supply chain in an evolving world: disruptive technologies, new business models, and operation...
TRANSCRIPT
© 2013 Belden Inc. | belden.com | @BeldenInc
John Vu VP, Global Supply Chain Belden, Inc
Supply Chain In An Evolving World: Disruptive Technologies, New Business Models, and Operation Impact
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• Belden Inc Company Profile
• Portfolio Expansion into Strategic Markets
• Regional to Platform Business Model
• Emphasis on Increased Inventory Turns and Free Cash Flow
• Increased Focus on Improving Delivery
• Governmental Regulation on Logistics Industry
Agenda
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Belden Inc
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Belden Brands
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Belden Platforms 2015 Q2
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Material Pull System Transition from Made to Stock to Made to Order
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• Objective: Decrease Inventory Levels & Improve Customer Satisfaction
• Transition to Made to Order from Made to Stock • Development of Material Pull Systems (MPS) − Designed web-based MPS, with physical kanban cards, that aligned
manufacturing value streams with true customer demand. − Real-time tracking of kanban inventory levels − Electronic signals from inventory warehouses to appropriate
manufacturing plant − Lessened warehouse travel time to receive inventory as well as pick
orders − Transparent to customer delivery and quality expectations − Increased free cash flow
Focus on Increased Inventory Turns & Free Cash Flow
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Before Implementation of MPS at Richmond DC
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After Implementation of MPS at Richmond DC
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Results of MPS
2009 JOP 2015 YTD Improvement
OTD 92.0% 96.2% 4.2%
Quick Turns Rate 4.9 9.4 4.5
FG Inventory $72.4M $31.4M $41.0M
Open Locations @ RDC
2% 15% 13%
% Production Applied to Cust.
Orders55% 90%+ 35%
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Inventory Need a more dynamic, sustainable process and inventory structure that
adapts to changing demand profiles
ABC/XYZ methodology being leveraged on broader scale and tracked through LDM To date: $3.3M Kanban Inventory Reduction
Will develop best practices
LDM Daily Tracking (Materials group)
Continous Improvement in Inventory Turns
ABC/XYZ delivers a vision and an inventory strategy that can support our corporate objectives.
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Emphasis on Customer On-Time Delivery
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Monthly SIOP – Sales, Inventory, and Operations Planning
Historical Sales Data
Customer Forecasts
Project Pipeline
Market Intelligence
12 Month Demand forecast
Manufacturing Capacity Review
Manufacturing Cell
Production Plan
Forecast Accuracy
Sales / Marketing Supply Chain / Operations
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Daily Backlog / Capacity / Lever Reviews by Plant
Low Backlog – Pull levers to flex staffing down or move work
into this area
Healthy Backlog – no action needed
High Backlog – Pull levers to increase capacity or move work out of area
The supply chain organization understands plant capacity and will move work between facilities to
balance the demand and meet customer requirements
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• OTD to Customer Request Date – measures the true need of the customer. − Brought key customers to Belden to develop and refine the
measurement through Kaizen events
Measuring On Time Delivery (OTD)
25%30%35%40%45%50%55%60%65%70%75%80%85%90%95%
OTD % to Customer Request Date
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Achieve 95% OTD for Top 10 Customers
• Belden receives month scorecards from our top 10 customers on how they score our monthly delivery performance
• Monthly review meetings are held with customers where we did not achieve 95% to review root cause and discuss improvement initiatives
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Governmental Regulation On Logistics Industry
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Compliance * Safety * Accountability (CSA) • The Federal Motor Carrier Safety Administration (FMCSA) initiative to
improve large truck safety, and ultimately reduce crashes, injuries and fatalities that are related to commercial motor vehicles
Three major components to monitor commercial carriers:
1. Measurement • Safety Measurement System (SMS) collects data through road side & crash
inspections on 7 categories of information called the BASICs 2. Evaluation
• Identifying which carriers require intervention through a policy driven process • Determining which carriers should be deemed “unfit” using a regulatory process
called Safety Fitness Determination (SFD) 3. Intervention:
• Warning letters, targeted road side inspections, on & off site investigations • Creation of safety plans, issuing violations and/or claims, Out of Service Orders
Transportation Regulations
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Hours of Service (HOS) Rules • Regulations published by the FMCSA for operators of commercial
vehicles governing the number of hours they may work
Overview: • Driver is allowed 14 hours “on duty” working within a 24 hour period • May drive a maximum of 11 hours within that period • Must have a minimum of 10 hours “off duty” within that period • May only work 60 hours within a 7 day period • Must have a minimum of 34 consecutive hours of off duty time between
work weeks in order to “restart” their log
Transportation Regulations
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DOT – EPA fuel, greenhouse-gas standards • In June 2015, a 2nd round of standards was proposed by the
Obama Administration in follow up to its’ 2011 initiatives − Goal to have it signed in 2016 and effective in 2018
• Over the lifetime of the vehicles sold under the program, the EPA
notes these new standards will: − Lower CO2 emissions by about 1 billion metric tons − Cut fuel costs by about $170B − Reduce oil consumption by up to 1.8B barrels
• Environmental Defense Fund (EDF) estimates the new standards
will spawn the development of higher-efficiency tractor-trailers that will get 9.5 MPG. (2010 average was 5.8 MPG)
Transportation Regulations
© 2013 Belden
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