Download IDSP and DSP Overview for Castrol

Improving Enterprise Profitability
through Optimized Supply Chains
Lou Ann Liebman
Project General Manager,
Demand Supply Planning
December 2001
Topics
• Overview of BP Chemicals DSP Efforts
– Scope
– Benefits
• Lessons Learned to Date
– Identifying the Value and Selling the Project
– Choosing the Technology and Partners
– A Successful Implementation
– Sustaining the Benefits
• Summary
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December, 2001
BP Chemicals Demand Supply Planning (DSP)
DSP Wave 1
BP Group
Chemicals
China O&P
O&P Asia
European JV
Global O&P Business Dev
Asia
S&IC
PX/PTA
Polymers
Feedstocks
Europe
Performance Chemicals
OS&D
Nitriles
PX/PTA/PDDG
Polymers
Feedstocks
America
Downstream
Acetyls
Upstream
Aromatics/PTA
DSP Wave 2
• Bulk commodities, intermediates, and specialty chemicals
• Single-site, regional, and global businesses
• Internal, Downstream, Upstream, and external integration
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December, 2001
BP Chemicals DSP Functionality
Procurement
Production
Planning
Materials
Planning
Global
Planning
Customer Order
Management
Wedge
Planning
Demand
Management
Offer
Allocation
Policies
Scheduling
Distribution
Planning
Inventory
Management
Manufacturing
Automation
VMI
Planning
Finance
Collaborative
Forecasting
ATP
Logistics
Optimization
EXTENDED
BASIC
Related Project
FUNCTIONALITY
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December, 2001
DSP Phased Approach To Implementation
• Rapidly provide quick-win benefits
• Promote standardization across the businesses
• Provide common infrastructure for linking to other areas (ERP, Mfg, etc.)
• Reduce cost of delivery and maintenance
• Improve sustainability of processes
• Leverage lessons learned
TODAY
Few Businesses
Implement Advanced Features
for Selected Businesses
DSP
W2
Sophistication
DSP
W3
Add More Robust Functionality
Based on
Business-Specific Requirements
Complete Implementation
With Remaining Businesses
Most Businesses
All Businesses
Leveraging of Single ERP Platform
Standardization of
Core DSP Processes
DSP
W1
Initial Implementation
With Select Businesses
Time horizon
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December, 2001
BP Chemicals DSP Costs
Technology:
Partners:
Aspen Supply Chain Suite (MIMI)
TECHNOLOGY
• Aspen Technology
• Supply Chain Consultants
PROCESS
• Accenture
• CGEY
• SkillSet
IT
• PWC
• DMR
• Logica
IT
Misc
Licenses
BP Resources
Costs:
Process
Consultants
$0.5-$2.0m/business
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Implementation
Services
December, 2001
BP Chemicals DSP Project Justification
Benefits:
– Inventory Reductions (Raw Materials, WIP, Finished Goods)
– Manufacturing Costs (materials, conversion, cross-plant optimization)
– Increased Revenues (demand management, customer differentiation,
prime production)
– Transportation and Distribution Costs (sourcing, dist. planning)
– SG&A (efficiency, headcount reductions)
– Swaps/Exchanges
Distribution Costs
Payback:
Less Than
One Year
Swaps/Exchanges
Inventory
SG&A
Revenue
Mfg Costs
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December, 2001
Lessons Learned: Identifying the Value and Selling the Project
Identifying the Value:
• Assess value -- and verify with stakeholders.
• Use combination of top-down and bottom-up assessments.
• Challenge with “best-in-class” perspective.
• Determine how success will be measured.
Selling the Project:
• High-level sponsorship is important,…
• Identify a sponsor who believes in the end goal.
• Ensure commitment to resources -- $$ and people.
• … But business/site buy-in is critical.
• Identify and use champions.
• Get end-users involved as early as possible.
• Address alignment and interfaces with other initiatives. Set priorities.
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December, 2001
Lessons Learned: Choosing the Technology and the Partners
Selecting the Technology:
• Don’t underestimate technical issues.
• Quiz vendors hard on technology capabilities. See demos. Talk to references.
• Expect to encounter need for some developmental work.
• Choose a technology that has been applied in your industry,
and a vendor that has knowledge in particular areas where
you expect to see high value.
• “Has this been done in the field with multiple, paying, petrochemical
customers?”
Selecting the Technical Partners:
• Quantity and Quality of resources is critical. Interview key consultants for
technical, people, and project management skills.
• Reserve the right to replace ineffective resources.
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December, 2001
Lessons Learned: Choosing the Technology and the Partners
Selecting Other Partners:
Consider 3rd party assistance for process design work
and change management.
• Recognize process issues will be at least as important as tool
development.
• Don’t implement a faster way to get the same, wrong answer.
• Automating business rules means first having to agree to them.
• Change management must also be addressed.
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Stakeholder Identification
Change Readiness Assessments
Organization impacts (roles & responsibilities, organizational design changes)
Risk Assessments
Communication Plans
Training Plans
Metrics
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December, 2001
Lessons Learned: A Successful Implementation
Securing Internal Resources:
• Business/site leads should optimally:
• Have broad understanding of business/site across most of the supply chain
field
• Have detailed knowledge in area where high value is expected
• Have project management experience
• Be empowered to make decisions
• Be able to gather additional business/site input as needed
• Communicate well to all areas/levels of the business/site
• Lead resources should be 100%. Part-time resources (such
as key end-users) should be at least 25% to be effective.
• Commit internal resources for life of project.
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December, 2001
Lessons Learned: A Successful Implementation
Determining Project Approach:
• Schedule-driven or value-driven
• Degree of standardization desired
• One “central” project or a set of individual ones
– Benefits come through delivery and use of the individual projects, but
implementation and support will be more effective and economical if
standardization and leveraging is used.
– Central roles should facilitate the individual projects.
– Business/site resources need to recognize the benefits of standardizing
wherever possible and leveraging learnings across projects.
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December, 2001
Lessons Learned: A Successful Implementation
Following Good Project Management Basics:
• Start addressing data issues yesterday.
• Address roles and organization issues early.
• Define scope thoroughly up front.
• Review schedule. If it sounds too aggressive, it probably is.
• Put deliverables on individuals’ objectives and business/site scorecards.
• Focus on delivery of high-value pieces first. Get some quick wins.
• Have a project plan and use it routinely to track progress.
• Identify robust leading indicators of project success/failure.
• Replace ineffective resources quickly.
• Expect challenges and technical hurdles. Manage expectations.
• Communicate!
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December, 2001
Lessons Learned: Sustaining the Benefits
Sustaining the Benefits:
• Provide for on-going support and enhancements.
• Ensure all processes have owners.
• Recognize processes are “living.”
• Measure and report benefits.
• Reward champions.
• Publicize successes. Share learnings.
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December, 2001
BP Chemicals DSP Summary
• Understand the potential reward, and set a vision
to achieve it.
• Cultivate internal ownership.
• Expect to make some mistakes, but learn a lot.
• Celebrate success!
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December, 2001