Intro To Control Tower

COPYRIGHT 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED.
ALCATEL-LUCENT INTERNAL PROPRIETARY USE PURSUANT TO COMPANY INSTRUCTION Page 1
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COPYRIGHT 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. ALCATEL-LUCENT INTERNAL PROPRIETARY USE PURSUANT TO COMPANY INSTRUCTION Page 2
Upon completion of this course, you should be able to: *Understand the importance and benefits of Control Tower for Alcatel-Lucent and the Supply Chain environment *Know The goal of the blueprint phase *Understand what is changing - from the way we do business today to the future environment, and finally *Understand the High level view of Control Tower capabilities
The need for Control Tower came about because our end-to-end supply chain environment has not been performing in a way that meets our customers needs or supports our financial requirements as a normal company. Alcatel-Lucents supply chain is significantly underperforming compared to our industry competitors. Instead of the process and tools enabling better performance, it was often the blocking point for our performance. The tools and processes are holding people back from doing a better job despite their best efforts. *The numbers shown here are roughly right but it gives you an idea of what needs to change. We need to dramatically improve the cycle time of all our supply chain processes, resulting in shorter lead times for our customers: we need to move from an Order Fulfillment Lead Time that is typically 40 days to a capability of delivery in 10 days. We must dramatically improve our delivery performance to the customers requested date. We need to be able to quickly tell our customer yes, we can deliver it on this date and keep that promise. And finally we need to increase our inventory turns we need to increase the velocity of cash going through our company and become more efficient and cash flow positive. For our customers this Control Tower project is important to them because we believe this will be the primary change we make that enables shorter cycle times. This will eliminate the need to ask our customers to tell us a year in advance what they are going to buy, we will be able to be responsive to our customers and keep our promises. That is what this project is all about providing our employees with simpler and a more effective process as well as simpler and a more sufficient set of tools for them to do a better job and deliver a higher level of performance.
*The Control Tower program includes in its scope all people, processes and tools involved in the planning and management of Alcatel-Lucents end-to-end supply chain. *Spanning the end-to-end supply chain, from raw material component suppliers to our finished goods management. When the implementation roll-out is complete, all product divisions, all products, and all regions will be supported. *Control Tower is re-engineering the current environment to take us to the required levels of supply chain performance .
In September 2011, a core team was created to design a blueprint that the company could begin to build upon in the beginning of 2012. Basically, the blueprint is a drawing to build a plan to best create a new supply chain environment including, when is the best time to deploy to bring value creation for Alcatel-Lucent. This blueprint phase brought together talent from Alcatel-Lucent, Celestica and some software vendors (such as Rapid Response and E2Open) to discuss how this will work, how much it will cost and how it will improve our performance in 2012. The key deliverable of the blueprint phase is the Conceptual Design. The Conceptual Design explains what capabilities will be enabled by the Control Tower.This includes documenting what activities will be performed by what roles and using information to achieve business goals. *The concept of Control Tower Conceptual Design will be explained in upcoming training modules.
The purpose of Control Tower is maintaining proper inventory and delivering it correctly to the customer as needed. It will have an immediate impact o Additionally, it will affect delivery performance and our ability to commit. We will have a leaner Supply Chain with better visibility and efficiency, resultin Control Tower accomplishes this, with two of the key changes targeting impacts being: End-to-end visibility of the supply situation in our supply chain network, everything from raw materials to finished goods is refreshed daily. Supply chain planning and management tools analyze data with short cycle times, enabling just-in-time planning and monitoring of the supply/demand
Leveraging these two key capabilities, supply chain planners and managers will work with up-to-date data and have the ability to respond quickly as the
Delivering on our commitments requires use of a demand supply balancing cycle. Historically, data collection began the Friday of the first week and com after collection. Control Tower intends to retrieve data on a daily basis, or more than once a day when necessary to perform demand/supply planning o
The current planning system in place covers only SLIs which are (Single Logistical Items). It stops at the finished goods level and it's weakness is in where we suffered most during the Tsumani in Japan. Control Tower will extend the current planning system from a finished goods level to encompass will provide the desired results.
Our current planning system only covers major items. To deliver a proper solution, we also need to include installation related materials, OEM products frequency of purchase, as well as various planning systems and teams attempting to compile data. The goal of Control Tower is to determine customer service for our internal project management community; and finally form a commitment. Traditionally, Alcatel-Lucent has not used statistics to build pla inventory visibility.
Visibity. We are often stuck with e-mailing and phone calling to gather information. Control Tower creates end-to-end visibility across the entire supply that requires feedback to determine current happenings and improvements needed. Clear and accurate reporting and valid business intelligence on an
Today, we have a lot of people building a lot of excel reports and trying to figure out what is going on in order to make informed business decisions. Th to build automated reports enabling people to be more focused on planning.
This slide and the next slide depict key changes from the way we do business today to how we will do business when Control Tower is deployed. Each of the following areas will be discussed in further detail in the remaining courses: Two of the four areas are Demand & Inventory Planning and Supply Demand Balancing.
These other two areas will be discussed in further detail: *Sourcing & Supplier Collaboration, and *Technical Architecture and Data As you can see from these two slides many of the new processes and tools being introduced either dont exist today or have been used in a limited capacity.
Statistical forecasting is limited in todays supply chain planning activities. *Our intention to use Statistical Forecasting to provide a baseline, or starting point, forecast that can be enhanced with additional customer and market knowledge. This will be managed in the regional team. Spending less time manually building the forecast each month, thus spending more time on understanding the potential demands of critical customers and their programs. We intend for the baseline statistical forecast to project demands out for 15 months closing a gap we currently have where customers visibility to their future needs is limited. This extended visibility is much needed to support our long term component capacity and price management activities. *The concept of Statistical Forecasting will be explained in the upcoming training module focused on our end-to-end Demand Planning and Sales and Operating Planning process.
