Alcatel lucent planning optimization proposal presentation

Copyright © 2011 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
Accenture Proposal on
ASB Supply Chain Planning Optimization
(Version: 0725)
July 2011
1

Preface – The Context
2
• Accenture is very pleased to have this opportunity to present our observation to the
Supply Chain Planning issue and provide optimization recommendation based on strong
NEP industrial experiences.
• Through the multiple years’ engagement with ASB in critical business solution and the
investigation on ASB’s Supply Chain area (such as ‘high inventory’ issue, FP optimization)
since last November, we deeply understood the key operational issues and respective
impacts to the business outcomes that ASB is facing.
• A systematic Optimization Solution including IT (FP) enhancement and new centralized
planning model is proposed to help ASB overcome the short-term operational issues and
establish ASB own long term efficient and reliable planning capability.
• We believe that the such a planning optimization is an achievable goal under the strong
commitment of entire ASB leadership team and outstanding execution ability of joint
team between ASB and Accenture.
Copyright © 2011 Accenture All Rights Reserved.

Table of Contents
 Key Findings
 Solution Highlight
 Delivery Approach
 Appendix
3

Integrated Supply Chain Planning Framework
4Copyright © 2011 Accenture All Rights Reserved.
Customer
Telecom
Enterprise
Regional
Warehouse
ASB Supplier
EE parts
Suppliers
Mech. Parts Suppliers
VMI (Module
Components)
CustomerPortal
SupplierPortal
• Proc Plan
• Committed
Proc Plan
Demand Planning
(Forecast
Management)
Long Term
Planning
Strategic
Procurement
Capacity and
Material
Planning
Sales and
Operation
Planning
• Sales Order
(with CRD)
• Consolidated
FCST
• Annual Plan
• Consensus FCST
• Annual Plan
• Inventory
• Consensus FCST
• Sales Order (with desired ETD)
• B/S Supply Plan
• Proc Plan for Cell
• Inventory and Transaction
(Raw Material/WIP/FG)
• Capacity Profile
• Sales Order
(with ETD)
• Sales Order
(with ETD)
• Hub/VMI
Inventory
• Committed
Proc Plan for
Module
Components
Order
Management
ERP
(Transaction data: Inv, PO, SO, WO)
• Planned
Order
• Sales-Out
• Sales Order (Sell-In)
• W/H Inv
• Proc Plan
• Committed Proc Plan
• Committed Strategic
Proc. Plan
• Sales Order
• Inventory
• Committed Proc
Plan for
Key/Critical Parts
• Sales-Out
• Sales Order (Sell-In)
• W/H Inv
• Consensus
FCST/AATP
• Annual Plan
• Strategic Proc. Plan
• ATP
Confirmation
• ATP
• Strategic
Proc. Plan• Strategic
Proc. Plan
• Consensus
FCST
• Sales
Order
• Inventory
• Sales Order (with
desired ETD)
• PO
Master
Planning
• S&OP Plan
• Master
Production
Schedule
• Supply Plan to
Suppliers
Product
Development
Corporate Strategy
Account
Management
Opportunity
Management
• Account Profile/Plan
• Collected
Opportunities
• Opportunity
volume with win
rate
• Market Trend
• Tech. Roadmap
• Competitor Info.
Fulfillment
(ATP)
• Sales Order
(with CRD)
• Picku
p Date
The Accenture Integrated Supply Chain Planning Framework is adopted to assess ASB’s
Supply Chain Planning, focusing on IT System Support, Operating model, Data and People.

Observation on the Key Issues (1/2)
5
There are several key issues identified and categorized based on the framework:
A. Lack of E2E supply chain planning and control mechanism
B. Complex planning logic and insufficient analytical functionality
C. Planning staff's skills are insufficient
D. Low data quality and weak data governance
* The detailed issue list is provided on the next page.

