s&op process in practice, sky

S&OP process in practice

19 October 2012, Supply Chain

2 S&OP a t Sky Germany 19 October 2012

Agenda

1 General information on Sky Deutschland

2 Sky Supply Chain

3 Receiver Procurement

4 S&OP Process at Sky

5 Case Study – Avoidance of stock out

6 Lessons learned


Agenda


2 Sky Supply Chain




6 Lessons learned


Sky Germany is the Pay TV leader in Germany & Austria

• 3,132m subscribers (Q2 2012)

• Exclusive broadcasting rights: live football, live sports, films and the best entertainment

• More than 70 channels

• Market-leading HD offering with 58 HD channels, expanding to more than 60 in 2012

• Differentiation through innovation: Sky+, Sky Go, Sky Anytime, Sky Guide, Sky 3D

• Sky content available via satellite, cable, internet and mobile devices with access to almost every household in Germany and Austria

1


Sky is cons tantly growing with a 1 s t pos itive Ebitda in Q2 20121

294,0 303,6282,2

Q2 2012

299,7

Q2 2009 Q2 2011Q2 2010

-47,4

Q2 2011Q2 2010

23,0

-23,4

Q2 2009

-63,4

Q2 2012

Q2 2012

326,7

Q2 2011

276,3

Q2 2010

235,8

Q2 2009

230,6

Revenues in €m

Costs in €m

Ebitda in €m


Sky cus tomer base is cons tantly increas ing based on acce le ra ting Sky+ leve ls and decreas ing churn ra tes from 21 % to currently 10 %1

400

5

10

15

20600

500

400

300

200

100

0

Q2 12

584

Q2 11

116

Q2 10

5

Q2 09

19

109

16

21

0

5

10

15

20

2525

20

15

10

5

0

Q2 12

12

Q2 11

12

Q2 10

20

Q2 09

22

Sky+ Customer in kSky+ penetration in %

Churn rate in kChurn rate in %

Cus tomer base in k

Q2 12

3.132

Q2 11

2.759

Q2 10

2.476

Q2 09

2.364


Agenda


2 Sky Supply Chain




6 Lessons learned


The Sky Supply Cha in respons ibilitie s a re built on the SCOR process

Text

PLAN & CONTROL

SOURCE MAKE DELIVERRETURN &

REPAIRENABLE & MONITOR

SERVICE

Process & IT unit focusing on all

hardware related processes

2


Supply Chain Organiza tion with s trong focus on SCOR process

Supply Cha in

Supply Cha inManagement

Supply Cha in Services

Fie ld ServiceS tra tegic Sourcing

Supply & DemandManagement

3 rd Pa rtyManagement

Pe rformanceManagement

S & OP

Budge t & Cos tManagement

Ma te ria l P lanning

Mate ria lP lanning

2

S & OP

Budge t & Cos tManagement


Agenda


2 Sky Supply Chain




6 Lessons learned


Sky is currently buying three diffe rent hardware types

HD StandardZapper Box

Externa l hard drive for Premium Sky+ Product

HD Zapper Box with inte rnal hard drive for

Premium Sky+ Product

3


Sky provides two diffe rent product types

HD s tandard product

Premium Sky+ Product

3


Sky is buying s tandard rece ive r on dua l sourcing s tra tegy, but premium Sky+ product on s ingle sourcing

separa ted into exte rna l HDD &

rece iver with inte rna l

in ‘000

3

Standard Zapper 398

228

391

Total devices

Premium Sky+

789

424196

822 391 1.213

Supplier 1 Supplier 2


Sky is buying a ll his hardware from 2 supplie r in As ia with a 28 weeks

leadtime3

Supplier 2

Supplier 1


Agenda


2 Sky Supply Chain




6 Lessons learned


Sky shipped in 2011 more than 1.2 million rece ive r to cus tomers . Nearly 50% of rece iver shipments in 2011 a re re la ted to exis ting cus tomers

2

255345

666Sales

CRM

176490

600

Total Needs 1.266835 431

Standard Zapper Sky+

‘000


Sky is buying more than 1.3m rece ivers . More than 10% of our needs a re provided by repa ir process (cus tomer re turns )2

131 21

Deliveries 1.225801 424

Total Inbound

OK Receiver 1.377932 445

Repair 152

Standard Zapper Sky+

‘000


Opera tiona l P lanning @Sky happens da ily on a weekly bas is with input of inte rna l & exte rna l pa rtne rs2

Input Sa les

•Daily adjustments•Weekly periods

Input CRM

•Daily adjustments•Weekly periods

12 month RFCReach

planning

Input Supplie r

•Delivery issues•Airfreight/ Sea freight

Input Finance

• Cash phasing• Capex/ Opex FC

Input Supply Cha in

•Swaps/ Returns•Warehouse capacity

Input Technology

• Software Updates• Defect reasons


Logistics Jour Fixe

Operational S&OP

Tactical S&OP

Strategic S&OP

The monthly S&OP process @ Sky includes every management leve l & planninghorizon

Planning horizon

Focus on

Org level

Timeline

1 – 10 weeks 3 – 8 months 3 – 8 months 3 – 18 months

Short-term planning Mid-term alignment

- Review of mid-term plans - Cash & STB inbound

plans- Purchasing req.

