into the supply chain Shipping the wrong products
High quality Increased expediting costs
Automation Losing customers
Lowest costs Increased obsolescence

Forcing businesses to better manage:

Inventories Supply/Demand Stocking policies

Ability to promise Forecasts VMI/SMI processes
Global suppliers Cycle time Replenishment

Plantronics Secret
Global Supply Chain Observations

Supply chain management (SCM) efforts deliver the

greatest results when SCM is part of an overall business
strategy not a stand alone effort

SCM is most likely to under deliver when there is poor

connection between functions across a total business
often noted by poor supply chain visiblity and lack of best
practice sharing internally

Source: Computer Sciences Corporation (CSC) and Supply Chain Management Review (SCMR) 2006 Survey

Plantronics Secret
Global Supply Chain Observations

Despite potential economies from global supply chain

efforts, most companies optimize locally

In spite of the rhetoric around the importance of

customers, few firms are collaborating closely with key
customers

Companies continue to install software before rethinking

their underlying processes and expect root cause
problems to be eliminated

Source: Computer Sciences Corporation (CSC) and Supply Chain Management Review (SCMR) 2006 Survey

Plantronics Secret
World Class Supply Chain

World Class Supply Chain Companies

collaborate effectively internally to optimize processing

work closely with key suppliers and customers

effectively apply technology as an enabler

Source: Computer Sciences Corporation (CSC) and Supply Chain Management Review (SCMR) 2006 Survey

Plantronics Secret
Recent Key Changes at PLT

Acquisition of Altec Lansing

Entering of Consumer Retail Market
New factory in China
4 additional Distribution Centers

Plantronics Secret
 Plantronics Challenges

Customer service issues Multiple source systems

Constant reschedules Competitive issues
Too much of the wrong inventory Inflexible planning tools
Manual disconnected planning
processes (Excel) Fragmented planning data
Too much obsolete inventory Poor forecasting capability
No formal S&OP Process Global supply chain requirements
Disparate Planning Systems Changing business conditions

Plantronics Secret
 PLT Supply Chain

Where is it? UK

Netherlands

Japan
United States

China

Mexico

Brazil

Australia

Flow of Goods

Manufacturing

Manufacturing w/o Oracle

Distribution
Warehouse
Plantronics Secret
PLT Supply Chain 2006

We manufacture 75% of our own products

2 factories (Mexico, China)
8 global distribution centers
Buy raw material to forecast
Pack to order
Assemble to min-max settings
Fulfill orders through our DCs
Decentralized purchasing & planning
~3000 Finished Goods items

Plantronics Secret
PLT Supply Chain Status 2006

Inventories have increased dramatically

Customer OTD has dropped
Supplier OTD is unknown
Ability to make accurate commits has dropped
Lead time has increased
Forecast accuracy is low
Lack of ability to analyze potential opportunities quickly
Global environment; localized system utilization

Plantronics Secret
 SCORE Project

Launched the SCORE Project

Supply Chain Optimization and Re-Engineering

Establish a world-class Supply Chain by:

Creating a global, integrated, collaborative system and
processes which are scaleable, without legacy knowledge
and added manpower

Single Source of Truth

Plantronics Secret
 Project Objectives

Improve Forecasting Process & Accuracy

Increase Inventory Turns
Reduce Excess & Obsolete (E&O) Inventory
Provide More Accurate Ship Dates to Customers at point
of Order Entry
Enable a faster, more effective Sales & Operations
Planning process
Accurate, Global Inventory Visibility
Issue correct PO prices and receive acknowledgements
and commits from suppliers
Automate Manual Transactions
Plantronics Secret
 SCORE Project

Supply Chain Superiority is not achieved with a single

project, but is an evolution of relentless focus and
continuous improvement Author unknown

Plantronics Secret
 Overall PLT Project Plan 2007
Jan-07 Jan-08 Jan-09 Jan-10 Mar-10

Demand Forecasting & Demand S&OP Promotions Management Customer Collaboration

Management (Demantra) (Demantra) (Demantra) (Portal / CMI)

Promotion Optimization
(Demantra)
Trade Management & POS

Supplier Inv Optimization

Collaboration (Proof of
(i-Supplier) Concept)

Warehouse Optimization &

Global Order Mobile / Sensing Services (WHMS)
Supplier
Promising
Collaboration
(GOP)
(Consignment/VMI)

Altec
iSupplier
ASCP roll out
Stop Ox
Product Life Cycle Mgt
Advanced Planning

Advanced Planning
(Constrained Plan)

Data Clean-up

Strategic Network
Transportation Planning (G Log) Optimization (SNO)
(Review / Proof of concept)
Supply
Chain
Quick Supply Chain Production Scheduling
Wins Business Intelligence (DBI) ?Upgrade R12.X?