Observation on the Key Issue (2/2)
6
A. Lack of E2E supply
chain planning and
control mechanism
• Inefficient
Planning Control
• Low Delivery
Performance
• High Inventory
A1 - Planner lack of visibility of production execution progress
A2 - Overlapped work tasks between Supply Planner and MFG
C2 Trusting manual planning book rather than APS output
D. Low data quality and
weak data governance
D1 Aging master data and transactional data result in wrong planning
outputs
B. Complex planning
logic and insufficient
analytical functionality
A4 - Compared with short supply lead time, lower purchase price is
more preferred
A5 - Production plan was not executed due to lack of demand priority
and capacity
C. Planning staff's skills
are insufficent
B2 - Planning output has cross-feeding issue
B3 - Low performance and unpredictable system simulation results
C1 Insufficient knowledge to identify issue and trace back
A3 - MOQ (Minimal Order Qty) is not optimized for demand
D2 Lack of management process for data maintenance
B1 - RSP driven purchasing plan causes extra material inflow
B4 - Less accuracy and Issue-tracing function in Inventory Outlook tool
Root Causes List of IssuesOperation Impact
?

Lack of E2E supply chain planning
and control mechanism
Low data quality and weak data
governance
Complex planning logic and
insufficient analytical
functionality
Planning staff's skills are
insufficient
Improvement Opportunities
Build Up Data Validation Mechanism
Systematic Planner’s Training Plan
Recruit experienced planning staff and
Strengthen Training Execution
Analytical Tools to support Planning and Execution
Monitoring
Planning Logic Optimization for RSP, Capacity Plan
Empowered (Planning) Team with required broader
responsibilities for centrally planning and control
Daily System Operation Discipline and Audit
Factory Planning System Assessment and
Simplification
Identified Improvement Opportunity
Root Causes
H
H
H
H
H
M
H
H
Executed by Joint Team Executed By ASBLegend
Considering the execution sequence of the improvement opportunities and the executor
of each opportunity, the opportunities are grouped as ‘High’ and ‘Medium’ Priority.

Table of Contents
 Key Findings
 Appendix
8

Solution Map for Supply Chain Planning Optimization
Biz
Requirements
are firmed

From ToRSP drives Purchasing Plan ASP drives Purchasing Plan
Optimize Planning Logics
– ASP drives Material Planning and Purchasing Execution (1/2)
Benefits of having Purchasing Plan based on ASP include
1) Better synchronized material purchasing with semi-FG /FG production
2) Reduced risk for high inventory of material due to delay or shortage of some material (To-be-Reserved/To-be-
Available)
Corresponding change will be needed in the planning calendar: Procurement planning
will be based on the ASP from DSB meeting.

Leading Practice
S&OP team Factories Sales Procurement
– ASP drives Material Planning and Purchasing Execution (2/2)

Cross-Feeds issues in FP were caused mainly by the conflict between priority and due date of
demand orders. FP default function only can mitigate the conflict, unless by simplifying the
priority or assigning material by due date only.
– Material Supply Logic Assessment: Cross-Feeds Issues

Planning Function Enhancement
- Capacity Planning: A Complete FP Planning Cycle
2. Infinite Capacity, Finite
Material Plan
3. Material Resolution:
− add/delete receipts
− expedite material arrival
4. Finite Capacity Balancing:
− automated algorithms
− manual procedures:
schedule over time,
offload to alternates
move work in time
6. Save Finite Material &
Capacity Plan
5. Finite Scheduling
− Automated algorithms
− manual scheduling
1. Data Download
7. Preserve Plan and Upload
Data
Planner Solve
Planning Issues
SAP
A complete planning cycle includes finite material plan and capacity balancing. The most important is
for Planner to Solve the Planning Issues in each stage with sufficient planning knowledge and familiarity
with FP planning logic and UI.

Key work center planning method compares requirements to the available capacity at key work centers.
It attempts to balance workloads broadly. In ASB, Accenture suggests that ASB only considers the
constraints of critical equipment1.
Work Center 1 Work Center 2 Work Center 3 Work Center N…
Routing Model
for Detailed
Capacity Model
Constraint of Critical Equipment
Routing Model
for Key Work
Center
1. One of the definition of critical equipment could be the capacity difficult to increase in 1-2 month.
Model Pros Cons
Key Work
Center
1. Provide a feasible plan with capacity constraint
2. Balance workloads broadly and prepare material in
consumption level
3. Maintain routing data with limited efforts
4. Easy to understand the planning results
1. Didn’t consider over all work centers’
situation in factory
FP Capacity
Model
1. Capacity plan is detail to each work center
2. Arrange over time by each work center
1. Huge efforts to maintain planning
parameter for each work center
2. Difficult to explain planning result s
Planning Function Enhancement
- Capacity Planning: Using Key Work Center Instead of FP Detailed
Capacity Model

