Competitive Advantage from Production and Supply Chain Excellence Satyendra Dubey, Honeywell
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1 2015 Honeywell Users Group Europe, Middle East and Africa Competitive Advantage from Production and Supply Chain Excellence Satyendra Dubey, Honeywell
2 Supplier processes Supplier processes SCOR model as basis of Excellence Source SCOR Model Supply Chain Plan Source Make Deliver Make Deliver Customer processes Supply Chain Operations Reference model Process framework Customer processes Standard processes Standard metrics Standard practices Created by SCC Since 1996 Over 800 companies 40% owner operators Return Return Process, arrow indicates material flow direction Process, no material flow Information flow Industry recognized model driving production and supply chain excellence Honeywell International All Rights Reserved
3 Internal Customer Performance drives competitive advantage Performance Attribute Reliability Responsiveness Agility Cost Assets Area of competitive advantage Consistently getting the orders right, product meets quality requirements The consistent speed of providing products/services to customers The ability to respond to changes in the market (external influences) The cost associated with managing and operating the supply chain The effectiveness in managing the supply chain s assets in support of fulfillment SCOR model drives performance of key attributes > sustainable competitive advantage Honeywell International All Rights Reserved
4 Supplier processes Mapping SCOR to Process Industry Inbound logistics Production Outbound logistics SCOR Model Plan Source Make Deliver Customer processes Source Make Deliver Return Return Honeywell International All Rights Reserved
5 Supply Demand Mapping SCOR to Process Industry Inbound logistics Production Outbound logistics Integrated Planning Production Planning Distribution Planning Scheduling Supply & Demand Balance Inbound Logistics Management Production Accounting & Management Outbound Logistics Management Downtime Management Honeywell International All Rights Reserved
6 Comprehensive Footprint Covered in detail Supply chain baseline assessment SCPM Master Planning Integration Services Model audit and assurance services Integrated Planning Production Planning 1 Distribution Planning Plan Vs Actual 3 Scheduling 2 Supply & Demand Balance Production Accounting & Reconciliation Production Form Mine Logistics Manager Plant Manager 4 Port & Marine Manager 5 Downtime Management Comprehensive, scalable and integrated suite of services, products and solutions Honeywell International All Rights Reserved
7 Integrated Planning Optimize across supply, production, sales & distribution Supply Production Sales & Distribution Use Refinery and Petrochemical Modeling System (RPMS) multi plant for Maximize netback or minimize cost Demand & production constraints not considered Maximize production margins and throughputs of individual plants in silo Logistic costs or demand not considered Synergy between plants not considered Maximize sales, minimize logistics cost Marginal production costs not considered Enterprise level production and distribution planning (Budgeting, Quarterly, Monthly) Feedstock evaluation and selection (Term and spot contracts), exchange agreements Investment analysis (new production or distribution infrastructure) and strategic decisions Performance Attribute Optimize across silos Benefit Multi site organizations can increase their margins by more than 300 basis points by deploying integrated planning process that optimizes the entire supply chain for the enterprise. SCPM Responsiveness: Reduction in planning cycle times SCPM Agility: Capture opportunity trades SCPM Cost: Reduce feedstock and production costs SCPM Assets: Increased revenue from profit mix optimization, new investment optimization & debottlenecking Honeywell International All Rights Reserved
8 RPMS 510: Release 30 th Oct Honeywell International All Rights Reserved
9 Supply & Demand Balance Sales, inventory and operations planning and coordination across supply chain Accounting systems, actual data Forecast positions Day 1 Day 2 Day 3... Supply Manual Inputs Inventory Planning & Scheduling systems Dispatch Profit/day Use Capacity Distribution Planner (CDP) for Integrated sales, inventory and operations planning for complex supply chains Inventory forecasts and control for planning horizon Collecting actual data and plan vs actual Make plans by balancing supply and demand for simpler supply chains Performance Attribute SCPM Reliability: Reduction in demurrages & stock outs Current Plan Revise Review SCPM Responsiveness: Reduction in fulfillment cycle times & replenishments Approve SCPM Agility: Capture opportunity trades, Integrated reporting Plan visualization Benefit Ideally suited for bulk supply chains where inventory management is key and demurrage can be significant SCPM Assets: Increased utilization of supply chain assets Honeywell International All Rights Reserved
10 CDP 230: released 19 th Oct 2015 Customer Support Staff Commercial Staff Business Data Collaborative Environment Customers Planning Staff CDP Maintenance Staff Field Data Shareholders & Stakeholders Key Enhancements: Enable a multi-level approval workflow; Enable plan revisions consolidation which brings performance improvements; Enable Gantt chart view provider for Data Objects; Enable localization on Data Objects, and Honeywell International All Rights Reserved Platform upgrades (PCC250, Infragistics V15.1, SQL Server 2012, Windows Server 2012 R2, Office 2013)