Plantronics Secret
 Overall PLT Project Plan July 2008
Jan-07 Jan-08 Jan-09 Jan-10

Demantra Demand Planning Demantra 7.2 Demantra S&OP Demantra Promotions

upgrade Management & Optimization

Customer Collaboration
(Portal / CMI)
Inventory
Optimization

Supplier
Collaboration
(i-Supplier)
Warehouse Optimization &
Mobile / Sensing Services
Global Order (WHMS)
Global Order Promising, ROW
Supplier
Promising, EMEA
Collaboration
(Consignment/VMI)

Agile

Advanced Planning & Scheduling

Strategic Network
Optimization (SNO)
Advanced Planning, Phase II

Altec
Data Clean-up iSupplier Transportation Planning (G Log)
ASCP
GOP

Supply Chain
Business Intelligence (DBI)
Production Scheduling

Plantronics Secret
 Overall PLT Project Plan Jan 2009
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

Demantra Demand Planning Demantra 7.2 Demantra S&OP Demantra Promotions

upgrade Management & Optimizati

Customer Collaboration
(Portal / CMI)
Inventory
Optimization

Supplier
Collaboration
(i-Supplier)
Warehouse Optimization
Mobile / Sensing Services
Global Order (WHMS)
Global Order Promising, ROW
Supplier
Promising, EMEA
Collaboration
(Consignment/VMI)

Agile
APS & Demantra
enhancements
Advanced Planning & Scheduling

Strategic Network
Optimization (SNO)
Advanced Planning, Phase II

Transportation Planning

Altec
Data Clean-up iSupplier
ASCP
GOP

Supply Chain Production Schedulin

Business Intelligence (DBI)

Plantronics Secret
 World Class SCM

Supply Chain transformation

Old Model: Push New Model: Pull

(Linear Supply Chain) (Integrated Networks)

Supply-Centric Demand-Driven
Internally Focused Global
Automation
Vertically Integrated Virtual Supply Chains
Information
Physical Asset Based Decision Based
Mass Momentum Lean Practices

Plantronics Secret
 Oracle Advanced Planning Model

E-Business planning solution: zero latency, real-time collaboration

Customers Suppliers
Enable closed loop
Tier 2 collaborative planning
processes across your value
Tier 1
chain
Have complete supply chain
Portal Portal visibility
Internet Make better decisions
Automated Exceptions
React immediately to
disruptions in supply chain

Marketing
Manufacturing Build a responsive Supply
Sales Chain on INFORMATION
Demand Hub & Multi- Consensus forecast Single
not inventory
Mfg. dimensional analysis and prod. plan holistic plan

S&OP Process Supply Planning

Business Intelligence

Plantronics Secret
 Planned APS Systems Architecture
Forecast Forecast Forecast Demantra
Forecast Forecast Forecast Forecast Forecast

Consumption
New Max
BTO /
Distrib Distrib Distrib Distrib Distrib PTO
Distrib. Min
Inv. Org Inv. Org Inv. Org Inv. Org Inv. Org
Inv. Org
Below Min
Distrib
Inv. Org Internal Sourcing Rules / SO/PO

Distrib
Inv. Org North America
EMEA Mfg / Dist. Asia Mfg
Mfg / Dist.
Inv. Org Inv. Org
Inv. Org

Pricing
Promise Date

Sourcing
Sourcing

Quantity
ASL Forecast
Quotations Receipts
VMI/CVMI Invoices
Supplier Portal QOH
Min/Max

Supplier Supplier Supplier Supplier Supplier Supplier

Plantronics Secret
 Planned APS Systems Architecture
Customer
Forecast Customer
Forecast Customer
Forecast
Demantra
Customer
Forecast
Customer
Forecast Customer
Forecast Customer
Forecast Customer
Forecast

Consumption
New Max
BTO /
Distrib Distrib Distrib Distrib Distrib PTO
Distrib. Min
Inv. Org Inv. Org Inv. Org Inv. Org Inv. Org
Inv. Org
Below Min
Distrib
Inv. Org Internal Sourcing Rules / SO/PO