To Solve the Data Quality Issue, ASB need to reinforce Business Discipline and Set up Data
Validation Mechanism including Process and Cross Function Team. Project team will
identify Data Owners, Data Validation Process for planning related data objects .
15
Business Data Generation/Updates
Business Discipline
Data Validation Process
Master data:
• Purchase lead time,
• Production lead time
Transactional data
• Purchase order,
• Sales order,
• Production order
Data Quality and Competence Enhancement
- Data Validation Process

A holistic user training Plan will be tailored and
applied with focus on Planning team experience
and skill, especially the system related skills and
Planning Issue troubleshooting skills.
Time
Skills
DegreeofSpecifictrainingcontent
Planning
Introduction
Process
System
Basic Supply Chain, planning
knowledge training
 Process level training
specific to a planning
function or planning
cycle
Complex Scenario based
training,/workshop,
Leading Practice and soft
skill trainings.
Tier 1 Tier 2 Tier 4
Concept focus Issue Solving FocusProcess focus
Main Responsibilities:
- Create and evolve planning models
- Analyse root cause for SC
performance issues
Required skills:
- Statistics
- Planning
- Data analysis
- Coordination
Planning
Illustration
Advanced
Training/Workshop
 Transactional training of
system, including master
data setup, system
calculation logic, data
analysis and operation
System focus
Tier 3
Data Quality and Competence Enhancement
- Training Plan for Planners

Solution Map for Supply Chain Planning Optimization
Preliminary
Thoughts Based
on Best
Practice and
ASB’s Issue

chain planning and
control mechanism
• Inefficient
Planning Control
• Low Delivery
Performance
• High Inventory
C2 Trust manual planning book rather than APS output
D1 Aging master data and transactional data result in wrong planning
outputs.
B. Complex planning
A4 - Compared with short supply lead time, Lower purchase price
is more preferred
A5 - Production plan was not executed due to lack of demand priority
and capacity
are insufficient
A3 - MOQ (Minimal Order Qty) is not optimized for demand
D2 Lack of Management Process for Data Maintenance
B1 - RSP driven Purchasing plan cause extra material inflow
B4 - Less Accuracy and Issue-tracing function in Inventory Outlook tool
Issue to Address by “Control Tower”
Root Causes The List of IssuesOperation Impact
18

• SPD currently has no control
on Production: Launch Plan
is not followed
• SPD doesn’t have visibility of
Production Order status
Control Tower is introduced to build in the right control on production!
A Reflection of the Issue
- Weak Interlock between Supply Planning and Production

20
Establish a “Control Tower”
- Framework
20
Focus on Production Execution based on certain SLA (e.g.,
production lead-time vs. actual load)
 Accept/commit MOs according to agreed production lead-time
Conduct detailed production scheduling to fulfill MOs as
committed, considering priority set by Control Tower
• Convert PR into PO, approve
the PO and place to supplier
ASAP
• Monitor PO status and push
for delivery on time
Aimed to deliver
the goods when
it is needed (to
reduce inventory)
and faster
Centrally coordinate supply planning and execution processes for all products, mainly by…
• Having accurate and real time visibility for supply chain data/information
• Driving for one feasible supply plan via effective DSB, with both material/capacity availability
• Coordinating purchasing and production to realize the supply plan and managing inventory
20

Coordination Mechanism to strengthen Interlock, which is enabled by…
• Process steps and communication structure
• Key Check Point, regular/event-driven review and decision-making cycle
• R&R, KPIs, Regulation and escalation rule
• Visibility of info and analytics required (e.g., capacity availability and load status)
- Coordination Mechanism
21
Illustration

Deliverables for Process/Business Rule related to
“Control Tower” will consist of follows:
• Process Overview/Walk through (detail
activity/timing/business rule)
• Process Swimlane and Activity Description
Process Swimlane and Activity Description
Key Activities, Inputs/Outputs of “Control Tower”
Process Overview/Walk through
Illustration
Illustration
Key Activities:
• Generate one supply plan, aligned across BDs (DP/SPD/MML/IPL) and
modify the plan based on the latest supply/demand picture
• Coordinate Material Purchasing and Semi-FG/FG Manufacturing activities
by controlling POs/MOs, and monitor status of PO/MO/Inventory, and
make adjustment
• Organize regular meeting to review Inventory , demand vs. supply
situation and delivery performance, and define/execute improvement
actions
Inputs
• Supply: Stock of raw material and Semi-FG, PO status and WIP of Semi-
FG/FG, capacity
• Demand: SOs, Demand Forecast, other indication regarding customer
demand/ordering behavior, buffer stock target, customer change request
Outputs
• Supply plan, Material Requirement Plan, Call-off (POs/MOs), modification
to POs/MOs/Supply Plan, improvement actions regarding excess/aging
stock
Leading Practice
- Process & Business Rule