11 Production Accounting and Reconciliation Accurate production data that helps business take better economic decisions with reduced uncertainty Planning Systems Scheduling Systems Feeds Simulation Systems Intermediates ERP Products Enterprise Dashboard Reconciled Production/consumption & Inventory position by product Use PAR for Complex wide or Unit Specific material balances in mass or volume units Multi Component balances for Mineral processing industries Inventory calculation using built in VCF calculations as per API standards Supports AMIRA P754 metal accounting guidelines Receipts Measured, Interfaced or Manually Entered Inventory Mass/Volume Process Unit Process Unit Process Unit Shipments Measured, Interfaced or Manually Entered Inventory Mass/Volume Losses, Missing Movements, Meter Maintenance Benefit Increased reconciliation accuracy which leads to reduction in losses up to 1% and improves decision making capability which helps deliver a margin improvement of up to 5% Integrated graphical workflow environment and best in class reconciliation solver helps close balances up to 20% faster and reduces learning time by up to 20% for new engineers ensuring sustained delivery of benefits Performance Attribute SCPM Reliability: Reduction in shipment and invoicing errors, increased planning model accuracy SCPM Responsiveness: Reduction in accounting cycle time SCPM Costs: Reduction in Fuel and Loss Honeywell International All Rights Reserved
12 PAR 200: Released June 2015 Modular Accounting Models Flexible Data Collection Methods Intuitive visual aids and metrics for faster analysis Multiple Mechanisms to view Information Dashboard Historian Configure Production Model Graphically create accounting model Bulk Configure Models Model Versioning Model Tuning Easier to Build, Learn & Maintain Collect Production Data Automatic collection from Historian / Movement Systems Manual Movement entry Import movements from Excel Secure & Seamless Data Collection Perform Initial Analysis Graphically highlight balance issues View Production Metrics Perform Simple balances Perform Statistical Reconciliation Range Constraints Loss Modelling Solver Diagnostics Missing Movements solver Faster identification of Key Errors Collaborate Notifications & Approval workflow Data Auditing Standard/Custom Reports Excel Analytics Historian Writeback Reliable, Fast & Extensive Information Availability Honeywell International All Rights Reserved
13 Base Lining Services Baseline and improve supply chain and production management practices and models 1 Interviews 2 Mapping as-is process 3 Rich technology and domain experience enables Honeywell to provide tailored consulting based on customer needs 6 Develop roadmap based on baseline score, gaps and complexity Standard way of scoring, Baseline of as-is 4 5 Detailed gap assessment Supply chain complexity Use Honeywell SC&PM services for Baseline current supply chain and production management processes against the industry best practices Developing improvement roadmap to achieve best in class status Model review and audits of supply chain and production management models Supply chain baseline Best in class roadmap Based on SCOR model applied to process industry Honeywell best practice repository Standardized questionnaire & scoring Roadmap to address gaps based on unique supply chain characteristics and complexity. Highlights low hanging fruits such as process enhancements, training and review metrics. Also highlights needs for small and large project based improvements Recommends phased approach that pays for itself Model audit and assurance LP and accounting model reviews Set up assurance and back casting processes Honeywell International All Rights Reserved
14 Integration Services Orchestrate different functions to maximize opportunity capture using Honeywell s standard integration framework LP and accounting model reviews Set up assurance and back casting processes Honeywell International All Rights Reserved
15 Vertical Solutions Typical Benefits Performance Attribute Area of competitive advantage Reliability Responsiveness Agility Cost Reduction in re blends (15 to 45 cents per barrel of product), Increase in on time delivery, Reduction in demurrages (10%), Reduction in shipment errors Reduction in cycle times (Planning, Accounting processes etc.) up to 20%, Order fulfillment cycle time Increase in proportion of spot trades, Minimize impact of unplanned events (e.g. vessel late arrival, customer shutdown, production slowdown), Reduction in tank top or tank bottom Reduction in feedstock cost, Reduction in Fuel and Loss (0.1 to 0.3%), Identification of downtime events and support proactive maintenance, Productivity of SCPM personnel, Inventory carrying costs Assets Increased revenue from product mix optimization, New investment optimization, Debottlenecking Honeywell International All Rights Reserved
16 SC&PM Customers Customers Served By Industry By Geography Petrochemicals MMM Refining 31+ sites 70+ sites 70+ sites 50+ sites Americas 50+ sites EMEA 100+ sites APAC O&G Consulting 12 sites 10 sites Sample Customers Honeywell International All Rights Reserved On each Customer site, more than one product
17 Contact Honeywell for SCPM Base Lining & Master Planning Honeywell International All Rights Reserved
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