Distrib
Inv. Org North America
EMEA Mfg / Dist. Asia Mfg
Mfg / Dist.
Inv. Org Inv. Org
Inv. Org

Pricing
Promise Date

Sourcing
Sourcing

Quantity
ASL Forecast
Quotations Receipts
VMI/CVMI Invoices
Supplier Portal QOH
Min/Max

Supplier Supplier Supplier Supplier Supplier Supplier

Plantronics Secret
Key Methodologies & Assumptions

Design Globally Implement Locally

80/20 rule; Implement quickly, evolve quickly
No Customizations Work within the software
Software based re-engineering
Get to decisions quickly; avoid decision paralysis
PLT Resources available per required allocation to drive and
participate in project
Project participants have real ownership to make decisions
Self Service project information warehousing
Team environment Win as a team, Lose as a team

Plantronics Secret
 Keys to Success

Super users are critical

Core team involvement and support is
paramount
People Executive support is critical
People Change Mgt, Communication &
Training are always underestimated

Process is the glue

A bad process is even worse with the
Process Process
Technology right technology.

Software Based
Process Re-engineering

Technology

Plantronics Secret
 Example of a detailed Milestone plan
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV
2/11 2/15 2/13 2/8\15
STABILIZATION PERIOD

2/18
EMEA
APS

UAT Users
Setup
TST1 Instance
Go-Live
2/8 5/15

Train &
Communicate
Optimization

2/6 2/25 3/7

3/15
3/24 4/4
4/7
Analysis & Adoption
INV.

Kick-off Proof of Design INV. Optimization Phase II

Concept Sign-off UAT
(Raw Material & APS Plan Integration)
& CRP Go Live!

Inventory Optimization Phase I (Finished Goods)

2/19 3/3 3/26-3/28 4/7 - 4/11 4/18 5/5 - 5/7 5/14 - 5/16 5/19

First EMEA ATP Order Booked

Proof of
EMEA

Kick-off Design Shop EMEA Design UAT Go Live!

GOP

Santa Cruz Concept CRP Sign-off

SC Net
Meeting STABILIZATION PERIOD
5/1 5/5 5/14
2/28
Document Processes & Roles/Resp.
All OM Customizations & Extensions for BV1 & US1 Documented
Process Train &
Review Documented Communicate

3/5-3/7 4/2 4/4

Supplier Pricing

1/18
4/14
APS Phase II

CRPI UAT Pricing Roll-out

Kick-off 3/31 4/7 4/9 STABILIZATION PERIOD

Go Live!
2/14 Process Train &
3/14
Documented Communicate
Capacity

Design 2/27 - 2/29 Design 4/2 4/4

Shop Sign-off 3/26-3/28
- Select 2 Pilot STABILIZATION PERIOD
Go Live! APS Phase II Release II
Kick-off Suppliers Material Constraints
CRP
3/15 UAT 3/25 4/4

Process Train &

Documented Communicate

4/30 5/1-5/20
5/28 5/30 6/23 - 6/27
6/27 7/3
GOP

Refinement 7/14 7/18

Kick-off
Key Scope Assumptions
Design CRP
Review 7/21 7/25
CRP 7/28 7/31
Project is a rollout, not a re-implementation

Review OX Design & Processes

UAT
STABILIZATION PERIOD
Base-line GOP per EMEA design
Go-Live!
ALTEC INTEGRATION

5/28 5/30
Not scoped for this timeline
Phase I & II

Add BPX into APS 6/23 - 6/27

4/30
Refinement 6/27 7/3
No Inv. Optimization
APS

Design
Kick-off Review
CRP 7/21 7/25 No VMI / CVMI

STABILIZATION PERIOD
CRP No Customization regarding internal IR / ISO

Training
7/28 7/31

UAT
No Allocation / Reservation customizations
Go-Live!
No customizations

5/28 5/30
6/23 - 6/27
4/30 Refinement 6/27 7/3
iSupplier

Design
Review CRP 7/21 7/25
Kick-off
CRP 7/28 7/31
Hong Kong
Location Milford UAT STABILIZATION PERIOD

Go-Live!
Location
(If Necessary)