A KPI “Tree” will be developed as below illustration to ensure that Performance
expectations be in sync, and related functions (i.e. SPD, IPL Manufacturing, MML) share
accountability to meet those goals.
• Collection of KPI as-is definitions incl. calculation
Logics, reference period, legacy system, data
availability
• Review as-is KPIs and define to-be KPIs in a form
of KPI tree, either by reassigning as-is, or
introducing new ones. Description of KPI to-be
definitions incl. calculation logics, reference
period, and setup the KPI Tree → First draft
• Discussion and review of to-be definitions with
business responsible persons → Second draft
• Verification of discrepancies and review with
responsible persons and experts in the business
areas
Illustration
Approach Key Deliverables
• KPIs
– DR/DP/CLIP/RLIP
– Order Lead-time
– Production Throughput Time
– Production adherence to Schedule
– Inventory Turnover/Stock Reach
– Aging Stock/Blocked Stock
• KPI “Tree”
• KPI calculation logic
Illustration
Start
POD
available ?
Yes
No
No
Within
Delivery
window ?
PGI + ETZ =
KTU
Pull in from
KTU ?
0 %
100 %
Yes
LTE2=1
LTE3=0
Within
Delivery
window ?
Yes
LTE2=1
LTE3=0
Pull in from
KTU ?
Yes
LTE2=0
LTE3=1
Is
PGI >=WT
?
NoNo
0 %
End
No
POD = KTU
?
100 %
Yes
LTE2=1
LTE3=0
Yes
LTE2=1
LTE3=0
End
End
Within
Delivery
Window ?
Yes
LTE2=0
LTE3=1
Incoterms =
DDU/DDP ?
No
Yes
PGI = ATU
?
Yes
LTE2=1
LTE3=0
No
No
No
LTE2=0
LTE3=0
No
LTE2=0
LTE3=0
Credit Limit
Released
Date Check
Yes
No
Within
Delivery
window ?
Yes
LTE2=1
LTE3=0
No
Is
PGI >= WT
?
Yes
LTE2=0
LTE3=1
Yes
No
Illustration
- KPIs

Based on the business process solution design, IT requirements can be defined,
which may include the following aspects:
• Real time access to information needed for “Control Tower” to fulfill the coordination
responsibility (SAP R3/APS-FP)
– PO/MO status, and delay report
– Material shortage list
–Inventory status and outlook
– Purchasing Lead-time and Manufacturing Lead-time
• Timely analytical report or dashboard which may provide…
– Insight about supply planning and execution key performance
– Monitor mechanism with alert functionality, e.g., report indicating where there is or
would have an issue if nothing be done
Below deliverable will be carried out after the IT functional requirements are
defined:
• To-be IT requirement list
• Fit & Gap analysis versus As-is IT capability
• Business Requirement for IT system
- IT Requirement Analysis

C2 Trust manual planning book rather than APS output
D1 Aging master data and transactional data result in wrong planning outputs.
A4 - Compared with short supply lead time, Lower purchase price is more preferred
A5 - Production plan was not executed due to lack of demand priority and capacity
A3 - MOQ (minimal order qty) is not optimized for demand
D2 Lack of Management Process for Data Maintenance
B1 - RSP driven Purchasing plan cause extra material inflow
B4 - Less Accuracy and Issue-tracing function in Inventory Outlook tool
chain planning and
control mechanism
B. Complex planning
are inadequate
Solution Coverage Summary
Y
Y
Y
P
P
Y
Y
P
P
P
Y
Y
Y
Y N PFully Covered Not covered Partially covered
25

Table of Contents
 Key Findings
 Appendix
26

Tailored Work Approach
27
Phase I Phase II
By considering the principle of ‘quick launch’ and dependency with overall operation direction,
Accenture suggests a steady working approach to achieve the phased objectives:
• Phase I, completed within 15 weeks, mainly focusing on FP enhancement and the ‘One Control Tower’ Design
• Phase II, following Phase I, mainly focusing on the deployment of the ‘Control Tower’ to the operational
environment. The deployment could be in multiple waves, starting from 2 Product Lines, e.g. Optics, Wireline.