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Todays planning processes are built around Monthly and Weekly activities, often using data that has aged. *While some milestone activities will still be executed once per month, the planning activity will become more continuous, acted on each day with refreshed data and alerts to events in the supply and demand situation. The latest supply snapshot will be pegged to the current view of customer demands on a daily basis, with two way communications between the Control Tower and the regional order management / project management teams. The Control Tower will see any adjustments made to customer sales orders by the regions, and the Control Tower will inform the regions of any changes to the projected availability of material for delivery. *These changes will be discussed in the training module focused on the Demand / Supply Balancing capabilities of the Control Tower.
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Todays planning processes are focused on the Single Logistical Items that are delivered to our customers. We make assumptions about our capabilities to supply those SLIs in the monthly planning cycle, because several iterations of cascaded MRP evaluations in the supply nodes (spanning several weeks) are required to determine whether there are any constraints in the supply of lower level assemblies or components. We also do not provide a concise, complete set of information to our component suppliers, or our commodity and supplier management teams. Their visibility to our long-term supply requirements is limited, making it difficult for us to secure supply particularly for longer lead time items. *In the Control Tower, we will provide visibility to demands at all levels of the product via a centralized explosion of the bills of material. Besides giving better visibility to our suppliers and commodity teams, this also allows the Control Tower to quickly assess the feasibility of demand plans, considering supply and capacity constraints at any level. *These capabilities will be discussed in the Critical Component Management, and Demand Planning modules of this training.
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Todays supply chain planning is built around a push model, whereby forecasted demands at higher levels of the supply chain are cascaded to lower levels. This can result in inflated levels of inventory and a supply chain that is slow to respond to changes in demand. *With the Control Tower deployment we will be greatly increasing our use of pull replenishment techniques for inventory management. Using inventory optimization tools that consider parameters including our targeted on-time customer delivery performance, the forecasted demand and historical demand variation, and the level of inventory we can afford, we will determine the proper locations and sizes of inventory buffers from finished goods to raw materials. In the pull replenishment mode, inventory is replenished only when it has been consumed by a hard demand. For example, finished goods will only be replenished by their suppliers when they have been pulled from the warehouse to fulfill a customer sales order. *The concept of of a pull replenishment will be discussed in the Inventory Optimization module of this training program.
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Currently, the centralized demand and supply planning processes have limited visibility, lacking information regarding the supply / demand situation in supply nodes below the finished goods level. The supply node information is managed on a node by node basis, making it very challenging to piece together an end to end view for any product. *In the Control Tower, we will be modeling the end-to-end supply chain for each product, showing the buy/sell relationships between each of the supply nodes involved. Supply and Demand information will be pulled from each of those nodes on a daily basis and made available in the Control Tower platforms. *End-to-End visibility is a key concept of Control Tower, elements of this will be discussed in several of the following training modules.
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Control Tower is being developed in parallel with changes to our physical supply chain network and our operating model. Outsourcing and consolidation of some of our manufacturing locations, we are evolving towards a regional campus model for our manufacturing, integration and distribution activities. In partnership with the Control Tower, the sizing and position of inventory in planned buffers will be optimized, balancing our customer delivery requirements with our cash flow and affordability objectives. These buffers will be managed in a pull replenishment model. To minimize the working capital impacts of these buffers, Vendor Managed Inventory arrangements will be used as much as possible. In line with the pull replenishment strategy, we will use the Configure-to-Order fulfillment model as much as possible. In CTO, inventory is buffered just before the point where it must be customized per customer order requirements, and then it is pulled from those buffers only when needed to fulfill a customer order.
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To summarize - Control Tower will become the central point for end-to-end supply chain visibility, planning, and management, utilizing daily updates of snapshots from all nodes in our supply chain network. - Control Tower will direct the sizing of the buffers managed in each supply node, as well as directing order fulfillment activities based on the supply / demand situation and priorities. - Control Tower will interact with regional Project Management and Order Management activities via the ERP systems which remain our systems of record for all Customer Sales Order information.
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Good job! You succeeded in attending this course. Its a great start. Now lets go to the next step: A short quiz to confirm your newly acquired knowledge. Click on the Next button to start the quiz!
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Please stay connected to the Control Tower project. Check out these communication vehicles where you will find additional information on Control Tower, view interviews with Senior leaders, as well as Engage with the Control Tower team. To access these links please click on the appropriate icons. *The goal of these vehicles are to provide you with simplified , timely and targeted two-way communications about the Control Tower Project.
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CTP01000W_020.mp3 This completes the course Introduction to Control Tower Conceptual Design Training. Please proceed to our next training course in this series Introduction to the Control Tower Blueprint and Conceptual Design.

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COPYRIGHT 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED.

ALCATEL-LUCENT INTERNAL PROPRIETARY USE PURSUANT TO COMPANY INSTRUCTION Page 1

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