1/21 1/31 2/18 2/29 3/18 3/29

Roll-Out Roll-out
EMEA ALTEC

Supply/Demand Team
Go-live Sales Training Sales Go-Live
1/21 1/31

PLT Asia Pacific

Sales Team
Demantra

2/18 2/29 3/18 3/29 4/16 4/30

Supply/Demand Team
Sales Training Sales Go-LIve
Go-Live

SUPPORT & STABILIZATION PERIOD

5/15 6/20 7/16 7/20 TBD TBD TBD TBD

Assessment on architecture & Integration 5/29
S&OP

TBD
Establish a new S&OP Test Instance Design Sign-
Kick-Off Global Design POC CRP1 CRP2 CRP3 UAT
Review & Leverage Out of Box worksheets off
Shop SC Supply / Demand Team
Go-Live
Globally

Plantronics Secret Integration IT Process

Documented
Train &
Communicate
Typical Project Members
Core Team Sponsor
Director Supply & Demand
Project Leads
Sr Manager Supply & Demand
Keys:
Site Leads
Director Materials
Planning Manager
Mexico Plant
AEG Division
Executive sponsorship
Sr. Supply Chain Manager EMEA
Director Sales North America Cross functional inputs
Director Materials Clarity Division
Super Users Cross Geo participation
Planning Manager EMEA
Supply/Demand Analyst
Sales Manager
EMEA Super Users are key
Sales Manager drivers to success
Forecast Analyst Clarity
(advocates)
Team Members
Finance
Finance Oracle PMO for ongoing
IT Business Analyst support
Applications
Data Base (Technical)
Consulting Lead:
Supply Chain Fusion
Oracle PMO Office
Plantronics Secret
Project Risks to Manage

Resistance to Change (not embracing new business

processes/System)
Jump Ship mentality at the first sign of struggle
Competing Departmental Interests (projects, etc.)
Scope Creep
Discipline to new processes
Availability of resources

Plantronics Secret
 Key to Success Knowing What's Ahead

Weathering the Storm

Go-Live Growth & Competitive

Advantage
Efficiency

Minimize adoption
curve

Time

We must weather the storm and make it through the adoption phase.

Plantronics Secret
Implementation Lessons Learned

Selection of the right Project Owner

Pick the right Partner
Eight quarters are less than 2!
Change Management
Communicate, Educate, Communicate
Go-live IS the beginning.resolve, stabilize,
EVOLVE.
Set expectations appropriately
Give yourself some buffer for the unexpected

Plantronics Secret
 Know Your Corporate Culture

Analysis Paralysis
Complete Consensus driven
Solution Buy In without trust & leadership
Infusion into the culture &
Education

Change
Management

Business Process

When it comes to change managementif you get Systems

to the finish line first but youre alone, you lose.

John P. Kotter
Harvard Business School Professor
Plantronics Secret
Where are we?
By late 2008 / early 2009 we had fully deployed
Multi Org ASCP
Demantra Demand Planning
GOP
iSupplier
Collaborative Planning
Inventory Optimization
DBI
Began to see promising supply chain changes
OTD improvements
Less excess & obsolete
Fewer air freight
Inventory stabilized

Plantronics Secret
The RECESSION

Global economic downturn

Worldwide recession

Goal is to maintain profitability

Plantronics taking action
18% layoff worldwide
Executive pay cuts
Suspension of travel
Hiring freeze
Close China factory
Sell Altec Lansing
Project cut backs
Plantronics Secret
 Overall PLT Project Plan Jan 2009
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

Demantra Demand Planning Demantra 7.2 Demantra S&OP Demantra Promotions

upgrade Management & Optimizati

Customer Collaboration
(Portal / CMI)
Inventory
Optimization

Supplier
Collaboration
(i-Supplier)
Warehouse Optimization
Mobile / Sensing Services
Global Order (WHMS)
Global Order Promising, ROW
Supplier
Promising, EMEA
Collaboration
(Consignment/VMI)

Agile
APS & Demantra
enhancements
Advanced Planning & Scheduling

Strategic Network
Optimization (SNO)
Advanced Planning, Phase II

Transportation Planning

Altec
Data Clean-up iSupplier
ASCP
GOP

Supply Chain Production Schedulin

Business Intelligence (DBI)

Plantronics Secret
 Overall PLT Project Plan Jan 2010
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
Demantra S&OP
Demantra Demand Planning Demantra
7.2
upgrade

Demantra Promotions
Customer
Management & Optimizat
Collaboration
Inventory (Portal / CMI)
Optimization

Supplier
Collaboration
(i-Supplier)
Warehouse Optimization
Mobile / Sensing Services
Global Order (WHMS)
Global Order Promising, ROW
Supplier
Promising, EMEA
Collaboration
(Consignment/VMI)

Agile
APS & Demantra
enhancements
Advanced Planning & Scheduling

Strategic Network
Optimization (SNO)
Advanced Planning, Phase II

Transportation Planning (G Log)

Altec
Data Clean-up iSupplier
ASCP
GOP

Supply Chain Production Schedulin

Business Intelligence
(DBI)

Plantronics Secret
Supply Chain Actions

Recession impacted the positive results we

were expecting at this time of the project

The installed Oracle applications allowed us to

react to the changes quicker and better

Better information better decisions better

results

What did we do?