28
The Accenture Management Consulting Difference
For any inquiries or comments on this proposal, Please contact Zhenkai.Tang@accenture.com.
Thank you!

Table of Contents
 Key Findings
 Appendix
29

Accenture China Introduction (1/3)
Overview
Beijing
Shanghai
Taipei
Hong Kong
Dalian
Guangzhou
Chengdu
• Accenture has been a key player in the
Greater China market for 20 years.
• We have about 5,000 professionals working
in offices in 7 cities.
• We provide full range of services –
Consulting, Technology and Outsourcing.
• Our business is growing at CAGR ~30% since
beginning of 2000.
• We serve clients across all our industry
segments in and from China.
• Our CEO is the sponsor of our business and
is personally and actively involved.

Operating Model
Financial
Services
Health &
Public Service
Products ResourcesCommunications
& High Tech
Strategy
Customer Relationship Management
Finance & Performance Management
Supply Chain Management
Process & Innovation Performance
Marketing Science
Talent & Organization Performance
Change Management
Risk Management
Service Management
Sustainability
Service Oriented Architecture
Network Technology
Data Center Technology & Operations
Portals and Content Management
Security Solutions
Software as a Service (SAAS)
Application Renewal
Enterprise Architecture
Information Management
Infrastructure Solutions
IT Strategy and Transformation
Microsoft/SAP/Oracle Solutions
Performance Engineering
Business Process Outsourcing
Application Outsourcing
Technology Infrastructure Outsourcing
Management
consulting
Technology
Outsourcing
We conduct business through five industry-focused operating groups. Our three
growth platforms underpin emphasis on high-performance business.

Key Facts of C&HT China / APAC
• Partnering with ASB since 2006 and proven in delivering the promise on time with
high quality.
- Delivery Excellence based in China serving on a global scale.
- “A dedicated global network” providing a unique Business & IS integrated skills set, and
consistent delivery quality and competitive cost.
- Deep Understanding of Alcatel-Lucent core business critical application.
• Selected C&HT Clients
– Over 50% of our current clients have been clients for the past 3 years;
– All of the telecom operators in China are clients of Accenture. Some are also ALU’s clients in
China and APAC.

Backup Slides

Supply Chain Planning Building Blocks and System Mapping
Firewall
Supply Chain Planning
Quotes
and Orders
PP & MRP
MES
EMS
PP & MRP
MES
PP & MRP
MES
Requests
Promises
Production
Plan
Prioritized
Demand
Enterprise:
Allocation Rules
Business Objectives
Modeling
What-If Scenarios
Individual Site:
Business Objectives
Parameters
Constraints
Demand
Planning
Demand
CollaborationCustomer
Enterprise
Planning
Site Planning
Requested
Forecast
Requested
Order
Committed
Forecast
ATP/AATP
Quantity
Demand
Fulfillment ERP
eSupply
A specify planning system only covers part of function(s) in supply planning. Most of time Kinaxis RR
will play the role in the Enterprise Planning Level where is similar with i2-MP.

Firewall
Quotes
and Orders
PP & MRP
MES
EMS
PP & MRP
MES
PP & MRP
MES
Requests
Promises
Production
Plan
Prioritized
Demand
Enterprise:
Allocation Rules
Business Objectives
Modeling
What-If Scenarios
Individual Site:
Business Objectives
Parameters
Constraints
Demand
Planning
Demand
Enterprise
Planning
Site Planning
Requested
Forecast
Requested
Order
Committed
Forecast
ATP/AATP
Quantity
Demand
Fulfillment ERP
eSupply
i2-DM
i2-MP
i2-FP
i2-OP

Firewall
Quotes
and Orders
PP & MRP
MES
EMS
PP & MRP
MES
PP & MRP
MES
Requests
Promises
Production
Plan
Prioritized
Demand
Enterprise:
Allocation Rules
Business Objectives
Modeling
What-If Scenarios
Individual Site:
Business Objectives
Parameters
Constraints
Demand
Planning
Demand
Enterprise
Planning
Site Planning
Requested
Forecast
Requested
Order
Committed
Forecast
ATP/AATP
Quantity
Demand
Fulfillment ERP
eSupply
i2-DM
i2-MP
i2-FP
i2-OP
Kinaxis RR Covers

