Sales, Inventory, & Operations Planning

Mercury Marines Global SIOP Journey

2010 Supply Chain Council. ALL RIGHTS RESERVED. | < filename > | Slide 1 | 1 June 2011

Barb Bossenbroek Director Supply Chain Process Performance

2011 by Mercury Marine. ALL RIGHTS RESERVED.

Agenda
About Mercury Marine SIOP Journey Origins Global Supply Chain Assessment Global SIOP Expansion SIOP Journey Development

2011 by Mercury Marine. ALL RIGHTS RESERVED.

Mercury Brands and Products

2011 by Mercury Marine. ALL RIGHTS RESERVED.

Mercury - Major Locations

Regional HQ Plants Sales Offices/Dist. Ctr.

Fond du Lac, WI Petit Rechain, Belgium

Dandenong, Australia

2011 by Mercury Marine. ALL RIGHTS RESERVED.

Agenda
About Mercury Marine SIOP Journey Origins Global Supply Chain Assessment Global SIOP Expansion SIOP Journey Development

2011 by Mercury Marine. ALL RIGHTS RESERVED.

SIOP Journey Origins circa 2006

Outboard Product Line
Limited global statistical forecasts and marketing intelligence

Lack of process transparency

Functional silos that limited execution to a shared plan Demand Planner role existed only in the US Poor customer fill rates, low inventory turns

The SIOP Journey Begins

The Supply Chain Management Team - Coach Bob Seidel VP Global Supply Chain - Professor Ranga Katti Director SC Intelligence - Conductor Barb Bossenbroek Director SC Process Performance The Executive Sponsor - Chief Mark Schwabero - President

2011 by Mercury Marine. ALL RIGHTS RESERVED.

SIOP Journey Origins Building the Foundation

KPIs Continuous Improvement Guiding Principles Process Transparency Demand Planning Process SKU Classification Supply Planning Process Volume Scheduling Guidelines

SKU Rationalization

Product Family Rationalization

US Outboard Results after 1st year:

- Forecast Accuracy up 20 points - Fill Rate up 25 points - Inventory down 40%
2011 by Mercury Marine. ALL RIGHTS RESERVED.

Agenda
About Mercury Marine SIOP Journey Origins Global Supply Chain Assessment Global SIOP Expansion SIOP Journey Development

2011 by Mercury Marine. ALL RIGHTS RESERVED.

Global Supply Chain Assessment Process Forecast to Plan

Current State Review
Business processes and technology systems by product line and by region Challenges and opportunities Org Structures

Benchmarking Future State Leading Requirements Practices and Processes

SCOR Oliver Wight Checklists Company Reviews Consultants Knowledge Base Basis of Competition Lean Thinking Global Workshop Common processes by classification rather than product line

Technology Assessment
What stays the same? What changes? What do we keep?

Organizational Framework
Role definitions Central vs. Regional vs. Hybrid Change management plan

Metrics Plan

Solution Roadmap
Time-phased implementation plan Process Technology People / Change Management

Leading Practices Mercurys KPIs Common, Global Definitions

Metrics

People

Process

Technology

Assessment Process aligns with BPT Goals Transformation occurs when change converges in all three areas

2011 by Mercury Marine. ALL RIGHTS RESERVED.

Forecast To Plan Assessment

People

Process

Technology

2011 by Mercury Marine. ALL RIGHTS RESERVED.

Future State Demand Planning Process By Region by Product Line

Top Down, Forward Looking Planning
Top-down Plan (Macro-economic info) Financial Plan

Horizon Based Business Planning

Sales & Marketing Plans and Input Customer Collaboration

Market Intelligence

Gap Analysis

Unconstrained Consensus Demand Plan

Bottom Up, Rearview Planning

Historical Sales, Historical Events SKU Classification SKU Rationalization Statistical Forecasting

Guiding Principle: Utilize multiple, independent views of demand in the development of unconstrained demand plans

2011 by Mercury Marine. ALL RIGHTS RESERVED.

Future State Supply Planning Process

Global Unconstrained Demand Plans

Monthly Process across Product Lines

Incorporates One Holistic Model that Considers All Demand Streams and Supply Resources

Global Netting (DRP)

RCCP / Supply Planning

Daily / Weekly Process by Product Line

SKU Mix Planning

Operational Netting (DRP)

Deployment Planning

Future State leverages an integrated solution to optimize across global demand and supply capabilities
2011 by Mercury Marine. ALL RIGHTS RESERVED.

Future State Global SIOP Process

Regional Mkt Intelligence
BME Demand Planning Exec SIOP

Forecasting COE
C o n s e n s u s

BME US

US

Demand Planning

BAPG Demand Planning

Global Demand Planning

by Product Line

Supply Planning
Across all Plants & Product Lines

BAPG

LA CAN

Demand Planning Finance, New Products

LA CAN

Demand Planning
-3
Weeks

-1

Month End

+1

Synchronized Demand / Supply planning drives focused execution

2011 by Mercury Marine. ALL RIGHTS RESERVED.

FTP Assessment

People

Process

Technology

2011 by Mercury Marine. ALL RIGHTS RESERVED.

Organizational Effort Shift for Demand Planning

Percent of Time Spent
5

60

40 Manual Replenishment Ordering Develop Statistical Forecast

20 55 25

Regional Market Intelligence

Today

Future

Reactive Proactive Illustrates the shift that needs to occur by proactively managing the Demand Plan rather than reacting to backorder and inventory needs
2011 by Mercury Marine. ALL RIGHTS RESERVED.

Key SIOP Organizational Integration

Global SIOP Leaders
(Central by Product Line)

Statistical Forecast COE

(Central)

Supply Chain Planners

(Hybrid)

Demand Planners
(Regional by Product Line)

Establishing key roles and integrated linkages was a critical success factor
2011 by Mercury Marine. ALL RIGHTS RESERVED.

Agenda
About Mercury Marine SIOP Journey Origins Global Supply Chain Assessment Global SIOP Expansion SIOP Journey Development

2011 by Mercury Marine. ALL RIGHTS RESERVED.

Global SIOP Process Steps

BME F O R E C A S T C O E
Demand Demand Plan Planning Finalization

BAPG
Demand Demand Plan Planning Finalization Consolidation

Canada
Demand Demand Plan Planning Finalization

Supply Plan
By Source

Pre-SIOP Consensus

Exec SIOP Review Final Forecast Submission

LA
Demand Demand Plan Planning Finalization

US
Demand Demand Plan Planning Finalization -3
Weeks

-1 Month End

Weeks

+1

Each Region is a Key Participant in Global Planning

2011 by Mercury Marine. ALL RIGHTS RESERVED.

Global SIOP Alignment

Canada - 2010
Outboard - 2006 MerCruiser - 2008 BMEMEA - 2008

P&A - 2009

Latin America - 2010 BAPG - 2007

Executive Leadership, Global Calendar of Events, Regional Demand Planners, Common Language, Metrics
2011 by Mercury Marine. ALL RIGHTS RESERVED.

Agenda
About Mercury Marine SIOP Journey Origins Global Supply Chain Assessment Global SIOP Expansion SIOP Journey Development

2011 by Mercury Marine. ALL RIGHTS RESERVED.

SIOP Journey Development

Process Enhancement Focus
Customer and supplier collaboration

Demand sensing
Synchronized opportunity development

Organizational Enhancement Focus

Expanded oversight team
Enhanced education programs Expanded global demand planner networking

Our SIOP Journey Continues!

2011 by Mercury Marine. ALL RIGHTS RESERVED.

Thank You!

www.mercurymarine.com
2011 by Mercury Marine. ALL RIGHTS RESERVED.