Plantronics Secret
Utilizing Oracle to Forge Actions

Orders dropped 40%

Orders got cancelled
Some suppliers went bankrupt
Inventories of certain items increased
Some regions more troubled than others
Fewer people to do the work

Plantronics Secret
Demand Planning (Demantra)

Ability to review globally forecast vs. actual

Ability to drill down into problem products
Ability to drill down into problem regions

Quickly re-forecast and push back into Oracle

Single global view for all to see and
understand
Single source of Truth

Plantronics Secret
High Level S&OP

Plantronics Secret
 Demantra
Forecast Entry

Plantronics Secret
 Demantra
Sales Analysis

Plantronics Secret
 Demantra
Drill Down into Exceptions

Plantronics Secret
Global Supply Planning (ASCP)

Ability to understand global supply/demand

picture
Ability to predict potential quarter ending
inventory
Ability to monitor inventory daily
Ability to quickly shift from make vs. buy

Take action on oversupply situations

Identify future shortages and prepare
Understand factory utilization make vs. buy
Plantronics Secret
Planning Messages

Plantronics Secret
Horizontal Plan

Plantronics Secret
Portals (iSupplier/Collaborative Planning)

Ability to communicate with suppliers in near

real time
Ability to re-forecast new requirements
Ability to make changes quickly on existing
POs

Pushed VMI to reduce buyer work load

Expanded CVMI to reduce our inventory

Plantronics Secret
 Collaborative Planning
Order Forecast

Supplier can view the

published order forecast
details in the Vertical or
Horizontal View

Order forecast

VMI Replenishment

Plantronics Secret
 Collaborative Planning
Supply Commit

Is the response
given by the CM
against the
order forecast

Supply Commit

Plantronics Secret
Order Management (GOP)

Ability to quote actual deliveries based on near

real time planned supply information
Ability to view global finished goods supply for
maximum utilization at time of order
More efficiency in our commit process

Plantronics Secret
Results

In spite of revenues dropping 40%, we are on

track to remain profitable by reducing our cost
structure 30%
In spite of an 18% lay off we are able to
maintain customer service levels AND reduce
inventories because we have the right tools
In spite of supplier turmoil we are able to
ensure supply by quickly identifying trouble
spots in our system

Plantronics Secret
 What to Do In Tough Economic Times?
Focus on what you can influence
Demand sensing
Inventory levels
Material cost
Build speed & flexibility into your Supply Chain
Near real time planning; scenario planning
Sourcing adjustments Make vs Buy
Send the right signals quickly
Utilize the information and make decisions. Quickly
Plan, execute, measure, adapt
Prepare NOW for the future
You get what you tolerate
Plantronics Secret
Conclusion

Supply Chain Management is a very exciting profession

Ever changing
Essential to a companies success
Everybody needs it
Innovation & Leadership
Those that do it best are among the most successful
and profitable companies in the world
Apple, Nokia, Wal-Mart, Procter & Gamble, Toyota,
Cisco, Samsung, Best Buy, Coca Cola, Nike, HP, IBM

Plantronics Secret
Questions?

Plantronics Secret
What would happen if we sell Milk?

Things you cant do:

Stockpile
Build ahead
Min-Max
Wait for the order
Milk to forecast
Force a paradigm shift in supply & demand

Plantronics Secret
Current approach

Forecast

Wait for Customer Order

Right Shipment
Inventory? US Retail
PLT
Sales Order Customer

Buy RM to Forecast
No visibility into Customer
Build to min/max based on history

Plantronics Secret
 Current approach - detail
PLT Customer
Forecast based on bookings Stores
Buy RM to Forecast
Stores
Build FG to min/max based on history
Stores
Customer
Disti Center
Stores