Control Tower
Production
Material Stock Semi-FG/FG Stock
Inputs to Production
• Production Launch Plan
(Production Orders)
• Priority
• Corrective Actions
Feedback
• Production Capacity
Availability
• Production Order Status
Report
• Delay Report/Recovery
Plan
Measure/Track/
Review/Act
(Escalate if needed)
Coordination Mechanism to strengthen Interlock between Planning and Production,
which is enabled by…
• Detailed process steps and communication structure
• Key Check Point, regular/event-driven review and decision-making cycle
• KPIs, R&R, Regulation and escalation rule
• Visibility of info and analytics required
- Detailed Rule of Coordination Mechanism

- Major Changes
From… To…
Decentralized coordination and weak
interlocks
Centralized coordination and strengthened
interlocks
38

As-is
Supply
Planning
Semi-FG/FG
Manufacturing
Material
Purchasing
Weak Interlock:
• Production launch Plan not
followed due to…
– No enough production
capacity
– Missing materials
caused by double
counting
– Plan not reflecting real
demand priority
• Production order status in
MES not linked to SAP
Weak Interlock:
• Late in conversion of PR
to PO for missing
vendor quota info.
• Inaccurate material
availability info. in the
system, due to, e.g.,
material double booked
for production orders
• High MOQ vs. actual
usage
• Focus on material availability check,
which is manually done
• Create production launch plan based
on FP run, but w/o
– Doing capacity availability check
– Knowing actual demand priority
• Schedule production according to
real material and capacity
availability
• Consider the actual priority of sales
orders
• Sometimes do their only planning
• Handle POs w/o considering the demand priority
• Convert PR to PO, but not proactively clean up
pending PR
• Record PO status in the system, but no specific
actions improving quality of material availability
info.
39

To-be
Control Tower
Semi-FG/FG
Manufacturing
Material
Purchasing
Strengthened
Interlock:
• Executable Production Launch
Plan (PLP), as already
balanced w/ both material
/capacity availability, as well
as actual demand priority
• Install additional coordination
mechanism to PLP release,
• Control Tower drive for
corrective actions based on
timely feedback of MOs status
Strengthened
Interlock:
Add additional coordination
mechanism to ensure
• Smooth and fast process
from PR, to PO approve/
issue
• Accurate/reliable material
availability info. in the
system
• Timely actions on delayed
material and cancel/pull-in/
push-out request
Centrally coordinate supply planning and execution over E2E processes for
all IPL products
• Driving for one aligned and feasible supply plan via effective DSB meeting,
considering both material/capacity constraints
• Synchronizing material purchasing and Semi-FG/FG production to realize
the supply plan and manage inventory at each stage, by controlling the
release of PR/MO (based on actual demand priority)
• Accept/commit MOs according to agreed
production lead-time
• Conduct detailed production scheduling
to fulfill MOs as committed, considering
priority set by Control Tower
• Convert PR into PO,
approve the PO and place to
supplier ASAP
• Monitor PO status and push
for delivery on time
40

Credential – Demand Planning Optimization
• A global design and manufacturing partner for the telecommunications and electronics industries based in Finland but acquired by Taiwan-based
Liteon in 2007. Its service offering covers the whole product lifecycle from industrial design to manufacturing and logistics. The client has operation in
12 countries while the 2 manufacturing sites in China (Beijing and Guangzhou) are becoming the biggest revenue contributor.
• The client strives to win more business share from the critical customer, through increasing the global operation performance. Hence the top
management sets the two major goals, to increase the service performance and to reduce the cost. The implementation of Lean Manufacturing
Program identified an urgent need to standardize & improve the Demand Planning process to further cut DOS (Days of Supply) and at the same time
improve customer service level.
• Following the lean manufacture program, Accenture extended the
engagement to laid out and execute the demand planning
optimization program :
• DP Assessment and key findings analysis
• Unplanned and/or irregular customer demands have a
dramatic effect on the client’s operations and inventory
• An Excel based tool (DP Tool) has been designed and
implemented for demand leveling based on volatile
demand patterns with various strategies
• Encourage mutual benefits across the Supply Chain –
Customer/Supplier Collaboration. Forecast performance
monitoring tool has been implemented to support “fact
based” discussion in the regular collaboration meeting and
KPI / collaboration process defined
• Through this Demand Planning Optimization program, the client has
established sustainable plant Demand Planning competence:
• Established the foundation for “Maximize revenue” through
capacity optimization mechanism
• Enabled capability to level demand and reduced impact of
poor quality demand data on client production and F/G
inventory
• Established regular fact-based communications with
customers to address mutual issues, build trust, and take
corrective and preventative actions
• Improved visibility to the impact of demand change
• Financial benefit to client
• F/G Inventory level of target 3 projects ( contributed 70% of
total MGZ F/G value) decreased 30% in 10 weeks supported by
DP control with strong sales.
Business Situation
How Accenture Helped Key Business Benefits
41