- Product roadmap- Strategic initiatives- Cash & STB inbound plans - Purchasing plans

Operational Head of / Director Director / VP SVP / Board

1st CW / monthBi-weekly 2nd CW / month 3rd CW / month

Information – Guidance – Decisions

Current Plans – Information Requests – Decision Proposals

Participants

- Sales D/AT- CRM- Technology- Controlling / Accounting- Supply Chain

- Sales D/AT- CRM- Controlling / Accounting- Supply Chain

- Sales D/AT- CRM- Controlling- Business Planning (tbd)- Supply Chain

- CFO- CEO (as needed)- Customer Group- Products & Operations- Controlling / Treasury- Technology- Supply Chain

2


Actua l vs . Budge t

Absolute volumes(in k STB)

Delta volumes(in k STB)

Delta pe rcentage

Year to Date as of Dec 2011

Comment:

• Reduction of HD-Share due to the change of Promotions starting Q3 (main focus on Sky+)

Actua l vs . Forecas t2

Absolute volumes(in k STB)

Delta volumes(in k STB)

Delta pe rcentage

Year to Date as of Dec 2011

Comment:

•…

40

30

20

10

34.5

19.119.7

16.711.9

15.0

29.7

18.219.2

33.6

14.6

17.117.8

16.1

7.1

12.7

9.6

14.0

21.4

17.8

20.9

18.619.7

21.1

36.1

19.7

18.911.9

10.8

29.7

19.919.2

37.2

14.6

17.2

40

30

20

10

34.5

17.817.8

7.17.19.69.6

21.421.420.920.919.719.7

226.1 +3%(+6.0)+3%

(+6.0)

Actual/ RFCBudget

220.0

-7% 13% 20% -32% -44% 10% -15% -43% 64% -21% 18% 80%

15

10

5

0

-5

-10

Dec

15.4

Nov

3.0

Oct

-3.1

11.6

Aug

-14.4

Jul

-2.5

Jun

1.7

May

-5.6

Apr

-4.5

Mar

3.5

Feb

2.3

Jan

-1.4

Sep

0% 0% 0% 0% 0% 0% -15% -48% 49% 10% 5% -4%

5

0

-5

-10

-15

Dec

-1.6

Nov

0.8

Oct

1.1

SepAug

-18.0

Jul

-2.6

Jun

0.0

May

0.0

Apr

0.0

Mar

0.0

Feb

0.0

Jan

0.0

9.8

226.1 -4%(-10.3)

Actual/ RFCFC2

236.4

Legend:

Actual shipments (Jan-Dec 2011)

Budget as of CW 01-2011Forecast 2 as of CW 26-2011

Supply cha in provides de ta iled accuracy ana lys is to Sa les & CRM2


Agenda


2 Sky Supply Chain




6 Lessons learned


The s tock forecas t of the Sky+ product mid of 2011 shows an uncritica l s itua tion with regard on the ha lf year leadtime5

200

150

100

50

0

-50

-100

65768392

106115130

160154

123134134137

Jul-12Jan-12Jul-11

SecurityBuffe r

‘000


The s tock forecas t of the Sky+ product beginning of 2012 shows fire fighting has to be s ta rted

200

150

100

50

0

-50

-100

65768392

106115130

160154

123134134137

5

SecurityBuffe r

106125

137

200

150

100

50

0

-50

-100-98

-52

-19-1

324351

154130

111

Jan-12 Jul-12Jul-11

SecurityBuffe r

‘000


S&OP provides no guarantee for a be tte r forecas t accuracy

20

25

15

10

5

0

Jul 12

Jan 12

Jul 11

Actual

Forecast July 2011

+162.000(+84%)

354.000

192.000

10

5

0

Jul 12

20

15

25

Jan 12

Jul 11

Actual

Forecast

155.000

+55.000(+35%)

Actual

210.000

Forecast

5

CRM Forecas t vs . Actua l in ‘000

Sales Forecas t vs . Actua l in ‘000

Σ+217.000

+62%

‘000


Production s top a t Wes te rn Digita l, the main supplie r of our supplie r5


Stock out could be avoided without big impacts on Sky bus iness

4131

42

73

Jun-12

0

20

40

60

80

100

120

140

160

Jan-12

5154

154

130

111106

125

Jul-11

139

5

‘000

SecurityBuffe r


S&OP measures covered Sky demand in 1 s t HY 20125

Inte rna l measures

Safe ty s tock end of 2011 gave us time to se t up a dedica ted team to eva lua te severa l options to act

Pos tpone CRM campaigns

No discount campaigns from sa les for 1s t HY Se t up of task force with Sky Technology &

Da ily s tock & devia tion ana lys is

Exte rna l measures

Direct contact with a ll HDD suppliers to ge t comple te overview of the current and future supply s itua tion

Da ily s ta tus upda tes from supplie rs

Continuous screening current marke t s itua tion and Tha i Flood Impact

Direct re la tionship to HDD sub suppliers made it poss ible to ge t drives ava ilable

in short te rm

Modera te Sa les & CRM adjus tments saved the bus iness plan & s tock

No s tock out


Agenda


2 Sky Supply Chain




6 Lessons learned


Lessons learned

• S ta rt of dual sourcing s tra tegy for externa l hard drives end of 2011

- Awareness of dua l sourcing s tra tegy mid of 2011- Firs t 100k EHDD from 2nd Supplie r ordered

• Implementa tion of CPFR process with rece iver supplier- bi-weekly conference ca lls / meetings- Video conferences with Humax- Providing 12 month forecas ts to a ll supplie r- more de livery flexibility for confirmed orders- quarterly bus iness revues

• Further improvement of S&OP process- Providing be tte r devia tion analys is S&OP participants- Providing de liver transparency to Sa les & CRM- Stronger engagement of board members- Not only budge t, but common sense

• Better unders tanding our supplie rs Supply Chain- Tear down process- Know the subcontractors and the ir lead times

• Implementa tion S&OP Software planned

Any Questions ?