Stores

Sequential, Non-Synchronized Events Customer

Disti Center Stores
Suppliers Buy RM to Fcst Stores
Suppliers Sales Order Customer Customer
Stores
ERP System Disti Center
Buy RM to Fcst
Suppliers
Stores
Suppliers Shipment
Build per SO/PO Right Customer Stores
China Plamex
Inventory? Disti Center
Suppliers
Stores
Suppliers
Stores
Customer
Suppliers Disti Center
Stores
Build to Min/Max
and Sales Orders Stores

Stores

time
Time
time
Plantronics Secret
 Real Time Consumption Driven Model
PLT & synchronize activities with our customer
Collaborate Customer
Stores

Stores

Stores
Customer
Disti Center
Stores

Stores
Customer
Disti Center Stores
Suppliers Buy RM to Fcst Stores
Suppliers Sales Order Customer Customer
Stores
ERP System Disti Center
Buy RM to Fcst
Suppliers
Stores
Suppliers Shipment
Build per SO/PO Customer Stores
China Plamex Disti Center
Suppliers
Stores
Suppliers
Stores
Customer
Suppliers Disti Center
Stores
Build to Min/Max
and Sales Orders Stores

Stores

time time
Plantronics Secret
 Real Time Consumption Driven Model
Collaborate & synchronize activities with our customer using Point of Sale (POS)
Forecast based on customer consumption
Stores
Buy RM to consumption Forecast
Customer Stores
Disti Center
Build based on actual consumption Stores

Stores
Suppliers
Customer
Stores
Disti Center
Stores
Suppliers
Stores
Customer
Customer
Disti Center Stores
ERP System Suppliers
China Stores
Plamex
Stores
Customer Suppliers
Disti Center
Stores

Stores
Suppliers
Customer
Stores
Disti Center
Stores
Suppliers
Stores

Suppliers
time
Plantronics Secret
 Replenishment Progression: A Journey

Rule of Thumb Pull:

Channel pulls as needed.
Weeks of supply or simple statistics used to choose stock levels.
Demand is an order
More advanced

CPFR:
Collaborative forecast & replenishment.
Channel continues to pull
But retailer shares POS data to help vendor improve forecast
VMI
Vendor places reverse PO on behalf of channel
Vendor owns inventory risk in return for share of efficiency gain.
Value-Driven Replenishment
Like VMI, but inventory risk depends on network profitability, leverage
Vendor conducts demand sensing, shaping
Network re-design to optimize inbound supply chain for flexibility

Plantronics Secret
 Winning at the Store Shelf: Distinct Projects At Each Stage

Stage I II III IV
Reactionary Stabilize the Core Demand-Driven Value-Driven
Partner $ V
relationship
Metrics Compliance Improve replenishment. Synchronize supply Redesign network for joint
Reduce costs. Improve chains for risk value creation
service. mitigation/profit
Organization Functional silos; Cross-functional Joint demand Joint business planning,
replenishment entirely involvement, but still response market outreach
short-term sales driven order vs. profit
Tunedriven POS
Buffer Track sensing +
Inventory Plan Shift riskTarget
to supplier Channel managed;
Stock Supplier plans and
DC-level Planned attribute
at store shelf
without regard
WOS for vendorBased
plans based
on on managesSell-
based on level based on optimal
forecast
system economics;
Based sell-in; channel
Monthlyshares store DC-level
throughsell- balance between
+ customer
channelOn plans
EDI forecastStatistical through + experience and cash flow
Demand
Order Trigger Channel History
places+orders Forecast
Channel places PO based Co-Plan
Supplier sends Shaping
Predictive demand
based on Orders
historic pull +
on warehouse withdrawal Promos
reverse PO based +
shaping programs based
with a 5-10 day latency with a 2-5Svc.
dayLevel
latency on store DC Network
on supply network
Goal behavior and capability Flex
promotions
Culture What ever the retailer Partner to improve Joint value Aggressively partner to
says replenishment execution creation improve the customer
experience
Push sell-in deals Sell-through sales
Pull CPFR
Plantronics Secret
incentives
VMI VDR
Major Changes

Collect POS regularly (daily/weekly) at the store level

Collect OH information from customer distribution
centers daily
Build FG based on consumption
Use POS information to drive builds
Either anticipate replenishment or auto replenish

Plantronics Secret
Benefits

Build to consumption, not history based min/max

Carry little to no FG
Higher fill rate
Higher on-time delivery
React to consumption changes in real time
Less E&O

Plantronics Secret
Q&A

Plantronics Secret