Credential – Supply Planning Optimization
• The client’s as-is supply chain planning is not integrated and is facing various challenges to balance overall demand and supply, keep lowest
inventory cost and support business increase.
• GZ and SH plants get different sales forecast, also SH plant only use SH DC inventory to consume whole country’s forecast.
• Sales forecast is generated manually only at SKU level. No clear safety stock & inventory policy in Beijing & Chengdu DC
• Requirement buffer added not only sales forecast but also production plan
• No distribution plan to trigger the replenishment to DC inventory
Business Challenge
• Demand Management:
• Formalize forecast generation process
• Support Pre-S&OP and S&OP meeting to get consensus
forecast
• Support finance Sales Forecast ($ value) provided to US
• Supply Planning Optimization:
• Generate MPS automatically by using MPS lite tool to
leverage forecast in demand planning initiative
• Leverage MRP Functionality in MISys to automatically
calculate raw material requirement
• Provide data maintenance requirement to end users
• Unify forecast source in GZ and SH plants to avoid excess demand to
operation
• Use simple statistic forecast algorithm plus sales gain & loss input by
forecast tool to align different requirement between sales (national
view) and operation (Location view)
• Plan the transportation replenishment by locations & production
source at one planning action
• Upgrade Material Manager & planner’s role from data calculation to
Exception Management
42

Credential – Inventory Optimization
• A leading consumer electronics product manufacturer. Its costs were not competitively reduced due to lack of sourcing strategies for key direct
materials components; procurement operation effectiveness and efficiency control/monitoring was needed.
• Fragmented supply base and lack of cross-project communications averts buyer power leveraging, sub-optimizing supplier competitive mix and
cost structure.
• Lack of communications between R&D/Project Management and Procurement generates mis-alignment between product requirements and
individual component specifications.
• The value of As-Is inventory level has 50B NTD in total.
Business Challenge
• Accenture is engaged to executed and managed the 7 step strategic
sourcing methodology, integrating Procurement, As-Is Inventory
Analysis and reduction execution, R&D and Project Management, to
develop sourcing strategies for 4 direct material key commodities.
• Developed commodity design guidelines with R&D and Project
Management to identify product differentiation costs and
component usage by specifications
• Identified market intelligence and conducted key spend data
analysis to aggregate buyer power in order to support fact-based
negotiations with suppliers.
• A 10 weeks inventory assessment and quick optimization is
executed.
• Achieved 10%+ in cost savings from baseline costs, discounted by
calculated market adjustment for 4 direct material key commodities
(LCD, Connectors, SDRAM components, and DC/DC converters).
Annual savings of >$US10m
• Estimated 2004 component roadmap and volume usage by
specifications for fact-based negotiations.
• Successfully conducted 15+ supplier negotiations using fact-based
negotiations package, utilizing “hot buttons” to achieve Maximum
Supportable Solution (MSS) for almost all of the suppliers.
• The inventory has reduced to 32B NTD and is well-maintained
around this level through the optimized process design in this
project.
43

- Scope Coverage
• S&OP vs. MPS and Material Planning
• Supply Planning vs. Material Purchasing
• Supply Planning vs. Manufacturing
• Material Purchasing vs. Manufacturing
Interlock Between Planning/Execution Stages
• APS-FP, Including Inventory Outlook
function resided in SDB
• SAP R/3
IT Applications
• SPD
• DP
• DSL : Global DP
• Other : Local DP
• MML
• IPL
Operation Unit
• Optics
• Wireless
• Wireline
Product Line

Review Planning
Output
Planning Problem
Analysis
Simulation &
Corrective action
Inventory
Outlook Review
Issue Trace Down
& Cause Analysis
Taken Corrective
action
Correction Action
Follow up
Correction Action
Monitoring
The preliminary direction to reform the ‘Inventory Outlook’:
• Actively present visibility of To-Be inventory and trigger proactive actions in Inventory Controlling.
• Continuously Support the Corrective actions initiated by planning and Inventory Review Meetings.
• Review and Improve the existing inventory data accuracy source, refine the functionality as needed. .
SDB
inventory roadmap-MRD
0
10
20
30
40
50
60
70
80
W752 W802 W804 W806 W808 W810 W812 W814 W816 W818 W820 W822 W824 W826 W828
ME
PR_be_Consumed
PR_be_Reserved
PR_Available
PR_Need_Cancel
PO_be_Consumed
Inventory_be_Consumed
PO_be_Reserved
Inventory_be_Reserved
PO_Need_Cancel
Inventory_Extra
PO_Available
Inventory_Available
- IT Requirement Analysis (2/3)
Control Tower
Key Features to be considered:
 Inventory Outlook for all materials
 Highlight of materials ‘to be Reserved’ , ‘to be
Available’ and ‘to be Extra’
 Correlation Analysis
45

We will bring an experienced team with the right skills and work
collaboratively with ASB to create a strong project governance structure
Copyright © 2011 Accenture All Rights Reserved. 46
* The resumes of key project delivery team are attached in the appendix for the further evaluation.
Business Design / Pilot Support
Training / Data Validation
/Pilot
Project Management
• Kang Yi (ACN) – Business Analyst
• Kelvin Cao ACN) – Business Analyst
• Ella Hu (ACN) – Business Analyst
• XXX (ACN) – Business Analyst
• TBD (ASB) - Members from OP SPD
• TBD (ASB) - Members from CIO BPR
Team
• Laura Li (ACN) – Change Management
• TBD (ASB) - Members from CIO
• Lin Yu (ASB) – Business PM
• Li Peng (ASB) – Technical PM
• Kang Yi (ACN) – Business PM
Accenture SME Team
• Kevin Lin (ACN) – Supply Chain
• August Lin (ACN) – Supply Chain Planning
Steering Committee
• XXX (OP)
• Swee-Soong Yu (ASB CIO)
FP Enhancement
• Laura Li (ACN) –Data Management
• XXX (ACN) – FP Functional Consultant
• Chris Liu (ACN) – FP Integration Consultant
• XXX (ACN) – FP Developer #1
• XXX (ACN) – FP Developer #2
• XXX (ASB) – FP Internal Consultant
ASB Core Team
The directors from
• Quality and Process (Chen Wen Jie)
• CIO (Liu Xin-xin, Zhao Yi)
• Yu Hongbiao (ACN)
Accenture Resources Summary:
 1 FTE BPM / Business Solution Lead
 1 FTE TPM / Technical Solution Lead
 3 FTEs for Business Analyst
 1 FTE for FP Functional Consultant
 2 FTEs for FP Integration Consultant
 ?? FTEs for SAP Consultant
Total of Resources – 8 FTEs

Communication & Change Management
Gather
Stakeholder
Expectations
Change
Planning Stakeholder Engagement / Launch Tailored-Communication
Project Management
Progress Control / Governance / Risk & Issue Resolution
Post-DeploymentDeployment ExecutionDeployment Preparation
Develop
Execution
Plan
Execute Deployment Plan
Manage Deployment Capability
Conduct
Staging Rollout
Conduct
Pilots
Deployment/ Operations Support
Fine-tune Solution/Plan for Subsequent
Deployment Assess and
Confirm
Deployment
Solution
Assess
Readiness
Monitor/
Value
Realization
Launch Training/ Coaching
Transition
Deployed
Solution
ConfirmDeploymentReadiness
AuthorizeDeployment
PlanforDeployment
Establish
Capability
Business Deployment Framework
47

- Major Change in Operating Model
From… To…
• Material Planning/Production Launch Plan
without Capacity Constraint
• Material Planning and Production Planning
(with Capacity Constraint)
• Dedicated team to provide Analytic support
• Centrally coordination
• Manage Inventory
• Production Dept does their own Production Plan
• No Visibility of Production

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